Brazil fiscal institute includes betting revenue loss in R$40bn budget estimate
Regulation3 min read
In brief
Brazil's Independent Fiscal Institution (IFI), which is linked to the Senate, published its 117th Fiscal Monitoring Report on 29 October, listing the prohibition of fixed-odds betting among the campaign decisions that weigh on the 2027 Budget. According to the report, the Bolsa Família adjustment, the loss of betting revenue and the MEI package together represent BRL40bn in additional unbudgeted imbalance. The document did not state how much of that amount relates to betting.
The IFI projects a primary deficit of 0.5% of GDP in 2026 and allows for a potential effective primary deficit of 1.0% of GDP in 2027. The report does not specify whether its calculation includes the contribution passed to the legal beneficiaries of Law 14,790/2023 or only federal taxes, and it leaves out municipal ISS and income tax on prizes.
A projection attributed to BNLData, using official data obtained under access-to-information rules and the IFI's own assumptions, put the foregone betting revenue for 2027 at between BRL15.8bn and BRL17.6bn. The projection used BRL9.95bn in federal taxes paid by operators in 2025 (IRPJ, CSLL, PIS/Cofins and social security contribution) and an average of BRL413.5m per month, or BRL4.96bn per year, passed to the legal beneficiaries of Law 14,790/2023 over the previous 12 months.
The projection applied the IFI's assumption of 6.3% nominal GDP growth, with GDP rising from BRL13,667.1bn in 2026 to BRL14,533.4bn in 2027, and the 14% rate on GGR scheduled for 2027. It used two scenarios: a conservative one with 2025 and trailing-12-month revenue frozen and only the 14% rate applied, and a projected one with 2026 GGR annualised and corrected by the IFI's nominal GDP, with taxes following GGR.
At BRL17.6bn, the betting-related loss would equal 0.12% of 2027 GDP, about 12% of the potential deficit estimated by the IFI. For October to December 2026, the estimated loss is about BRL3.9bn. The projection also cites GGR of BRL36.9bn in 2025 and BRL20.07bn in the first half of 2026 alone, which annualises to BRL40.1bn, an increase of 8.8%.
For the combined loss from betting and MEIs, the estimate circulating in the economic team is about BRL6bn, according to the projection, which states that the betting figure alone is 2.9 times that value. The projection also sets out a comparison with the IFI: if the institution used the government's figures of BRL22.7bn for the 15% Bolsa Família adjustment and BRL1.57bn for the MEI forgiveness in 2027, about BRL15.7bn would remain for betting within the BRL40bn.
The projection states that the rate rises to 15% in 2028 and that, by the end of the concessions in December 2029, it had estimated a cumulative loss of between BRL48.4bn and BRL50.3bn. It also states that the IFI advocates a fiscal adjustment equivalent to about 3 percentage points of GDP, and that the illegal market accounted for more than 40% of activity before the provisional measure.