The Brazilian Senate has approved PLP 128/2025, confirming a gradual increase in the GGR tax to 15% by 2028. Learn how this, alongside new JCP rates, impacts the iGaming market in 2026.
he “Tax War” in Brazil’s iGaming sector has reached a decisive turning point. On the evening of Wednesday, December 17, 2025 , the Brazilian Senate Plenary approved PLP 128/2025 , a sweeping fiscal package designed to balance the 2026 federal budget.
Buried within this legislation are the new rules of engagement for the betting industry: a confirmed gradual increase in the Gross Gaming Revenue (GGR) tax , starting in 2026.
For operators who have spent 2024 and 2025 preparing for the regulated market under a promised 12% tax rate, this move represents a significant shifting of the goalposts. However, compared to the more aggressive proposals floated earlier in the year (some reaching 18% or even 24%), the approved measure offers a predictable, albeit more expensive, path forward.
This article details exactly what was approved, the specific timeline for the tax hikes, the changes to corporate interest (JCP), and the strategic implications for the Brazilian market in 2026.
The Verdict: What Did the Senate Approve? The bill, PLP 128/2025 , passed with a commanding vote of 62 to 6 . It is part of the federal government’s broader strategy to reduce tax deficits by cutting incentives across various sectors. For the betting industry, it locks in a stepped increase in the tax burden.
The New GGR Tax Ladder Operators were originally licensed under Law 14.790/2023 with a fixed 12% tax on GGR (Gross Gaming Revenue = Bets minus Wins). The new law replaces this static rate with a progressive ladder:
Current Rate (2025): 12%2026 Rate: 13% 2027 Rate: 14% 2028 Rate: 15% (Capped)
The Silver Lining: Earlier in December 2025, the Senate’s Economic Affairs Committee (CAE) had approved a different bill (PL 5473/2025) that proposed an 18% tax rate. The industry lobbied hard against this, arguing it would render the regulated market uncompetitive. The final approval of PLP 128/2025 at a 15% cap is viewed by many as a “damage control” victory—a compromise that raises costs but avoids the catastrophic 18-25% rates seen in other jurisdictions.
Where Does the Money Go? The additional revenue is strictly earmarked. According to the text, 50% of the tax increase will fund Social Security, while the remaining 50% is allocated to public health initiatives.15 This political framing helped ensure the bill’s rapid passage, as few senators were willing to vote against funding for health and pensions.
The JCP Shock: Impact on Corporate Finance While the GGR tax grabbed the headlines, a more technical change in PLP 128/2025 will hurt the bottom line of major operators and fintechs operating in Brazil.
The bill increases the Withholding Income Tax (IRRF) on Interest on Equity (JCP) .
What is JCP?
Interest on Equity (Juros sobre Capital Próprio) is a unique Brazilian financial instrument that allows companies to distribute profits to shareholders while treating those payments as a tax-deductible expense (reducing their corporate income tax). It is a critical tool for ROI in Brazil.
The Change:
Starting in 2026, the withholding tax on JCP payments rises from 15% to 17.5%.
Why it Matters:
For international gambling groups (like Flutter, Entain, or Bet365) with Brazilian subsidiaries, JCP was the most efficient way to repatriate profits. This hike effectively increases the cost of doing business and lowers the net return for foreign investors.
The “CIDE-Bets” Bullet Dodged (For Now) Perhaps the most important news for 2026 is what didn’t pass.
Simultaneously, the Senate was considering the “Anti-Faction Bill” (PL 5582/2025), which included a controversial proposal for a 15% tax on player deposits (dubbed “CIDE-Bets”).
The Threat: Industry bodies like the IBJR (Brazilian Institute of Responsible Gaming) warned that taxing deposits would instantly kill the regulated market. If a player deposits R$100 and only gets R$85 to play with, they will immediately switch to an illegal crypto casino where R$100 equals R$100.The Outcome: On December 16, 2025 , widely due to industry pressure, the vote on the deposit tax was postponed to 2026 .
Warning for Affiliates: This battle is not over. The proposal is shelved, not dead. Expect the “Deposit Tax” debate to resurface in Q2 2026 as the government seeks new revenue sources.
The 2026 Timeline: When Do Rates Change? Brazil’s constitution includes a principle known as Noventena (the 90-day rule). The government cannot increase an existing tax without a 90-day notice.
Late Dec 2025: President Lula sanctions PLP 128/2025.January 1, 2026: The law is published.Q1 2026 (Grace Period): Operators continue paying 12%.April 2026: The new 13% GGR rate enters into force.
This gives operators a brief window in Q1 2026 to maximize player acquisition before margins tighten.
Market Reaction: The “Illegal Market” Fear The reaction from trade bodies like the ANJL (National Association of Games and Lotteries) has been cautious. While relief exists that the rate stopped at 15% rather than 18%, the cumulative burden is heavy.
When you add up the taxes, a “white market” operator in Brazil in 2026 pays:
13% GGR Tax (rising to 15%)ISS (Municipal Tax): 2% – 5%PIS/COFINS: 9.25% (on revenue)Corporate Tax (IRPJ/CSLL): ~34% on profitsInspection Fee: Up to R$ 2 million/month for large operators.
The Consequence:
Analysts predict a “Price War” on Odds. Licensed operators, squeezed by taxes, may have to lower their odds (increase the vigorish) to maintain profitability.
Illegal Market: Offers 98% Payout (2% Margin).Legal Market: May be forced to offer 92% Payout (8% Margin) to cover taxes.
This disparity creates a massive opportunity for the black market, which pays zero tax. In 2026, the government’s ability to block illegal IPs and payments will be the deciding factor. If enforcement is weak, the tax hike will backfire, driving players to Curaçao-licensed sites.
Strategic Pivot for Operators & Affiliates With the fiscal rules set, here is how the industry must adapt in 2026.
For Operators: Efficiency & “Tropicalization”
Cost Control: The era of “growth at all costs” is over. With higher taxes, operators will slash marketing budgets that don’t have immediate ROI. Expect fewer massive sponsorship deals with football clubs.Joint Liability: PLP 128/2025 introduces “Joint Liability” for advertisers If an affiliate promotes an illegal brand, the affiliate can be held liable for the unpaid taxes of that operator.Operators must audit their affiliate networks strictly to ensure compliance.
For Affiliates: The “Compliant” Premium
Review Your Partners: Promoting unlicensed brands in 2026 carries legal risk. Stick to the “Sigla Rio” (regulated) list.SEO Shift: Players will be searching for “Best Odds.” Since legal operators might lower odds, affiliates who can find the “sweet spot” operators—those who eat the tax cost to offer competitive odds—will win the traffic war.Education: Content explaining why a player should bet on a taxed site (consumer protection, guaranteed payouts) becomes vital to combat the flight to the black market.
The Political Context: Why the Hike? Why did the Senate change the deal only one year after the initial regulation? The answer is the Fiscal Framework .
The Brazilian government aims to achieve a “Zero Deficit” target in 2026. The betting sector, viewed as a “sin industry” with high liquidity, was an easy target. The narrative sold to the public was simple: taxing bets funds the Health System (SUS).
Senator Randolfe Rodrigues, the bill’s rapporteur, stated:
“This proposal aims to reduce incentives… moving towards greater fiscal responsibility and combating distortions.”
This rhetoric suggests that the tax environment will remain hostile. Operators should not expect tax cuts in the near future; the battle will be to prevent further increases (like the dormant Deposit Tax).
Conclusion: A Mature, Costlier Market Brazil in 2026 is no longer a gold rush; it is a mature, high-stakes battleground. The Senate’s approval of a gradual tax rise provides certainty, but at a price.
The winners in 2026 will not be the operators with the flashiest ads, but those with the most efficient tax structures and the deepest retention loops. For the international giants, a 15% tax is painful but manageable—still lower than the UK’s 21%. For smaller local operators, however, this hike, combined with the license fees, may force a wave of M&A (Mergers and Acquisitions) as they struggle to survive the squeezed margins.
Summary of Changes (PLP 128/2025):
Tax Type 2025 Rate 2026 Rate 2027 Rate 2028 Rate GGR Tax 12% 13% 14% 15% JCP Tax 15% 17.5% 17.5% 17.5% Player Deposit Tax 0% 0% (Vote Postponed)TBD TBD
