The resistance of parliamentarians to resuming the increase in taxation on sports betting, the so-called “bets”, became the main obstacle of the Lula government in negotiations to compensate for the loss of revenue after the overturn of the Provisional Measure (MP) that provided for tax increases.
The original proposal, published in June, envisaged increasing the rate on the gross revenue of bookmakers from 12% to 18%, minus the prizes paid to players, which would generate around R$1.7 billion extra in 2026. With a lack of consensus with parliamentarians, on the eve of the end of the MP’s processing deadline, the rapporteur, deputy Carlos Zarattini (PT-SP), gave up on increasing the taxation of bets in its opinion released on October 6th.
On October 8, the text was buried by the Chamber of Deputies without even going to a vote in the 120 days it was in force, the maximum period for one MP. After strong pressure from parliamentarians linked to the centrão, the PL and agribusiness sectors, the text ended up expiring without being voted on, even after several concessions from the government, including the withdrawal of taxation on bets.
With the overthrow of the MP, the government needs to adjust around R$35 billion in the 2026 Budget. To balance the books, the Treasury is now betting on expense containment measures and the so-called “BBB taxation” — which includes banks, bets and billionaires. In a hearing in the Senate, the minister Fernando Haddad argued that these measures are fair and necessary to correct distortions in the tax system.
“I have already received a nod from several parliamentarians to correct what happened. Let’s look for alternatives to what happened, because, in fact, the so-called taxation of BBBs (banks, bets and billionaires) is only unfair in the minds of people who are uninformed about what is happening in Brazil”, he said.
According to government leaders, the group in favor of betting is spread across different parties and works to block any attempt to increase taxes. Technicians from the economic team admit that it will be difficult to rebuild an agreement, although the government is considering re-presenting the proposal in bill format. A PT deputy states that the government should not send a bill to Congress now to return to the issue, but rather later.
In the opinion of members of the Lula government, there is greater political space to resume cost containment measures. They could yield savings of R$15 billion next year.
Fonte Gaming365 – Brasil
