On October 7, 2025, a congressional joint committee in Brazil approved a significant legislative change that mandates licensed betting operators to pay taxes on gambling operations retrospectively from 2014. The government predicts this retroactive taxation could generate approximately BRL5 billion ($560 million), mirroring three years of revenue expected if a proposed gambling tax hike to 18% had been executed.
Initially, the betting industry in Brazil braced for a substantial tax increase as outlined in PM 1,303, which proposed raising the gambling tax rate to 18% of Gross Gaming Revenue (GGR). However, just before the vote, the bill’s rapporteur, Carlos Zarattini, introduced last-minute amendments that eliminated this tax rate hike, a move speculated to be due to insufficient support in Congress.
Despite removing the tax increase, Zarattini’s amendments introduced the Special Regime for the Regularisation of Exchange and Tax Assets (RERCT Litígio Zero Bets). This regime aims to tax operators retrospectively for activities conducted before the regulatory framework was established on 1 January 2023.
The amended PM 1,303 narrowly passed with a 13 to 12 vote on Tuesday and is now on its way to the Senate and Chamber of Deputies for further approval, expected by the end of Wednesday. Should the bill fail to secure congressional approval by then, operators will revert to the previous 12% GGR tax rate set before the provisional measure was introduced in June.
In addition to these changes, Zarattini’s proposal includes measures to combat illegal gambling operations, mandating internet service providers to take down illicit gambling content within 48 business hours.
The retroactive tax program under RERCT Litígio Zero Bets stipulates a 15% tax on gambling activities from 2014 to 2024. This tax comes with an additional fine of 15%, resulting in a total financial obligation of 30% for operators who participated in the grey market. Participation in this scheme is voluntary, allowing operators a 90-day window from the text’s publication to declare their assets voluntarily. Zarattini remarked on the importance of these measures to ensure past dues reach public funds.
An August working group projected that the retroactive tax initiative could funnel up to $2.3 billion into government accounts.
The voluntary nature of this taxation raises questions about why operators would choose to comply. Legal experts like Udo Seckelmann from Bichara e Motta Advogados suggest that voluntary participation might offer operators legal certainty, helping them avoid long-running tax disputes while signaling goodwill to regulatory authorities. “Voluntary participation might limit future liabilities, demonstrate good faith toward regulators, and stabilise relationships with authorities,” Seckelmann explained.
Conversely, some operators may contest the rationale behind paying retroactive taxes, especially since they entered the market under different legal and fiscal conditions. Brazilian iGaming expert Elvis Lourenço acknowledged this viewpoint, noting that while the programme provides a path to declare past undeclared assets legitimately, those who view retrospective taxes as unconstitutional could opt for legal battles over compliance.
Lourenço also emphasized that the proposal remains subject to political negotiations, with the potential for additional amendments or even complete dismissal of the bill.
The removal of the proposed 18% tax rate hike is seen as a win for operators, yet the obligation to declare prior undeclared assets could unsettle those who operated before regulation. Seckelmann expressed concerns that retrospective taxation might erode legal certainty and investor confidence, potentially deterring compliance and future investments. “Applying retrospective taxation could undermine legal certainty and investor confidence, discouraging compliance and future investment,” he warned.
In contrast, Lourenço argued that the amendments bring “greater clarity and predictability” to Brazil’s betting market, which is beneficial for regulatory stability. For those who made profits in the pre-regulation era, the voluntary compliance route offers a means to settle potential liabilities. For operators who incurred losses or barely broke even, the programme might hold little relevance, given a lack of taxable base.
Ultimately, whether the PM 1,303 passes or not, Seckelmann hopes the gambling industry will engage in public dialogues to ensure fair implementation of the measures. “If the PM is approved with such proposals, operators should analyse the fiscal impact, engage with industry associations, and prepare for regulatory or judicial developments,” he urged.
As Brazil moves forward with this legislative change, the outcome will not only shape the fiscal landscape for gambling operators but also set a precedent for how regulatory frameworks might evolve in the future.
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