Brazil’s Online Betting Regulation Generates Billions in Revenue as Tax Pressure Intensifies

The regulation of online betting in Brazil is already producing a substantial financial impact on public accounts. During the first quarter of 2026 alone, the federal government recorded R$3.4 billion in revenue generated from licensed betting operators.

The figure stands out not only because of its size, but also because it represents a 123.7% increase compared to the same period in the previous year, when collections totaled R$1.5 billion. Official data released by the Federal Revenue Service confirms that the amount collected through betting-related taxation in Brazil has more than doubled in just one year.

The regulated betting market officially began operating on January 1, 2025. From that date onward, the government implemented the 12% tax applied to Gross Gaming Revenue (GGR), which refers to betting operators’ revenue after deducting the prizes paid to players.

Despite the sector already contributing heavily to public revenue, the tax burden imposed on licensed betting companies is expected to become even greater over the coming years. In December 2025, the National Congress approved Complementary Law Project (PLP) 128 of 2025, introducing new provisions specifically designed to increase taxation on the industry.

Under the tax schedule approved by lawmakers, the rates applied to betting companies in Brazil will rise progressively. The current 12% rate will increase to 13% in 2026, climb to 14% in 2027, and ultimately reach 15% in 2028.

The legislation also establishes penalties for entities that advertise unregulated betting platforms or facilitate transactions involving irregular operators. As a result, less than two years after betting regulation officially took effect in Brazil, the sector has already experienced an expansion of taxation alongside tighter regulatory controls restricting access to authorized platforms for certain groups of citizens.

One of the most recent examples involves a government ordinance connected to Novo Desenrola Brasil, a debt renegotiation initiative. Participants in the program are now prohibited from accessing betting platforms for a period of one year.

Companies seeking to operate legally in Brazil must obtain authorization from the Secretariat of Prizes and Bets (SPA), an agency linked to the Ministry of Finance. According to government guidelines, operators are currently required to pay a grant fee of R$30 million, which is directed to a single National Treasury account.

Each license permits an operator to manage up to three betting brands. If a company wishes to operate additional brands, it must purchase another authorization valid for five years. Beyond the licensing fee, operators are also obligated to pay an Inspection Fee to the SPA.

Once approved, operators are authorized to conduct activities in Brazil using the exclusive “bet.br” domain designated for the regulated market. The government also maintains a public list of companies authorized to offer betting services nationwide.

The regulated framework introduced in 2025 established several taxes and mandatory financial obligations for the betting industry. Gross Gaming Revenue taxation remains one of the central components of the model, with rates currently set at 12% and scheduled to rise gradually until reaching 15% by 2028.

Licensed operators are additionally subject to Corporate Income Tax (IRPJ) and the Social Contribution on Net Profit (CSLL), which together can produce a tax burden close to 34% on company profits.

Bookmakers are also required to pay PIS and COFINS taxes, currently levied at a combined rate of 9.25% on gross revenue. However, disputes remain regarding the exact calculation basis for these contributions, particularly concerning which revenues should be included for taxation purposes.

At the municipal level, some cities have indicated that they may impose the Service Tax (ISS) on online betting and gaming activities. This possibility has already generated discussions regarding the legal validity of applying the tax to the sector.

Bettors themselves may also be required to pay taxes on winnings obtained through online betting and fantasy sports. According to Brazilian regulations, taxation applies whenever the total amount received exceeds the annual Income Tax exemption threshold.

If the amount won during the previous calendar year remains below the exemption limit, no tax payment is required. However, when the winnings exceed the exempted amount, bettors become liable for taxation.

To facilitate compliance, operators are obligated to provide the Proof of Results in Betting on Fixed Odds Lotteries, known as ComprovaBet, by the final business day of February in the following year. The document includes detailed information regarding the bettor’s activity across all brands operated by the company, with calculations separated according to each betting category.

Using this documentation, adults can access the Federal Revenue Service application to calculate taxes owed on betting prizes obtained during the previous year. The current tax rate is 15%, applied exclusively to the portion of winnings exceeding the annual exemption threshold.

Anyone required to pay taxes on betting gains must issue a Federal Revenue Collection Document (Darf) and complete payment by the final business day of April. The IRS calculator is available for users involved in sports betting, online gaming, and fantasy sports activities.

The Federal Revenue Service has also released a “Roadmap for Payment of IRPF on Fixed Quota Lotteries and Fantasy Sport” together with an official Application Manual designed to assist taxpayers.

Brazil’s broader Tax Reform has also directly impacted the online betting sector. Complementary Law No. 214/2025, specifically article 244, determined that physical and online prediction contests — including lotteries, horse racing, fixed-odds betting, and fantasy sports — fall under the IBS and CBS taxation regime.

Under these rules, IBS and CBS taxes are imposed on revenue generated from betting activities after deducting prizes paid and mandatory legal transfers. Prize amounts themselves are not subject to these taxes. Nevertheless, bettors are prohibited from using these amounts as tax credits.

The legislation further requires operators to provide detailed information regarding the location of bets, wagered amounts, prizes paid, and the identification of participants in online betting environments.

The Tax Reform also categorized online betting among services and products considered “harmful to health or the environment,” making the industry subject to the Selective Tax. Article 410 of Complementary Law No. 214/2025 establishes that the Selective Tax will be charged only once on the relevant service or good, without any possibility of using credits. The Selective Tax is scheduled to officially come into force on January 1, 2027.

During the first half of 2025, the federal government announced Novo Desenrola Brasil alongside additional restrictions aimed at the betting industry. Under the program, beneficiaries are prohibited from accessing licensed betting websites and applications for a period of 12 months.

To participate in Desenrola 2.0, consumers must formally authorize the blocking of their CPF registration on betting platforms. According to the Brazilian Federation of Banks (Febraban), this authorization must be explicitly included in the contract signed with the participating financial institution.

The contract must also state that the participant agrees not to use betting platforms throughout the entire 12-month period. Following contract formalization, banks are permitted to share beneficiary information.

Banco do Brasil is responsible for centralizing all data submitted by financial institutions. According to the Ministry of Finance, the bank administers the Operations Guarantee Fund (FGO), a private fund used to cover defaults associated with contracts linked to the program.

The collected information is then forwarded to the Secretariat of Prizes and Bets, which manages Sigap, the Betting Management System responsible for maintaining the official list of individuals prohibited from gambling.

Betting operators are required to consult the system periodically. If a user’s CPF appears on the blocked list, operators must either prevent the creation of new accounts or suspend existing registrations.

In addition, companies must notify users regarding the reason behind the suspension. If funds remain in the account, operators are obligated to return the balance within two days to a bank account authorized by the Central Bank.

The Ministry of Finance also adjusted the provisional measure associated with Desenrola 2.0 to make explicit the prohibition of betting platforms from participating in federal debt renegotiation initiatives.

The amendment directly affects Desenrola Fies, a program focused on students with debts linked to the Student Financing Fund (Fies). The initiative offers discounts and revised payment conditions for students in default.

As Brazil continues refining its betting framework, regulation remains in a constant state of development and consolidation. New debates, projects, and regulatory challenges continue to emerge almost daily. Nevertheless, one central issue remains clear: for the country to fully unlock the economic potential of the betting industry, authorities will need to strengthen oversight measures and intensify efforts against illegal gambling operations, which continue exposing the population to insecurity and a lack of transparency while generating neither employment nor revenue for the state.

By fLEXI tEAM