SBC News Voice of the Sports Betting Industry
Brazil’s Ministry of Finance has approved a Provisional Measure (MP) to raise the Gross Gaming Revenue (GGR) tax rate on betting companies from 12% to 18%. The decision, taken on Sunday evening following high-level consultations needed for President Lula da Silva and PT administration to rebalance public finances and budgetary measures.
As first reported by SBC Notícias Brazil, the measure is a direct alternative to the previously proposed hike in the Financial Transactions Tax (IOF), which was set to rise from 0.38% to 3.5%. That proposal was shelved following opposition from the Central Bank and congressional leaders who feared inflationary effects and reduced investor confidence.
Finance Minister Fernando Haddad confirmed the pivot to the betting sector, stating: “This MP will allow us to recalibrate the IOF decree, focusing its new version on regulatory aspects, so that we can reduce the tax rates outlined in the original decree, which will be revised accordingly.”
The government sees the regulated betting market—estimated to generate R$2.8 billion in monthly turnover—as a pragmatic fiscal lever. Between February and April alone, the sector contributed R$755 million in fixed-odds betting tax and R$2.4 billion in licence fees.
However, the announcement triggered an immediate industry backlash. As reported by SBC Notícias Brazil, the Instituto Brasileiro de Jogo Responsável (IBJR) and the Associação Nacional de Jogos e Loterias (ANJL) warned the tax hike could push the effective burden above 35%, including corporate, municipal, and social contribution taxes.
A technical note distributed to lawmakers by ANJL described the measure as “a shot in the foot,” warning it could lead to market contraction and a resurgence of illegal operators.
The Provisional Measure will take immediate effect but must be approved by Congress within 120 days to remain in force. SBC Notícias Brazil continues to monitor developments as lawmakers and stakeholders assess the broader implications for Brazil’s newly regulated betting sector.
