The President of Brazil, Lula da Silva, has given his official blessing to the bill which will set a new tax rate on gross gambling revenue (GGR) in the country, targeting online fixed-odds betting operators.

As reported today as SBC Noticias – BR, earlier today, Lula has given Complementary Law No. 224/2025 presidential approval, after it cleared the Chamber of Deputies and Senate earlier this month. This will set a framework for rising tax rates over the next three years, starting with an increase from 12% to 15% in 2027 and 18% by 2028.

Brazil’s online sports betting market was set up way back on 1 January 2025, under a federally regulated regime known as ‘Bets’ framework. This framework was approved by Lula, who became President for the second time in 2023.

Lula, along with other members of the PT government, the Chamber of Deputies and the Senate, saw legalisation of online sports betting and a transition from black and grey markets to a white regulated one as a valuable new tax revenue stream back when he approved the Bets market.

The first year of market activity has seen huge returns to the state, standing at around R$3.8bn (around €685m) as of October 2025. However, Lula has some big investment plans for the Brazilian economy and society, with R$300bn in social spending planned for 2026 alone.

These plans require financial backing, and the country’s growing betting sector is an easy source of tax revenue, achieved by both raising taxes on the still-developing regulated market or by bringing more grey market actors under regulatory control.

Lula greenlights more than tax rates…

Law No 224/2025 did not just concern the rate by which operators will be taxed, but also a tightening of the general framework around who can and can’t receive tax benefits – this will also impact regulated betting houses.

Following Lula’s approval any tax incentives granted to legal entities will require an accompanying estimate of budgetary impacts, the number of beneficiaries, and objective performance targets such as economic, social and environmental dimensions. Tax beneficiary status will also be limited to a term of five years.

The law will also gradually reduce federal tax incentives and benefits applying to Corporate Income Tax (IRPJ), Social Contribution on Net Profit (CSLL), Social Integration Program (PIS), Social Security Financing Contribution (Cofins), Tax on Industrialized Products (IPI) and Import Tax.

SBC Noticias – BR reports that the changes will reduce tax benefits by around 10%.

Lula, legislators and Bets

As mentioned above, the finalisation of the ‘Bets’ market was finalised and approved under Lyla’s administration. The government saw a lot of value in tax revenue from regulated betting, as well as in getting the black market under control, guaranteeing more consumer protections and AML safeguards, and setting up new commercial lifelines for sports.

However, as expected there has been a strong degree of political uncertainty around the  explosion in betting activity – with literally hundreds of companies having set up shop in Brazil and the Secretariat of Prizes and Bets (SPA) of the Ministry of Finance still processing many more.

Various legislators and political figures as high up as Finance Minister, Fernando Haddad, have described the creation of the ‘Bets’ market as a mistake due to its societal implications. 

The government has been aware of potential societal consequences for some time, as seen by decisions such as the ban on Bolsa Familia welfare recipients from betting earlier this year.

As the market heads into 2026, it is clear that many legislative and regulatory questions hang over the Brazilian betting market. And although Lula has now settled on the 12%-15%-18% transition, tax still remains a topic – namely, a prospective 15% tax on bettors’ deposits.