Brazil’s lower chamber fails to pass latest provisional tax measure

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2025/07/01: Rhode Island expanded sports betting bill fails to pass 2025/05/23: Lower sports betting tax rise proposed in Louisiana 2025/08/05: Argentinian lawmaker launches petition to support underage gambling prevention measure 2025/08/12: Brazil weighs up retroactive tax collection from operators

The Backstory

Setting the stage

Debates over sports betting are converging on two themes: how much governments can tax the fast-growing sector and how tightly they should police access, especially for minors. The stakes rose this summer as Brazil’s fiscal plans stumbled, U.S. states split on market structure and rates, and Argentine officials escalated calls to shield young users from the surge in online wagering.

In Brazil, a pivotal fiscal measure meant to shore up next year’s budget collapsed, reopening questions about where the government will find revenue and how hard it will lean on newly regulated betting. In the United States, Rhode Island paused efforts to loosen a single-operator model while Louisiana moved to hike levies on mobile wagering to plug a looming deficit. In Argentina, lawmakers and advocates intensified a push to curb youth gambling, reflecting social risks that are increasingly shaping regulatory choices across markets.

Brazil’s fiscal squeeze and the search for revenue

Brazil’s Chamber of Deputies withdrew provisional measure 1,303/2025, derailing an attempt to adjust taxes and spending for 2026 and forcing the administration to consider contingencies and budget blocks to hit a slim primary surplus target next year. The setback reduces near-term certainty around the tax mix and raises the odds that the regulated betting sector will be tapped for more revenue after an initial round of changes this year. The measure’s withdrawal, which blocked a Senate vote before its deadline, followed revisions that had already pared back a proposal to lift the online sports betting rate to 18 percent. The government still faces a gap after the withdrawal’s projected BRL20.9 billion in revenue and BRL10.7 billion in savings fell away, heightening pressure on easier-to-tax segments like gaming. For details on the failure of the fiscal package and its implications for betting receipts, see the report on the withdrawal of provisional measure 1,303/2025.

The finance ministry has also explored whether to collect taxes retroactively from operators that earned revenue in Brazil before formal regulation took effect. A working group is assessing liabilities that could reach BRL12.6 billion across as many as 135 firms, according to officials cited in local reports. That provides a potential backstop if Congress balks at forward-looking rate hikes. The ministry has signaled audits could target income tax and PIS-COFINS where there was a “material presence” and revenue. Read more on the possibility of retroactive tax collection from betting operators.

The economic rationale is clear: wagering is already delivering cash. In the first half, Brazil collected BRL3.79 billion in gambling-related taxes, with BRL764 million booked in June alone. The market has expanded quickly since regulated online sports betting launched at the start of the year, supported by rapid user uptake and increased oversight. Policymakers view those results as proof that higher rates could raise more, though industry cautions that aggressive hikes could push play back to unlicensed sites. See the breakdown of H1 betting tax revenue in Brazil.

The shifting playbook reflects a broader tax policy rethink. In a separate move, the government agreed with congressional leaders to replace a decree that increased the financial transactions tax, a sign of negotiation over where new burdens should fall. That decision, which followed a joint meeting with the Chamber and Senate, underscored the search for alternatives to broad-based levies. For context on that pivot, see the Chamber’s summary of the decision to replace the IOF decree.

Stateside crosscurrents: taxing growth vs opening markets

U.S. states are moving in different directions on how to harvest revenue from betting and whether more competition brings better outcomes. In Louisiana, lawmakers advanced a bill that would raise the mobile sports betting tax to 21.5 percent from 15 percent, down from an initial proposal to more than double it. The plan preserves a 10 percent rate for retail wagers and designates slices of new revenue to college sports, special education and early childhood programs. With a US$338.9 million shortfall expected in 2026, Baton Rouge is testing whether higher take rates on digital wagering can help close the gap without stifling growth. See details of the Louisiana tax hike proposal.

Rhode Island took the opposite tack, shelving a bid to end its single-operator model before a key contract expires. Senate Bill 748 cleared the Senate but died when the House did not schedule a hearing before the deadline, leaving International Game Technology as the state’s sole sportsbook under a pact that runs through 2026. House leadership had signaled reluctance to entertain expansion until that agreement nears its end, and lottery and operator officials warned that opening the market could erode state proceeds. Read the summary of the Rhode Island bill’s failure, review the S.748 docket and related testimony from IGT and the lottery, and a session wrap noting expansion and underage safeguards under debate at the State House via Rhode Island Current.

The divergence illustrates the tradeoffs in policymaking. Louisiana is leaning on mobile volume to generate more dollars without changing the number of operators. Rhode Island is prioritizing predictability and contractual stability over potential consumer choice and promotional spend that can accompany open markets. Both approaches aim to protect public revenue but reflect different assessments of elasticity, channelization and political risk.

Argentina’s youth gambling alarm raises regulatory risk

Political and social pressure is mounting in Argentina after a spike in teen betting captured headlines and policymaker attention. A lawmaker from the Radical Civic Union launched a public petition to tighten controls on online platforms, including biometric identity checks and broader ad restrictions for social and traditional media. The measure is part of a raft of proposals consolidated in the Committee for the Prevention of Addictions, though progress has stalled in the Chamber and Senate as competing priorities crowd the legislative calendar. For the legislative push, see the overview of the petition and youth protection bill.

The statistics are fueling urgency. The Buenos Aires ombudsman’s office reported that one in four students ages 12 to 19 had gambled online at least once, underscoring the reach of offshore sites and social media influencers. Read the ombudsman’s findings on youth participation via the Defensoría report. Momentum has also grown outside the capital. Lawmakers advanced a bill aimed at curbing online gambling addiction that gained approval without support from key blocs, a sign of cross-party concern about the issue’s spread. See coverage of the addiction-focused bill’s passage.

For operators, the risk is twofold: tougher compliance requirements that raise onboarding costs and advertising limits that blunt brand building. For regulators, the challenge is closing gaps that allow minors to access offshore products while preserving tax flows from the regulated channel.

What to watch next

Brazil will be the bellwether. If retroactive tax collection proceeds or a fresh bet-tax hike returns to Congress, the country could cement a model where gaming serves as a fiscal pressure valve. H1 receipts show the base is meaningful. The question is whether higher rates push users off the grid, a dynamic officials say they plan to counter with enforcement.

In the United States, watch whether Louisiana’s Senate keeps the softer 21.5 percent rate and whether Rhode Island reopens the market once the IGT deal nears expiration. The policy choices will inform how states balance headline revenue against competition, consumer value and channelization.

Argentina’s next legislative steps will indicate how quickly social concerns translate into enforceable standards around identity verification and marketing. Any move there could echo across the region as neighbors weigh similar protections.

Across all three markets, the through line is the same: betting has matured into a meaningful budget lever, but public tolerance depends on credible safeguards. Tax design, market structure and consumer protection are now inseparable in the politics of gambling.