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Brazil's regulated betting market was meant to usher in a new era of stability. Instead, it's already facing its first major fiscal stress test. A proposed tax increase was passed by the Senate, and even though it looks like it's not going through, parts of the Congress and President Lula da Silva are sharpening their rhetoric on betting, raising a concerning question. Is Brazil moving toward long-term regulatory clarity, or entering a new phase of political volatility? Welcome to iGamingDelhi live from SVC Summit Rio 2026. And this episode is brought to you by Optimove, the creator of positionless marketing and number one player engagement solution for iGaming and sports betting operators. Today, um joining me Fernando Nott, video manager for SVC and your host for today is the great Ana Maria Menezes, researcher for SVC and uh a it girl of Brazil. How are you, Ana? All good. How are you enjoying the event? Honestly, this It Girl Brazil, how can I not be very happy? Thank you for very happy as well to be here. And I always love being on the podcast. So another great chance, especially today ah with our new joiner having him with us. Some of you may already know him, but if you are uh just a listener of iGaming Daily, this will be the first time he's... his first appearance on iGamingDaily, Leonardo Biazzi, brand new editor for SPC Notices Brasil. Leo, how are you today? How are you? I'm perfect, my friend. I'm enjoying Rio. I'm getting to know all my new colleagues, including you. It's been a good time and this is the first official date of the event, so let's go. Yeah, let's go. So, uh events, like I always say, great to see people face to face. And of course, if you are listening to this podcast still during the event time, make sure you stop by SBC Noticias Brasil stand to meet the crew and of course, SBC event stand as well. give us a shout if you see us and we'll be happy to talk with you, of course, at this lovely event, which is SBC Summit Rio 2026, arguably SBC Summit Rio best event by SBC. So I was mixing up my prepositions there. Sorry. For me, it's probably my favorite event. But uh there's a lot of discussions going on at SBC Summit Rio and one of them is taxation because Brazil, like many countries in the world, have been facing some issues with taxation, some pushes from the government and the Congress to increase taxation. It seems like they are not going through in the end. uh first, actually, let me em Leo, do you want to say something about yourself? I completely missed this opportunity. So people are not asking like where you're based, where you're from. Why don't you talk about yourself a bit? Of course. uh Thank you, Fer, for this. uh So guys, I live in Junjai. It's a small town near São Paulo. Not that small, almost half a million inhabitants, but in the great scheme of things in Brazil, it's a small city. I've got my journalism degree in 2018 and then I mainly worked in the gaming slash e-sports industry but SBC was looking for a new editor for Notícias Brasil and I took that challenge. I wanted a change in life and I'm loving it. Like I'm loving everyone at the company. Everybody has been so nice to me. So only love from Leo Biatti. So make sure you say hello if you see him at SBC Summit Rio. And like we said a lot of things going on, lot of conversations, taxation being at the of the list. So a few days ago, the Chamber of Deputies of Brazil passed a bill that included some good news for the industry because it excluded some taxation, some levies that were introduced previously by the Senate. Why don't we start by breaking down the story, Leo? Okay, so, Fer, it's very important to begin with the PL Antifacção or Antifaction Bill. was to begin with an idea proposed by our federal government, but its text has changed significantly in the Federal Senate, Senado Federal, and the Chamber of Deputies, or as we say, Câmara dos Deputados. Especially in the latter, because it was reported by Deputy Guilherme de Riti, he's from PL, one of the biggest opponents from the government, but yeah, as you were saying, The Chamber of Deputies approved it on February 24th, if I'm not mistaken. The thing is, they approved the project, but they removed the creation of the seed beds, which is a new tax that would tax the sector in 15%. The inclusion of the seed beds was created, was originally proposed by the Federal Senate in December. So, but you might be wondering... what the CDBET is about, it's very easy to explain it, it would tax in 15 % deposit made by bettors. for example, if you deposited 100 reais, you would only have 85 reais to spend on that platform. They wanted to construct new prisons, modernize them, and it would be like a stable source of income to combat the organized crime in Brazil, which is ramping. OK, so um this removal of course has a lot of implications to it, but what does it mean, or what does it tell us about how fragmented Brazil's policy making around gambling still is, OK, first of all, think it's important to say that we have different parties who sometimes don't agree with each other. That's pretty normal everywhere in the world. That's not something different here. but it definitely shows how our approach to gambling is very divided. So even within the same political party, there was no agreement as to what should be done. So like the repertoire, Guilherme de Ritchie saw the tax as a way to just sort of fund crime fighting efforts, just like uh Leo mentioned. It was also put out by members of his own party. So we have to also take care into consideration. So there is not really... There's not really an agreement even within a party. And we also saw that with the government's attempt to increase the taxes that we had last year, to increase the GDR tax. So we had issues even within parties that had agreed beforehand to work alongside with the government to pass the bill. So again, it's not uncommon at all. But the fact that there was no consensus over something so important as funding anti-crime measures says something. Because in the end this is not only about gambling, we're talking about anti-crime. ah So where are the efforts being put? What exactly is the goal? It doesn't seem like there's uh one goal in hand-side and they're running towards that. Those are just too many wishes being pulled into one single thing. and then they're just hoping that it works and it doesn't. It hasn't worked ah in forever. I don't think it makes sense to think that it would work now. I want to add, we'll go back to this later, but we have the government, they want something. The federal Senate is more aligned with the government in some regards and the Chamber of Deputies, are more, even though the president of the Chamber of Deputies say they're not. Pro-betting, they are more pro-betting than the federal Senate, at least in my eyes. Okay, that's good to know, but a lot of the conversation around the tax push, only a year after regulation was enforced, like, does this give stability to the industry? Is this another factor for juridical uncertainty? Is this episode in particular that the city bets was dismissed, is this a win for regulatory stability or is this simply a temporary measure before taxation's return through a different legislative route? Honestly, we've seen it before. uh If they want to have taxes, they will find a way to do it. again, works for every industry, not something we're not being targeted. ah Sort of like, oh, yeah. This has never happened before. I do think that the government, especially this year, they're really looking uh towards bringing more revenue to compensate for other areas that they're decreasing it and all of that. again, it's not a single uh frame. There's a lot involved, but I do think that they can try again if it's going to happen. We cannot say it. We're going to also have to wait and if the government changes because we have the elections this year. So a lot of hashtag waiting to see for a lot of it. Oh, yeah. Just real quick. I wanted to add you may celebrate it like the industry can celebrate it, but don't celebrate for too long. I would say because this will probably change. The city bets will probably go back. in another project, that's the talk that's going on in Brasilia. So while they got away with the PL Antifacção or Antifaction Bill, the city-bets may return on a new or ongoing project. Yeah, there's also the fact that this is being pushed a lot by the retail ah industry and they're pretty huge here. They have a lot of voice, they have a lot of opinions. They're strong boys actually, so I don't think they're gonna let it just... I don't think they're just gonna let it go down too easy to be honest. Yeah, don't sleep on the Switch, right? And... Add the Switch. But Leo mentioned, explained very clearly how the tax would work, that if a player would bet $100, he would get $85 to play with. So... Some lawmakers warned that this aggressive taxation could push activity back into the black market even though Brazil has regulated the industry in order to avoid that. So is that a realistic concern in Brazil's newly regulated environment? I would say so far because even though we have a regulated market, the black market is still as big as it was or even getting bigger because they pay for influencers. people advertise for them. So I understand the concern from the industry. Oh, if you over tax us, you're gonna just push the consumer to the black market and they do not enforce responsible gaming. So there's this uh thing. But on the other hand, I feel that sometimes our industry plays that card way too often. I don't know if you agree with me, Ana, like every time I see something, a new text or someone not talking very positively about gambling, we play that card, oh, but then we are gonna help the black market or the clandestine market, whatever name we wanna give it. do believe the reason people use it so much is because we still have a pretty big ah black market right now, because we can officially say that it's illegal. And because it's so big, any change on the ecosystem of the regulated one leads to only make it bigger. So I do think that the concern moves specifically towards that. So there's a big scare. like people are very afraid of it, of these changes, because it's so early in the market. I don't think we're going to have maybe, I don't know again, if we're going to keep having this. as a background to not change things or to change things in, I don't know, five, six years. Again, hard to tell. I do agree that sometimes it can be used to just rely responsibility on it, but honestly, hard to say exactly what, at least in my opinion. I just wanted to add, since we are talking that the legal market slash clandestine market is still big in Brazil, just so you know. The clandestine market made 14 billion reais in 2025 according to an entity called Apostal Legal that's around for our US or British listeners that's over 2 billion dollars that the clandestine market reportedly made last year. We will continue addressing the Brazilian industry and what this story has brought to the table, but right now we're going to do a very quick ad break live from the SVC Summit Rio event floor and we will be right back with more analysis on this story. And we're back with more gaming daily live from the SVC Summit Rio 2026 event floor and what a better stage to discuss uh the situation going on right now in Brazil. um As from this moment only Leo Biazzi and myself as Ana Maria Menezes had to go out and put out a fire. You know how events go. But of course, Leo President Luis Inacio Lula da Silva, Lula has sharpened his rhetoric against online betting. So how much of this debate is being driven by electoral positioning rather than policy design? So the thing about the election is that Lula, in order for Lula to win, he has to win a lot of votes not only from the left but from the center and especially from the evangelicals or evangelicals as we say in Brazil it's a church the evangelical church PT in the past in its roots was very aligned with the evangelical church like they supported Lula they voted for PT for many years but in the past decade or so they switched they went more to the right-wing parties in Brazil Lula cannot like he cannot defend gambling right now. In order for him to win their vote, he has to speak against it, say that he will do something about gambling. And of course, on top of that, there is the BBB campaign that PT created his party. It's BBB because it's bets, banks and billionaires. Like PT said that it will target try to tax more. banks, bets and billionaires. And even though personally, I've never seen Lula directly cite the BBB campaign, but he's indirectly doing it by sharpening his rhetoric against betting, I would say. So Leo, this means that it's safe to say that the operator should assume that gambling will remain a politically useful target in Brazil's lead up to the next presidential election, right? 100 % for no matter. This will not go away even after the election is concluded because the next government, whether it's the fourth term for Lula or one of his opponents, he has way too many still. They haven't decided on a sole candidate to go against him already, whoever wins will seek more ways to raise the revenue in Brazil to improve our country's economic indicators and whether they, we or... whether we like it or not, betting will always be a fertile ground for that because it provides a stable source of revenue for the government. Yeah, absolutely. think the industry has already proven that in the first year of operations, let alone the years before that, where it was already starting to establish itself ever since President Temer passed the first kind of liberalized. what they could do, but with regulation in place from last year, it definitely could go a lot more. But we've also talked about Brazil as a strategic growth market. whole global industry has been looking into Brazil for ages, especially now that the regulation is finally in place. Do these movements around the betting industry keep... uh steer the focus away from Brazil or have people looking through their side eyes, giving the side eye to Brazil as it may demand a higher risk or is it still that strategic growth market for the global gaming industry? So my opinion is still a hundred percent strategic place for companies but I would say also that it depends because we So many companies entered our market. It's over 80, almost 100 that have licenses to operate in Brazil right now. A lot of them went really aggressive to join the market and to try to become the leading operators here in Brazil, while others, they tried to build their product and then started advertising more in these past few months after they got their license. So... So if a company invested a lot, they might be a bit scared about everything that's going on. But to be fair, this is to be expected at some extent because even though betting has been around in Brazil in many forms over the past century or so, this specific thing betting online with your phone is very new to us. And it was to be expected that we will mature our thoughts about it. and then see what we can do, what measures can we take. But I think that the operators are fine. Most of them saw this coming and they advocate too for responsible gaming. And of course this is a developing story because even though the CG beds was dismissed or was taken out of the build that was passed by the Chamber of Deputies, there is still a lot to come. in an election year for Brazil. So, hashtag wait and see what happens with Brazil. Make sure you are subscribed to SBC News' Brasil's newsletter to keep up to date with the stories that come out of the country, not only this one, but all... related to the gaming industry because, for example, LAN-based casinos have been on the table for some time, even though with the elections, I guess they'll be put aside for a while. Maybe they will pick that debate up in the next months. But I wouldn't hold my breath on that. And also make sure you follow iGamingDaily on all your preferred podcasting platforms and on TikTok as well. So you can watch the lovely snippets are produced by the name of Donald. posts online. thank you very much Leonardo Biazzi. Thank you Ania McDonald for producing this episode and thanks Ana Maria Menezes who had to run to put out a fire. I'm Fernando Nott and to our listeners out there, we'll see you in the next one.