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Brazil’s Workers’ Party has introduced a new bill to double gambling taxation, days after an earlier attempt to raise rates was withdrawn.
Brazil’s government is moving quickly to revive its stalled plan to increase gambling taxes. Following the failure of Provisional Measure (PM) 1,303, which sought to raise the rate from 12% to 18%, Lindbergh Farias, leader of the Workers’ Party in the Chamber of Deputies, has now presented Bill PL 5,076/2025, proposing a 24% tax on gross gaming revenue (GGR).
Workers’ Party pushes for renewed gambling tax reform
The new bill comes just one day after the government’s previous tax proposal collapsed in Congress.
Introduced on 9 October, PL 5,076/2025 represents a more aggressive attempt to secure funding for Brazil’s public spending agenda. Under the proposal, half of the revenue generated from the higher tax would be directed to social security and public health, with the remaining funds allocated to sports, culture, and social projects.
Farias justified the proposal by citing data from a 2023 Comscore study, which ranks Brazil behind only the United States and the United Kingdom in betting consumption. The bill reads:
“This growing increase in bets and the number of bets is accompanied by several social and economic problems.”
The proposal also ties the tax increase to responsible gambling concerns, arguing that higher taxation could discourage excessive betting and help fund addiction prevention measures.
Social and economic reasoning behind the tax proposal
Supporters of the bill frame the increase as both a moral and fiscal necessity.
In his explanation, Farias wrote that “what often begins as a joke can eventually lead to gambling addiction,” noting its impact on mental health and household finances. The bill states that rising debt and addiction justify stronger intervention from the federal government.
“This proposed law increases Brazilian taxation on betting to a higher level than the average for other activities – which is justified by the fact that betting is an activity that is harmful to health and the family economy.”
Despite the steep rise, the proposal argues that Brazil’s rate would still remain below that of France and Germany, suggesting room for further fiscal growth without overburdening the market.
Political context: a test for Lula’s economic agenda
The Workers’ Party is facing pressure after failing to deliver its earlier tax reforms last week.
The collapse of PM 1,303 has raised doubts about the government’s ability to pass fiscal reforms that align with President Luiz Inácio Lula da Silva’s economic goals. That measure originally aimed for a 50% tax increase on the sector but was withdrawn following strong opposition from legislators and operators.
The government also vetoed a retrospective tax programme targeting operators’ pre-regulation revenue, leaving a gap in expected income from the growing betting market.
With PL 5,076/2025, the Workers’ Party is seeking to regain momentum and reaffirm its fiscal stance ahead of next year’s budget negotiations. The bill also serves as a test of political alignment within the ruling coalition, as disagreements over gambling taxation have become symbolic of wider tensions between economic policy and social values.
Industry reaction and potential market impact
Operators warn that doubling the rate could strain profitability and hinder Brazil’s emerging regulated market.
While industry groups have not yet issued formal statements on PL 5,076/2025, early reactions from local operators suggest concern that a 24% GGR tax may reduce reinvestment in marketing, technology, and responsible gambling initiatives.
Analysts also note that Brazil’s regulated market remains in its infancy, and significant taxation changes at this stage could deter new entrants. Some stakeholders argue that the government should focus on enforcement and channelisation before pursuing further revenue hikes.
However, supporters of the bill contend that betting-related profits have expanded faster than state oversight, making taxation both a corrective and redistributive measure.
The coming weeks will determine whether this proposal gains enough political traction to replace the failed provisional measure.
Outlook: balancing revenue with regulation
Brazil’s next steps will reveal whether the government prioritises social funding or market stability.
If approved, the new 24% rate would make Brazil one of Latin America’s highest-taxed gambling jurisdictions. The bill’s success depends on whether lawmakers can balance fiscal ambition with the need to attract licensed operators and sustain long-term compliance.
As the debate continues, the broader question remains: can higher taxes truly curb betting harms without undermining a regulated market still finding its footing?
Source: iGaming Business
