Brazil’s Taxation Debate on Betting Takes a Turn

Former Speaker of the House Arthur Lira, Sao Paolo, argued that Brazil’s Federal Government should prioritise enforcement against illegal betting operators before pursuing higher taxes on regulated companies. Speaking to reporters at an event in the city’s vibrant events sector, Lira described gambling as an “inevitable” activity in Brazil and warned that heavy-handed policy moves risk pushing activity toward unlicensed platforms.

Lira’s framing centers on the regulatory asymmetry between licensed operators and illicit platforms. He said authorities should focus on illegal sites that evade taxation and facilitate money laundering through fintech channels, arguing that tax hikes on compliant operators while illegal operators operate unchecked would distort the market. “Citizens will continue gambling regardless of government policy,” he noted, suggesting regulation and enforcement of existing operators may be more practical than trying to eradicate the activity altogether.

Key Developments

The remarks come amid a broader policy conversation on betting taxation. National Congress discussions have already rejected Provisional Measure 1,303, which would have raised the tax rate on betting company profits from 12% to 18%. Other government proposals under consideration envisage rates climbing as high as 24%. Lira framed these potential increases as problematic if illegal platforms remain a larger share of the market, potentially creating uneven competitive conditions and a fiscal blind spot where revenue is lost to untracked activity.

Brazil’s regulatory environment for gambling has been evolving. Industry analysis cited by observers indicates that unlicensed platforms have captured a substantial portion of the market, underscoring enforcement challenges noted by Lira. In this context, critics of tax-focused reform say higher rates on compliant operators could paradoxically reduce legitimate engagement unless paired with robust enforcement against illicit operators and clear licensing pathways.

Lira’s comments were made at an event celebrating the country’s events sector, where he was recognized for his role in securing the Perse program—a pandemic-era tax benefit that supported the industry before ending in 2025. While the Perse program’s sunset marks a shift in fiscal policy, the funding landscape for the events and gambling-adjacent sectors remains closely watched as regulators weigh incentives, taxation, and enforcement mechanisms.

The debate over betting taxation continues as Brazil’s gambling sector undergoes substantial regulatory development. Recent industry data point to a competitive disparity between licensed and unlicensed operators, highlighting the enforcement challenges that Lira referenced. The central question for policymakers remains whether to prioritize closing the tax and compliance gaps within the legal market or to pursue broader taxation increases in the absence of stronger enforcement against illegal platforms.

In a broader sense, the debate touches on two competing objectives: maximizing tax revenue from a regulated industry and curbing illegal betting that evades oversight and facilitates illicit financial flows. Analysts and policymakers are likely to scrutinize enforcement capacity, licensing frameworks, and anti-money-laundering measures in tandem with any changes to tax policy to avoid amplifying the very gaps Lira highlighted.

Follow-up perspectives to watch:

• How will regulators operationalize intensified enforcement against illicit betting sites, and what timeline is envisaged?
• What licensing reforms or player protections—such as consumer safeguards, fraud prevention, and AML controls—will accompany any tax changes?
• Will empirical data on illegal market share drive adjustments to both fiscal policy and enforcement resources?