Facing the proposal to increase the gambling tax rate from 12% to 18%, with the overall tax burden potentially reaching 50%, the Brazilian Congress has established a joint committee to assess the provisional measures PM 1,303/2025 proposed by the government in June, and plans to complete the voting by October 9 to decide whether to make it permanent.
This measure has temporarily taken effect, taxing 18% of the total gambling revenue, one-third of which is used for social security and medical purposes, and the rest is invested in sports, education, and other fields. This move is intended to fill the fiscal gap of about 36 billion reais (approximately 3.6 billion US dollars) caused by the government's slowdown in increasing the Financial Transaction Tax (IOF).
However, the industry has reacted strongly. The Brazilian Responsible Gambling Association (IBJR) warns that this tax burden could render regulated gambling enterprises unprofitable, pushing the illegal market share to rise above 60%, endangering the development of the legal market and national tax revenue.
The joint committee has scheduled four hearings, with the first set for August 7, and plans to vote on August 26. The committee is led by Senator Renan Calheiros, with Deputy Carlos Zarattini serving as the rapporteur.
Political opinions are also divided. Senator Randolfe Rodrigues supports the increase, believing that the gambling tax is an important measure to achieve tax fairness and reduce social inequality. Meanwhile, Senator Irajá Lucas criticizes the government for "only focusing on increasing taxes," ignoring the control of social costs of gambling and the regulatory loopholes in the use of subsidies, calling it "incredibly incompetent."
Although PM 1,303/2025 also affects industries such as fisheries, agriculture, and real estate, the adjustment of the gambling tax has become a focal point of controversy. The direction of this round of reforms will profoundly affect the future landscape of Brazil's legal gambling market.
