Brazil Firmly Establishes SINAPO Framework Amidst Intensifying Tax Disputes

The Brazilian Ministry of Finance is moving closer to launching the National Betting System (SINAPO), a unified platform for coordinating betting oversight between federal and state governments. The system, which aims to regulate and control the gambling sector, is part of a broader fiscal plan aimed at achieving a 0.25% primary surplus in 2026.

One of the most debated provisions in the plan is the proposed increase in the tax on online betting from 12% to 18%. The tax hike is aimed at curbing "consumption at levels considered harmful to public health." However, the increase has sparked discussions that highlight an ongoing balancing act between economic goals, market stability, and responsible gambling policy.

Lawmakers are weighing public health concerns against the potential for driving players toward unlicensed sites. Some argue that the increase is necessary to control betting activity and protect vulnerable players, while others contend that higher taxes could hurt the competitiveness of Brazil's regulated gambling sector.

SINAPO will have two membership levels: Adherent and Associate. Adherent members are states or districts still building their lottery operations, while Associate members are jurisdictions with established lotteries or advanced regulatory systems. The distinction shows a clear operational and developmental difference between the two types of members, where associate members are further along in maturity and integration than adherent members.

If approved, operators in associate membership will be placed on a unified list of authorized operators and will have access to a national self-exclusion program and permission to use the ".bet.br" domain. Associate members will face stricter requirements, including anti-money laundering safeguards, responsible gambling measures, and respect for territorial licensing limits.

The drafts of necessary regulations for SINAPO are being sent to the Attorney General's Office for review. Provisional Measure (MP) 1.303/2025, which proposes the tax increase, has been defended by the Finance Minister, Fernando Haddad. The package includes significant changes to Brazil's financial tax structure, such as unifying the income tax on investment earnings at 17.5% and ending exemptions on certain incentivized bonds.

The final working group meeting to outline the framework for SINAPO has been concluded. The discussions surrounding the tax increase and the broader SINAPO plan underscore the complexities and challenges involved in regulating the gambling sector while balancing public health, economic, and market stability concerns.