Brazil: Banks May be Liable for Taxes on Illegal Betting

Brazil.– September 3, 2025 – www.zonadeazar.com A legislative proposal in Brazil suggests that banks and fintechs could be held jointly responsible for tax payments owed by unauthorized betting operators.

Overview

Brazil’s Congress is debating new measures to combat illegal betting operations. One of the most discussed proposals would make financial institutions that process payments for unlicensed operators liable for unpaid taxes.

Details / context

Illegal betting continues to drain potential tax revenue while creating unfair competition against regulated operators. Under the proposal, banks and fintechs enabling transactions for unlicensed companies could be forced to cover the taxes those operators evade.

Economic impact

If adopted, the measure would strengthen tax collection and send a clear message: facilitating transactions with illegal operators will have financial consequences. It would also increase pressure on international operators to obtain proper licenses in Brazil.

Impact on the financial sector

For banks and fintechs, this regulation would mean stronger monitoring obligations and compliance costs. Financial institutions would need to enhance systems to detect transactions linked to unlicensed betting, adding operational burdens.

Political and regulatory debate

The proposal is controversial. Supporters argue it is a strong tool against tax evasion, while critics warn it unfairly shifts responsibility from operators to the financial system.

Future outlook

If approved, Brazil would set a regional precedent by making financial institutions liable for tax obligations in the betting industry. This could reshape the payments ecosystem and encourage greater market formalization.

Zona de Azar notes that this debate reflects the intersection of regulation, taxation, and finance in shaping Brazil’s iGaming future.

Editó: @_fonta www.zonadeazar.com