Brazil has taken one step forward toward establishing a regulated remote gambling industry. Last week, the Communications Committee of the Chamber of Representatives passed a bill prohibiting illegal gaming and betting nationwide. The legislation establishes the legal framework to bolster oversight and enforcement, including criminal, technological, administrative, and financial repression against unlicensed gaming operators. Lawmakers have also proposed introducing a 15% levy on betting deposits. However, experts caution that the move may drive consumers toward offshore gaming platforms.
Brazil House Committee Approves Bill Prohibiting Illegal Gaming and Betting: Quick Overview
- The legislation, presented by Senator Paulo Bilynskyj, introduces a series of measures to prevent illegal gambling nationwide. Proposed actions include creating financial hurdles, DNS disruptions and IP blockages.
- The bill does not affect licensed operators and is designed to prevent unregulated gambling. It defines an unauthorised operator as an individual or entity offering gaming or betting services without an official permit.
- Lawmakers have proposed introducing a 15% tax on bettors’ deposits as Contribution for Intervention in the Economic Domain (CIDE). The new tax is estimated to generate an additional BRL 30 billion (roughly €4.7 billion) in annual revenue.
New Bill to Establish Financial Control and Create Digital Hurdles for Unlicensed Gaming Operators
Brazil’s Communications Committee of the Chamber of Representatives, on Friday, December 5, approved a bill to establish a legal framework to combat illegal betting and gambling. The bill proposes a series of measures to regulate unauthorised betting activities, ensuring a safer gambling environment across the country.
Presented by Delegate Paulo Bilynskyj, the bill establishes the legal framework to financially, technically and legally ban illicit gambling operators. The bill does not alter the gaming legislation. Instead, it defines unregulated operators as individuals or entities offering betting and gaming services without a permit from the Treasury.
This classification enables lawmakers to flag gambling-related transactions, block websites and impose sanctions on unlicensed operators, as well as intermediaries, service providers, promoters, and anyone else facilitating such services. Financial repression is one of the pillars of PL 4044/2025.
The bill mandates that payment systems, including banks, card issuers, and fintech companies, must identify and block transactions related to illegal gambling. These institutions must also submit monthly reports of preventive action, without violating the consumer’s right to privacy.
The bill mandates that the Central Bank must regulate Pix, the national instant payment system. Proposed measures include creating an exclusive transaction model for betting, inclusion with self-exclusion directories, visual markings on statements, and automatic CNAE (National Classification of Economic Activities) filters and Pix keys.
The bill outlines penalties for violators, which include fines of up to BRL 20 million (approximately €3.14 million) and imprisonment of up to six years. It reinforces the role of Brazil’s national telecommunications agency, ANATEL, in combating illegal gambling and coordinates technical measures and enforcement.
Government Proposes a 15% Tax on Sports Betting Deposits
Brazil’s Senate Plenary proposed levying a 15% Contribution for Intervention in the Economic Domain (CIDE) on sports betting. The measure is a part of wider legislation that the Senate approved with a 64-0 majority. The bill must now clear the Chamber of Deputies before it reaches the President’s office.
The National Association of Games and Lotteries (ANJL) has cautioned against the side effects of the proposed tax bracket. It argues that the proposed measures need to be discussed with industry stakeholders, since they are part of a legal framework for combating organised crime.
The association claims that higher taxes will also interfere with guidelines that protect user interests and those guaranteeing the economic viability of licensed operators. Despite concerns, the Senate plenary approved PL 5.582/2025 on Wednesday, December 10.
The ANJN claims that no country has successfully taxed bettors’ deposits. It highlighted that consumers tend to switch over to offshore gambling sites at the faintest hint of paying taxes. The Brazilian Institute for Responsible Gaming (IBJR), which recently partnered with the ANJN to protect Brazil’s legal betting market, echoed the sentiments.
The institute claims that by taxing bettors’ deposits at 15%, the state creates a situation where BRL 100,000 (roughly €15,760) is worth BRL 85,000 (approximately €13,396). On the contrary, the value remains the same on the black market, encouraging players to visit offshore gaming sites.
Senator Alessandro Vieira supported the additional tax as a means to finance the fight against illicit gambling operators. He explained that the 15% CIDE would generate an additional BRL 30 billion (nearly €4.7 billion) for the state. Plínio Lemos Jorge, the President of the ANJL, cautioned that the extra tax burden could have severe financial repercussions.
Jorge stated:
There is a misconception that the total tax burden would be only 12%. In practice, this 12% represents an additional component to all the taxes already paid by any company in Brazil. Our concern is that the proponents of the measure are not clear about its impacts and the serious economic consequences it will bring to the sustainability of the regulated market.