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In a record-breaking wave, Brazil’s federal government, between January to May 2025, raked in a staggering BRL 3.03 billion in tax revenue from online sports betting and online gambling. The statistics, released by the Federal Revenue Service on June 26, represent an over 40,000% increase compared to the same period in 2024, when collection was a measly BRL 7 million.
This quick expansion is a manifestation of the correct implementation of the model of taxation established by Law No. 14,790/2023, which obliges the collection of taxes through the Gross Gaming Revenue (GGR) model — net revenue of operators minus payments to players.
In May alone, tax revenues amounted to BRL 814 million, a resounding figure compared to the BRL 4 million collected in May 2024. This is a year-on-year growth of more than 23,000%, testifying to the rapid expansion and formalization of Brazil’s online gaming market.
Legal Framework and Regulatory Milestones
The revolutionary impact is a consequence of regulatory milestones passed in 2024 and 2025. In January 2024, President Luiz Inácio Lula da Silva approved the law that implemented taxation on fixed-odds betting. By October 2024, the operators were compelled to obtain licenses and pay authorization fees for them to operate lawfully within the country.
The GGR model, effective once the law was regulated, derives the taxable base as the total amount bet minus player payouts. The model is based on international gambling best practice in regulation and has facilitated a prompt revenue stream for the federal government.
According to Claudemir Malaquias, head of the Federal Revenue’s Center for Tax and Customs Studies, the sector’s tax payments nowadays exceed those of traditional businesses. In May 2025, the betting sector exceeded big industries such as education (BRL 516 million), retail business (BRL 507 million), and the machinery and equipment production industry (BRL 408 million).
Future Taxation Rate Increase for Betting Operators
The Ministry of Finance publicly disclosed that starting October 1, 2025, the tax rate on GGR will rise from 12% to 18%. The government implemented this measure through a new Provisional Measure (MP) as an alternative to a vetoed IOF tax hike earlier. It should also generate further government revenues of BRL 284.9 million in 2025 and BRL 1.7 billion annually from 2026 onward.
This increase forms part of a broader fiscal strategy to meet Brazil’s 2025 primary deficit target of zero, with a tolerance margin of 0.25% of GDP (approximately BRL 31 billion). The government has already frozen or cut over BRL 31.3 billion in discretionary expenditures — the biggest such move in five years — and now seeks to tax intangible and high-growth sectors like online gaming more heavily.
Impact on Brazil’s External Balance and Current Account
The Central Bank of Brazil has included the new regulation of gambling in the list of factors that reduced the country’s estimated current account deficit. The Bank has reduced its estimate from USD 62 billion to USD 58 billion in its Monetary Policy Report for the second quarter.
Part of this gain comes from a reduced outflow in the services account, specifically in cultural, personal, and recreational services — a segment in which gambling-related spending is accounted for. The Central Bank reported that the regulation of betting regulations at the start of 2025 has reduced outbound capital for online gambling, thereby improving Brazil’s balance of payments.
A New Era for Brazil’s Gambling Market
The sensational top-line growth and strategic deployment of regulation write a new chapter for Brazil’s betting and gambling industry. As the country clamps down on the territory and drags betting into its formal economy, the sector will become a significant contributor to the public purse, even as it requires stronger protections for consumers and enforcement action.
The challenge now is to sustain this momentum, ensure tax compliance prevails, and overcome the political resistance sure to arise as tax policy continues its evolution.
Source: BNL Data
