Brazil Signals Tough New Action to Curb Rapid Growth of Online Betting Industry

Brazil’s president has indicated that the government is preparing to introduce what he described as “very serious” measures aimed at slowing the rapid expansion of online betting platforms across the country. The announcement reflects increasing concern among policymakers regarding the broader social and economic consequences linked to the surge in mobile gambling. The issue has gained political and public attention as online betting services continue to experience widespread adoption among Brazilian users.

President Luiz Inácio Lula da Silva has characterized the expansion of online betting as an emerging social threat, largely driven by the widespread penetration of smartphones. According to the president, gambling platforms have effectively moved betting activities directly into private homes, significantly increasing accessibility for minors and other vulnerable groups. He warned that young people are able to access betting applications through family-owned mobile devices and can place wagers using money they do not possess.

Lula further argued that the rapid spread of digital betting platforms disproportionately harms lower-income households. In his assessment, these services redirect money away from families already facing financial hardship. This perspective frames online betting not only as a matter of regulatory oversight but also as an issue tied to social protection and economic equity. The president also noted that his personal stance on gambling has changed over time. While his earlier views were influenced by moral and religious considerations, he now associates his opposition with the scale, reach, and ease of access enabled by mobile technology. The growing presence of betting advertisements during sports broadcasts has also intensified political attention and public debate surrounding the issue.

The Brazilian government has already begun implementing financial measures to place additional pressure on the online betting industry. Recently approved legislation introduces a phased increase in income tax applied to digital betting operators. The tax rate, currently set at 12 percent on gross revenue, is scheduled to increase gradually to 15 percent by 2028. A portion of the revenue generated from this tax increase is expected to be allocated to public spending programs, including healthcare and social security systems. These new taxes are layered on top of existing financial charges applied to gambling operations, creating a significantly high overall tax burden for licensed betting operators. Government projections indicate that the combined tax burden on betting companies could reach approximately 40 percent.

This fiscal strategy reflects a broader policy approach designed to slow industry expansion through economic pressure rather than outright prohibition. However, the growing tax burden has also triggered concerns about long-term market sustainability, as well as potential impacts on compliance levels and the proportion of betting activity that remains within regulated channels.

In addition to taxation, authorities have also attempted to restrict access to betting platforms for individuals receiving government welfare support. Regulations introduced last year sought to prevent recipients of Bolsa Familia and similar social assistance programs from participating in online betting. The policy was intended to prevent public welfare funds from being redirected into gambling platforms. However, legal challenges brought by industry groups resulted in judicial decisions that limited the reach of these restrictions. Despite these legal setbacks, the topic remains politically sensitive. Data released by Brazil’s Central Bank revealed that welfare recipients transferred billions of reais to betting operators within a single month, strengthening calls for tighter regulatory controls.

As Brazil continues moving toward a more structured regulatory framework for online betting, Lula’s recent statements suggest that stricter regulatory and enforcement measures could be introduced in the near future. While authorities have not yet released detailed plans outlining the exact nature of the upcoming restrictions, the combination of social welfare concerns, rising tax pressure, and ongoing regulatory intervention signals the likelihood of a more restrictive operating environment for the online betting sector in the years ahead.

By fLEXI tEAM