President Luiz Inácio Lula da Silva’s administration is intensifying efforts to levy taxes on Brazil’s rapidly expanding online gambling sector, aiming to bolster revenue for the 2026 national budget. Finance Minister Fernando Haddad’s initiative, branded under the “billionaires, banks and bets” agenda, targets R$35 billion (€6.2 billion) through levies on companies that have thrived in the country’s growing betting market. The government frames the proposal as both a fiscal necessity and a matter of fairness: firms benefiting from online gambling are expected to contribute proportionately to public resources, while the move also signals a commitment to mitigating social risks associated with gambling. For the administration, the taxation plan is as much about generating revenue as it is about demonstrating social responsibility.
Navigating a Fragmented Congress
Despite its potential, implementing the new taxes is proving politically challenging. Brazil’s Joint Budget Committee has postponed voting on the Budget Guidelines Law (LDO), citing disputes over spending cuts, revenue targets, and the distribution of fiscal responsibility. Many legislators warn that the political appetite for new taxes is waning, arguing that repeated efforts to increase levies could undermine public confidence and destabilise legislative consensus. For President Lula, the task is particularly delicate: he must balance ambitious social welfare initiatives with the realities of a multi-party legislature, where coalitions are fragile and consensus is difficult to achieve. The pressure is compounded by the approaching year-end budget deadline, which leaves little room for negotiation missteps.
Past Setbacks and Political Maneuvering
The government’s previous attempt to increase the gross gaming revenue (GGR) tax from 12 % to 18 % ended in dramatic failure. Just hours before the decisive vote, PT deputy Carlos Zarattini inserted a controversial amendment introducing a retroactive taxation mechanism known as “Litígio Zero Bets.” The move surprised allies, alarmed investors, and ultimately led to the proposal’s rejection by 251 votes. The episode underscored the difficulties of coordinating complex fiscal reforms in Brazil’s fragmented political environment and highlighted the fragility of the administration’s bargaining position within Congress. It also served as a stark reminder that even well-intentioned policy proposals can falter if procedural alignment and stakeholder buy-in are not secured.
A New Attempt at Revenue Reform
Undeterred by past setbacks, the government has returned with a renewed strategy. On 13 October 2025, PT chamber leader Lindbergh Farias submitted a bill seeking to raise the gambling tax rate to 24 % of GGR. The measure remains under review within party leadership, reflecting the need to strike a careful balance between fiscal ambition and political feasibility. Finance Minister Haddad must calibrate the tax rate to maximise revenue without alienating key legislative allies, while President Lula’s administration must navigate the broader challenge of maintaining credibility in its fiscal management. A successful reform could significantly strengthen funding for the government’s social programmes, but failure would leave the administration exposed to criticism and delay crucial budget planning.
The High Stakes of Gambling Taxes
Brazil’s focus on online gambling taxation illustrates the broader tension in managing economic policy amid political complexity. The initiative is not merely about revenue generation; it embodies the delicate interplay between public finance, political negotiation, and social responsibility. Lula’s government must engage in careful horse-trading with various congressional factions to secure passage, ensuring that the push for funds does not derail wider reform objectives. The stakes are high: the outcome of this legislative effort will influence not only Brazil’s fiscal trajectory but also the administration’s political credibility and capacity to deliver on social priorities. In this context, the taxation of online gambling represents a high-stakes gamble in which economic policy, political strategy, and social considerations intersect, shaping Brazil’s path for the coming year.
Written By:
*Dr Iqbal Survé
Past chairman of the BRICS Business Council and co-chairman of the BRICS Media Forum and the BRNN
*Cole Jackson
Lead Associate at BRICS+ Consulting Group
Chinese & Middle Eastern Specialist
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