Brazil Hikes Gambling Tax Already

Brazil has shocked its fledgling legal gambling industry with a serious tax hike that takes the total levies dangerously close to 50%

Brazil kicked off 2025 with a bang, finally opening the doors to regulated online gambling in January. Operators flooded in. Bet365, Betano, Caesars, Betsson and others snapped up early licenses, for the most exciting market in Latin America.

But just months in, the game has already changed.

The Ministry of Finance has now approved a provisional measure to raise the GGR tax from 12% to 18%. When you factor in Brazil’s other levies, some insiders say the effective tax rate could hit 50%. For many operators, that’s a tough pill to swallow.

Big Names, Big Hurdles

Getting licensed in Brazil wasn’t simple. Operators had to:

• Incorporate locally
• Post a R$5 million bank guarantee
• Prove compliance with local rules on responsible gambling, AML, and data security

It was a rigorous process, but for global brands looking to lock in early market share, it was worth the effort — or so they thought.

A Sudden Squeeze on Profit Margins

Now those same operators are facing a major shake-up. The GGR tax hike is part of a broader government effort to cover fiscal shortfalls after backing down on increasing the IOF (Financial Transactions Tax).

So instead, the government is turning to gambling to plug the gap.

Brazil’s betting market is already pulling in serious numbers. The Ministry estimates monthly turnover at R$2.8 billion ($500 million USD), with around R$755 million ($135 million USD) flowing to the federal government between February and April through official channels like DARF Form 5862.

But the real pressure comes from the stacked tax structure:

• 18% GGR tax
• 9.25% PIS/COFINS
• Up to 5% ISS (municipal services tax)
• 34% corporate income tax
• A Selective Tax still under discussion

The total effective rate could easily approach 50%, making Brazil one of the most expensive regulated markets in the world for operators.

Operators Push Back

The response has been fast and firm. A coalition of trade groups, including the Instituto Brasileiro de Jogo Responsável (IBJR) and the Associação Nacional de Jogos e Loterias (ANJL), blasted the proposal, calling it:

“Unjustifiable from any technical, economic or public policy perspective.”

They warn the hike could drive legal operators away and reinvigorate the black market, which remains active and lucrative across Brazil.

What Comes Next?

Brazil’s iGaming market started with massive potential. But if these tax hikes stick, that potential might get choked before it really has the chance to scale. For now, the big question is whether lawmakers will reconsider, or how global operators will respond.