Brazilian Senator Sérgio Petecão has proposed legislation to significantly increase taxation on operators, aiming to channel a larger portion of gaming revenue into public health and social security.
The bill seeks to raise the effective tax rate on the sector from 12% to 27.5%, in what the Senator described as a temporary measure to strengthen fiscal sustainability until the upcoming Selective Tax, part of Brazil's broader tax reform, comes into effect.
According to Petecão, the betting market's rapid growth, generating billions annually, justifies higher taxation to ensure that the state benefits proportionally from an industry with increasing social impact.
He argued that the measure represents an act of "fiscal justice" and would "reinforce the financing of the social security system and healthcare programmes."
Critics have warned that higher tax burdens could discourage investment or push operators to move offshore.
Petecão countered that regulated operators are unlikely to abandon a market with Brazil's scale and potential for long-term growth, noting that clear and fair taxation can promote credibility and attract responsible businesses.
The proposal follows ongoing debates in Congress about betting taxation, amid efforts by the Ministry of Finance and the Secretary of Prizes and Betting to stabilise the regulatory framework, where lawmakers rejected the Government's earlier plan to raise the betting tax to 30%. The setback exposed divisions within the Chamber over how to balance fiscal recovery with maintaining a competitive environment for licensed operators.
Congress also rejected a tax provision earlier this year that sought to raise the betting tax rate from 12% to 18%, part of the Government's broader fiscal recovery plan.
The rejection effectively maintained the existing 12% rate. Lawmakers mentioned concerns over excessive taxation and regulatory uncertainty, while others argued the proposal needed clearer distinctions.
"It's unfair that those who make billions in profits pay less than workers. I want to ensure this money returns to the people, with well-equipped hospitals, decent care and more investment in public health," stated the Senator.
A recent study revealed that unlicensed gambling platforms continue to command Brazil's market share, being 2% bigger than legal operators
