Online Betting in Brazil Now Taxed at 18 Percent Under New Rule

Brazil has raised the tax rate on licensed online betting companies from 12% to 18% of their net revenue, a 50% increase set to take effect on October 1, 2025. The new rate applies to Gross Gaming Revenue (GGR) and reflects a broader government effort to boost funding after reducing the Financial Operations Tax (IOF).

Good to know

• Tax on online betting rises from 12% to 18% of net revenue (GGR).
• New rules target unlicensed operators with payment bans and stricter penalties.
• Changes take legal effect immediately but still require congressional approval.

The additional 6% from the tax increase will be directed toward social security and health programs. The previously established 10% federal share remains unchanged, bringing the total contribution from operators to 16% of their GGR. The remaining 2% goes to other regulatory costs.

Beyond the tax increase, Brazil’s Provisional Measure (MP) outlines a firm crackdown on illegal betting. Internet providers, financial firms, and app stores must now create a direct communication channel with the Ministry of Finance to quickly enforce orders to block unlicensed services.

Payment processors are also affected. Banks and payment platforms will be banned from handling transactions tied to unauthorized betting operations. The MP introduces possible advertising restrictions, including penalties for anyone promoting illegal platforms through websites, apps, or traditional media.

Under the new rules, actions like match-fixing, noncompliance, or ties to unregulated betting platforms will be treated as administrative violations. Companies found in breach may face sanctions, and executives linked to these activities could be banned from holding leadership roles at licensed gambling firms.

While the Provisional Measure takes immediate legal effect, it must still pass through Brazil’s National Congress within 120 days. It will first be reviewed by a joint committee before heading to votes in the Chamber of Deputies and the Senate. Lawmakers may pass it as is, propose amendments, or veto sections before final approval.

Finance Minister Fernando Haddad defended the move, calling it a necessary step for balancing budget needs with stronger industry oversight. He emphasized that the measure aims to improve consumer protection, enhance regulatory integrity, and provide more stable funding for public services.

Some lawmakers have voiced concerns about enforcement challenges, but the government remains committed to pushing the measure through Congress before the deadline.