Historical note. This article was published on 17 December 2025, before the Federal Senate's final approval of Complementary Bill No. 128/2025 and before the bill was sanctioned as Complementary Law No. 224 of 26 December 2025. It is retained as a record of the policy debate as it stood at that date. It is commentary and forecasting from before the vote, not a description of the law in force. For the enacted position, including the rate path and the effective dates governed by constitutional anterioridade, see the companion article at /insights/senate-approves-plp-128-2025-tightens-fiscal-policy-bets-fintechs and the statute text at https://www.planalto.gov.br/ccivil_03/leis/lcp/lcp224.htm.
The Federal Senate was scheduled to analyse, on 17 December 2025, Bill No. 128/2025, which proposed a gradual increase in the taxation applied to Brazil's regulated betting sector. The rate then in force was 12%, and discussion at the time pointed toward 15% by 2028. The Senate approved the bill that evening, and the rate path was subsequently enacted in LC 224/2025.
The debate on taxation is legitimate and necessary. However, when dealing with a recently regulated sector that is investment-intensive and still in its consolidation phase, the choice of path demands caution, technical analysis and long-term vision.
Higher taxation does not automatically mean higher revenue
One of the challenges commonly identified in the Brazilian betting market is the presence of illegal platforms. Third-party estimates cited by Instituto Locomotiva and Instituto Brasileiro de Jogo Responsável (IBJR) suggested at the time that a substantial share of players, reported in some coverage at around 60%, still used unauthorised operators outside the regulatory framework. Estimates of illegal market share are inherently difficult to measure, vary considerably by methodology and source, and are frequently produced by parties with an interest in the policy outcome. These figures are not Octus primary research and are not independently verified by Octus. They are reproduced as attributed context for the argument, not as established fact.
In this context, raising the tax burden on operators who have already regularised their position may produce the opposite of the intended effect. Rather than expanding the contributor base, an abrupt tax increase tends to reduce the competitiveness of the legal market, discourage new investments and strengthen the illegal ecosystem: which operates with no regulatory costs, no oversight and no institutional accountability.
International experience demonstrates that efficient taxation is not the same as maximum taxation. Countries that successfully consolidated regulated betting markets opted for balanced models capable of raising revenue, protecting consumers and, above all, structurally reducing the space occupied by illegal operators.
Direct impact on investments and legal certainty
Regulatory predictability is one of the pillars of legal certainty. Operators who entered the Brazilian market did so on the basis of a recently established regulatory framework that demanded significant investments in technology, compliance, anti-money laundering, governance, data protection and local operational structures.
When this environment undergoes abrupt changes: particularly in the tax field, without a proportional and previously signalled transition: the logic of confidence that underpins long-term investment decisions is ruptured. The immediate effect is not only economic but institutional: investors begin pricing regulatory risk as a central factor, making operations more expensive, restraining new capital and reducing the willingness of companies to expand or even maintain local structures.
Employment and economic impact
The gaming and betting industry in Brazil is no longer a marginal phenomenon. Today it sustains a broad and cross-sectoral economic chain involving technology, payment systems, marketing, advertising, sport, consumer services and specialised legal and regulatory services.
According to the study Panorama do Mercado de Apostas de Quota Fixa by LCA Consultores Econômica and Cruz Consulting (commissioned by IBJR and ANJL), direct employment in legalised betting was reported as generating approximately BRL 460 million per year in wages, plus BRL 87 million in social security contributions. Octus cites these study figures as third-party economic estimates; they are not Octus-produced statistics.
The path to strengthening the legal market
Strengthening the regulated market does not mean penalising those who chose legality. On the contrary: it requires a balanced tax environment capable of stimulating regularisation, expanding the contributor base and structurally reducing the attractiveness of the illegal market.
A balanced regulation combines revenue collection, legal certainty, consumer protection and incentives for responsible investment. International models commonly show that moderate rates, combined with rigorous oversight, effective sanctions and technological monitoring, are more effective at sustaining revenue collection, reducing illegality and protecting consumers than maximum rates alone. This paragraph is commentary, not a prediction of Brazilian fiscal outcomes.
Octus position
At Octus, we closely follow the normative evolution of the gaming and betting sector and work daily alongside operators who have chosen the path of legality, transparency and institutional responsibility. We advocate for technical, rational and data-driven regulation that considers the economic, social and competitive impacts of legislative decisions.