The Provisional Measure, which among other things increases the taxation on betting companies from 12% to 18%, was announced on Sunday (June 8), and Finance Minister Fernando Haddad has already presented the draft of the document to President Lula.
On the evening of Tuesday (June 10), at the Palácio da Alvorada, he met with Minister Haddad, the ministry’s executive secretary Dario Durigan, and the special secretary for Governmental Analysis of the Civil House, Bruno Moretti.
One of the issues to be addressed through this measure is the regulation of betting companies, which the government believes should be improved by the new legislation. Among the alternatives being considered is cracking down on illegal betting platforms.
Another possibility being discussed is the restriction of betting ments. This measure was floated within the Finance Ministry and has reached the Presidential Palace for President Luiz Inácio Lula da Silva’s (PT) review.
The draft includes a series of measures to offset the reduction of the IOF (Tax on Financial Transactions), among them the increased taxation on betting companies and online games. Although the minister has been defending an 18% tax on GGR (Gross Gaming Revenue), the government is concerned about a potential legal challenge.
Authorized companies have paid a concession fee of R$30 million (US$5.4m), and there is fear that the tax increase may lead to requests for cancellation of the concession and reimbursement of the amounts paid.
Industry associations have already warned of a potential drop in revenue if the GGR tax is raised to 18%, as this would push the total tax burden above 50%, forcing regulated companies to lower their odds to remain operational.
As a result, bettors will likely migrate to the illegal market, which doesn’t pay taxes and can offer more attractive payouts—even though bettors there have no guarantee of actually receiving their winnings.
The government is studying ways to effectively combat illegal betting operations but faces bureaucratic obstacles and difficulties at the National Telecommunications Agency (Anatel) in blocking unauthorized websites. Anatel has already blocked over 13,000 websites since October 2024, yet new URLs are created daily.
The head of the Finance Ministry also confirmed that one of the initiatives to increase revenue includes raising the tax on Interest on Net Equity (J) from 15% to 20%—a form of profit distribution from companies to shareholders.
In addition, he stated that the Income Tax on financial investments will be unified at a rate of 17.5%. When asked, Haddad did not specify the expected impact on federal revenue, only saying that the calculations are still in progress.
Source: GMB
