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In an interview with Brazilian news site Metrópoles, Finance Minister Fernando Haddad strongly attacked the internet betting sector, demanding increased taxation and regulation. Haddad’s comments reflect an emerging concern inside the government of Brazil over the accelerated expansion of the gambling sector and the negligible contribution to national employment or economic development.
Earlier Regulation and Insufficient Taxation
Haddad mentioned what he called a “privileged” treatment of the betting business under the previous administration of former President Jair Bolsonaro. Brazilian online betting companies between 2019 and 2022 largely evaded taxation because there was no clear regulation. “The previous government treated online betting sites as if they were philanthropic organizations“, he said. “No real was received from them during those four years.”
He concluded that said policy allowed betting operators to grow unrestricted, making huge profits without owing any obligation to remit to public coffers or the social economy.
The Rush to Restore Initial Taxation Levels
In 2023, the federal government introduced a bill in the National Congress with an 18% tax on online betting operators’ Gross Gaming Revenue (GGR). But during the legislative process, the tax rate was cut back to 12% — something Haddad is now attempting to reverse. The new 18% tax rate has been included in Provisional Measure (MP) 1,303, published in June, and will enter into effect on October 1, 2025, pending its rejection by Congress.
“We have returned to the original plan“, Haddad declared. “These companies are piling up profits in Brazil, creating few jobs, and shipping most of their profits overseas. What is the nation’s benefit with this model?”
A Call for Comprehensive Regulation
Other than taxation, Haddad underscored the necessity of wide and stringent regulation of gambling. He likened gambling to the tobacco and alcohol industries that are heavily regulated due to their public health and social impacts. “This needs to be addressed in a proper manner and with urgency. The industry has had four years of zero taxation — enough is enough,” he furthered.
The statements of the Finance Minister come before a broader effort by the Brazilian government to legalize the betting industry, increase public revenues, and shield consumers from potential ills. In the current campaign for regulation, all betting operators will be required to be licensed and comply with strict operating and fiscal terms.
Economic and Social Implications
While the internet gaming industry has grown manifold in Brazil — and is dominated primarily by mass sports betting — the sector has been widely criticized for failing to promote jobs or long-term economic development. Haddad highlighted this paradox, saying, “These platforms are extracting resources without providing us with significant benefits in return. We shouldn’t endorse gambling unless it is appropriately regulated and contributes considerably to our economy.”
His position is in line with the arguments of regulatory agencies and civil society organizations, which have been demanding for years for oversight mechanisms to promote transparency, consumer protection, and socially responsible gaming practices.
With MP 1,303 awaiting Congressional approval, the battle over the proper level of taxation and regulation in gambling is only just starting. The argument that increased regulation will enable Brazil to adapt to the best global practices, protect vulnerable groups, and generate more tax money is being championed by those advocating for more regulation. Their opponents may still be against more controls on the grounds of liberalization of the economy and market freedom.
Still, Haddad’s vociferous denunciation is an indication that the Brazilian government intends to have a more proactive role to play in determining the fate of web gambling — a mix of economic advancement and social responsibility.
Source: YogoNet
