The Brazilian Government has set a 0.5% Selective Tax rate for lotteries and betting services in 2027 under Provisional Measure (MP) 1,399/2026, published on November 4.
Article 7 of the measure applies the rate to contests of predictions as defined by Complementary Law 214/2025. That category covers physical and online lotteries, fixed-odds betting, sweepstakes, horse-race betting and fantasy sports.
The tax is scheduled to take effect on February 2, 2027.
The rate is levied on the provider's own revenue from the activity. Under the underlying law, that means receipts after prizes and mandatory transfers to public bodies, funds and other statutory beneficiaries have been deducted.
The 0.5% figure is therefore not a levy on total customer stakes or winnings. It would sit alongside the wider consumption tax framework set out in Brazil's tax reform.
The provisional measure establishes rates for other Selective Tax categories, including alcoholic and sugary drinks, tobacco and vehicles. It covers 2027 only.
The Government must send Congress a separate bill by May 31, 2027 to establish rates from 2028. Congress must also consider the provisional measure, so its terms may change before the tax takes effect.
Before the ban, Brazil had already legislated an increase in the fixed-odds operator levy from 13% in 2026 to 14% in 2027. The new 0.5% rate is a separate Selective Tax.
The inclusion of fixed-odds betting in the tax statute does not reopen the market. MP 1,394/2026 prohibited fixed-odds betting nationwide in September, with betting sites required to go offline from October 6.
The tax's eventual reach will therefore depend on what activities are legally available when it begins and on the outcome of litigation over the ban.
On a separate court track, Brazil's Supreme Court heard arguments on November 4 about whether municipalities may establish and operate lotteries. The court adjourned the case without setting a date to resume.
Court president Edson Fachin indicated a possible joint review of municipal lotteries, betting and other gambling cases in a future session, CNN Brasil reported.
In October, a report on Brazil's betting tax receipts showed federal collection reached BR$11.1bn ($2.14bn) from January to September, already exceeding the total for 2025.
For betting and lottery services, tax legislation treats service provision or payment, whichever comes first, as the Selective Tax event
