Luck, chance, and taxation: Impacts of Bill 5.076/25 and reform on betting.
Luck and chance are concepts that have accompanied humanity since its beginnings, being applied to the same contexts and, therefore, often confused with each other. Luck represents the emotional element of unpredictability that escapes logic and reason, being associated, in various cultures, with symbols, rituals and/or superstitions that would allow one to gain advantages over the uncertain. Chance, in turn, is the rational element of unpredictability, which represents the apparent absence of causality between events and is studied by statistical and probability theories in order to quantify the uncertain and transform risk into opportunity.
Betting houses, like stock exchanges, are just one point of convergence between these two concepts. They are a structured economic system that, through probabilistic and statistical mathematical algorithms, very precisely confront human behavior and previously unpredictable events. The bettor faces chance in a controlled way, dueling, with greater or lesser skill, with the "house" within the reach of luck.
The fixed-odds betting market, due to its breadth and social reach, has always demonstrated a high contributory capacity. The Public Authorities, attentive to this potential, consolidated in Law 14.790/23¹ a minimum regulatory framework of legality and good conduct for operators in the sector, subjecting them to the same taxation applicable to other business activities (Corporate Income Tax, Social Contribution on Net Profit, PIS/Cofins and, in some municipalities, ISS). The law also established specific social allocations of revenue, according to Article 30, §1 and its subsections of Law 13.756/18² , determining the application of 12% on the adjusted gross revenue (“Gross Gaming Revenue” – GGR).
The data from 2024 and 2025 highlight the economic weight of sector 3 :
⇒ Average spending per active user in the first half of 2025 was R$ 983,00;
Online betting companies grossed approximately R$ 17,4 billion during the period;
The Brazilian Federal Revenue Service recorded R$ 4,73 billion in taxes on betting in the first seven months of 2025 – with R$ 2,6 billion coming from betting and R$ 2,1 billion from traditional lotteries.
Provisional Measure 1.303/25 was issued by the Executive Branch to, in various ways, reinforce revenue collection and rebalance the national economic balance, which has been marked by a constant increase in public spending. Among the changes it proposed, in its article 61, was the amendment of article 30, §1 of Law 13.756/18 to create an additional contribution of 6% on the gross revenue of betting companies destined for social security to finance actions in the health area. Thus, the net revenue of these companies, during its validity, went from 88% to 82%.
Despite all the efforts of the federal government's allied base, the Provisional Measure was not converted into law. For this reason, on October 9th of that year, Congressman Lindbergh Farias (PT/RJ), the party's leader in the Chamber of Deputies, filed Bill 5.076/25 . The new text has been under urgent consideration since the 22nd of the same month and proposes maintaining the specific allocation created by the Provisional Measure and increasing its rate to 12%. In this way, the total discounts on the GGR would reach 24%, doubling the percentage initially foreseen in the law and reducing the operators' operating margin to 76%.
The main justifications used by the legislator were:
The country already has around 2 million people with gambling addiction;
⇒ Records of care provided to people with symptoms of pathological gambling in the public health system increased by 300% from 2022 to 2024;
⇒ Data from the Brazilian Society of Retail and Consumption showed that, in Brazil, 63% of those who gamble had part of their income committed to betting, 19% stopped shopping at the supermarket, and 11% did not spend on health and medicine;
⇒ The total tax burden on the sector, estimated at 27%, would be lower than that observed in countries such as France (55%) and Germany (48%).
Despite all the criticisms made by the parliamentarian regarding the market as a whole, research conducted by LCA 6 , the Locomotiva Institute 7 , and Cruz Consulting 8 (funded by the National Association of Games and Lotteries itself) indicates that perhaps a good part of the negative externalities can be attributed to the State's inefficiency in monitoring and penalizing the illegal market. Among the data obtained, the following stand out:
⇒ Over 11 irregular domains were deactivated as a result of the legalization process;
⇒ 2.000 people interviewed between April and May 2025: 61% gambled on illegal websites / 78% did so without facial recognition, using credit cards or cryptocurrencies / 77% used only or mostly irregular platforms / and 48% find it difficult to differentiate between regulated and unregulated means;
Illegality accounts for between 41 and 51% of the betting market;
⇒ Between February and April 2025, considering specific allocations and withholding tax on prizes, the estimated revenue loss is between R$ 7,2 and R$ 10,8 billion;
⇒ 803 people benefiting from social programs interviewed between October 15 and 18 in the metropolitan region of São Paulo: 75,14% have supplementary income / 19,45% participate in Bolsa Família / 55,19% gamble up to once a week / 68,20% bet less than R$ 50,00 per month / 45,08% would migrate to illegal sites if the use of social programs for gambling were prohibited / 69,07% gamble for money.
These data, combined with the market's previously demonstrated financial capacity, indicate that the most reasonable course of action would eventually be to dedicate greater efforts to monitoring, penalizing, and shutting down irregular domains, and educating consumers about the fact that gambling is not an investment, how to identify illegal platforms, the risks involved, and the importance of the responsible use of income from social programs.
In any case, although the congressman provided an estimate for the taxation of betting houses, he did not detail which taxes were considered in the calculation. Therefore, it becomes interesting to simulate the tax burden if the new wording is approved. The scenario would be as follows:
⇒ Corporate Income Tax (IRPJ) and Social Contribution on Net Profit (CSLL) : combined rate of 34% on actual or presumed profit;
⇒ PIS and Cofins : 3,65% or 9,25% on gross gaming revenue, depending on the tax regime;
⇒ ISS : 2% to 5% on the same calculation basis as above, depending on the municipality;
⇒ Specific allocations : 24% of GGR.
Considering the percentages indicated above, after the bill, the nominal taxation to which bets would be subject would increase from approximately 60,25% to 72,25%.
The specific nature of "specific allocations" is controversial in itself, as it refers to federal lotteries, which are state-owned, allowing for direct allocation of revenue – since their ownership is public. In the case of betting houses, it is an authorization for the operation of a public service (article 29, caput of Law 13.756/18 in conjunction with article 9, caput of Law 14.790/23), and this direct allocation is more similar to the taxation levied on the revenue of private entities. The 24% portion allocated to social security could be framed within the provision of article 195, III, of the Federal Constitution (social contribution on revenue from prediction contests). However, all the remainder that is not strictly destined for social security, such as security, education, sports, culture, tourism, would not fall under either article 195 or article 149, leaving only the residual competence of article 195. Article 154, I, of the Constitution allows for the establishment of new taxes – which require a supplementary law and must be "non-cumulative and not have a generating event or tax base of their own as those specified in this Constitution." Therefore, collection via ordinary law – originating from current or future legislation, should the bill be approved – would tend to be unconstitutional.
The enactment of EC 132/23 9 and the enactment of LC 214/25 10 redesign consumption taxation, replacing current taxes with the establishment of a Value Added Tax (“dual VAT”) – comprised of the IBS and the CBS – Contribution on Goods and Services – and a IS – Selective Tax.
The changes proposed by the LC directly affect fixed-odds betting market players, because the three new taxes will burden their operations as follows:
⇒ Chapter IV (articles 244 to 248) establishes the collection of IBS and CBS on the net revenue of betting houses, after deducting prizes paid and mandatory allocations by law to public bodies or funds and other beneficiaries. These taxes, respecting the rate cap provided for in article 475, §11, will have combined rates of 26,5%;
⇒ Articles 409, VII, 414, V and 422, caput, provide for the application of the IS tax on net revenue at a rate yet to be defined by ordinary federal legislation.
This scenario, coupled with the potential approval of Bill 5.076/25, projects a significant increase in the sector's tax burden, potentially raising the nominal tax on betting revenues to 84,5% from 2033 onwards, not including the IS (which still has no defined percentage).
In our view, the above measure does not represent the most strategic approach to protecting fiscal balance and safeguarding the finances of the average Brazilian. This is because the research mentioned throughout this article, in addition to the highlighted data, demonstrates the still significant power of irregular settlements in reducing tax revenue now and after the reform, diverting the intended purpose of income distributed in social programs, and exposing consumers to an environment of uncertainty and a tendency towards indebtedness.
In any case, the chain of events presented here reveals a continuous trend of increasing the tax burden and intensifying state control over the betting sector. While we disagree with this, we argue that, at the very least, this process should be calibrated so as not to hinder free enterprise or discourage the formalization of the market. The balance between revenue collection, regulation, and economic viability is key to consolidating a safe, transparent, and competitive environment – capable of sustaining the growth of the fixed-odds betting market in Brazil without compromising its social and economic function.
If the intention is to regulate betting, precisely to avoid or mitigate its potential negative externalities, including enabling tax collection, then it is not good legislative policy to stifle the sector.
(*) Cristiano Rosa de Carvalho is a tenured professor of Tax Law (USP), holds a Master's and Doctorate in Tax Law (PUC-SP), and a Post-Doctorate in Law and Economics (UC Berkeley). He is a lawyer in Brazil and Portugal. Eduardo Pires Santana is a tax lawyer with experience in strategic consulting and litigation, a postgraduate student in Corporate Tax Law, and the author of articles on Tax Reform and digital taxation. The article was published by Migalhas.
1 BRAZIL. Law No. 14.790, of December 30, 2023: provides for the lottery modality called fixed-odds betting; amends Laws No. 5.768 and 13.756 and Provisional Measure No. 2.158-35; revokes provisions of Decree-Law No. 204 and provides other measures. Presidency of the Republic. Available at: https://www.planalto.gov.br/ccivil_03/_Ato2023-2026/2023/Lei/L14790.htm. Accessed on: October 26, 2025.
2 BRAZIL. Law No. 13.756, of December 12, 2018: provides for the National Public Security Fund (FNSP), the allocation of proceeds from lottery collection, and the commercial promotion and lottery modality known as fixed-odds betting; amends other laws and repeals provisions. Presidency of the Republic. Available at: https://www.planalto.gov.br/ccivil_03/_Ato2015-2018/2018/Lei/L13756.htm. Accessed on: October 26, 2025.
3 PUPULIM, Pedro. Caixa wants to launch its own online betting platform. VEJA. October 25, 2025. Available at: https://veja.abril.com.br/coluna/radar/caixa-quer-lancar-propria-plataforma-de-apostas-online/ . Accessed on: October 25, 2025
4 BRAZIL. Provisional Measure No. 1.303, of June 11, 2025: provides for the taxation of financial investments and virtual assets in the country and takes other measures. Presidency of the Republic. Available at: https://www.planalto.gov.br/ccivil_03/_ato2023-2026/2025/mpv/mpv1303.htm. Accessed on: October 26, 2025.
5 BRAZIL. Bill No. 5.076 of 2025: amends Law No. 13.756 of December 12, 2018, which provides for the National Public Security Fund (FNSP), the allocation of proceeds from lottery collection, and the commercial promotion and lottery modality known as fixed-odds betting; amends Laws No. 8.212, 9.615, 10.891, 11.473 and 13.675; repeals provisions of several laws and provides other measures. Chamber of Deputies. Available at: https://www.camara.leg.br/proposicoesWeb/prop_mostrarintegra?codteor=3019259&filename=PL%205076/2025. Accessed on: October 26, 2025.
6 LCA CONSULTORIA ECONÔMICA. Off the Radar: sizing and socioeconomic impacts of the illegal betting market in Brazil. São Paulo: LCA Consultoria Econômica; IBJR – Instituto Brasileiro do Jogo Responsável, June 2025.
7 LOCOMOTIVA INSTITUTE. Incidence of illegal betting in Brazil. São Paulo, 2025. National quantitative research report, conducted between April and May 2025, with 2.000 interviews, margin of error of 2,2 pp and confidence level of 95%.
8 CRUZ CONSULTING. Sectoral diagnostic research: Bets versus Social Program. Metropolitan Region of São Paulo, October 2025. Public opinion research report, 803 face-to-face interviews, margin of error of 3,5 pp, confidence level of 95%.
9 BRAZIL. Constitutional Amendment No. 132, of December 20, 2023: amends the National Tax System. Presidency of the Republic. Available at: https://www.planalto.gov.br/ccivil_03///////Constituicao/Emendas/Emc/emc132.htm. Accessed on: October 26, 2025.
10 BRAZIL. Complementary Law No. 214, of January 16, 2025: establishes the Tax on Goods and Services (IBS), the Social Contribution on Goods and Services (CBS) and the Selective Tax (IS); creates the IBS Management Committee and amends tax legislation. Presidency of the Republic. Available at: https://www.planalto.gov.br/ccivil_03/leis/lcp/Lcp214.htm. Accessed on: October 26, 2025.
