Brazil Finance Minister makes Bets the ‘Budget Scapegoat’

“Congress should reconsider gambling” says Brazil Finance Minister

Fernando Haddad turns back on Bets regime, but is the Finance Minister simply playing politics on his divisive Budget plans reports? SBC Noticias Brasil’s Ana Maria Menezes breaks down the news.

___________

“If it were up to me, I’d hit the stop button. No amount of tax revenue justifies the mess we’ve landed in” – a statement expressed plainly by Brazil’s Finance Minister, Fernando Haddad, on the launch and progress of the Bets regime.

The comments have riled sensitivities among Bets stakeholders, as Haddad is recognised as a principal architect of the nascent gambling regime, whose laws, frameworks, and policies have been under constant scrutiny and change since its federal application on 1 January.

Yet, speaking to economist Eduardo Moreira, Haddad presented himself as a reluctant steward of Bets and its mandate to transform Brazil from a grey to a regulated marketplace. Haddad recounted: “There were over R$40bn in subsidies that went entirely abroad — to buy crypto, buy dollars, fintechs — they sent it all out of the country. That money disappeared from Brazil.”

Though the PT government concluded a decade-long mandate to launch a legislative framework for online gambling activities, Haddad remains incensed by the outcomes — “Today I know, it’s a disgrace. What’s happening is a disgrace.”

Turning his back on Bets, the minister stated that “gambling should be treated as a public health issue and apply advertising restrictions similar to those on alcohol and tobacco.”

His remarks come at a highly sensitive moment for the Bets regime. A joint Senate and Congressional committee is currently reviewing proposals to raise gross gaming revenue (GGR) taxes on online operators from 12% to 18%.

Bets…an easy scapegoat?

The tax hike was recommended by Haddad, who is under pressure after being blocked from applying increases to Brazil’s IOF financial services tax and facing broader resistance from ministers to fiscal reforms linked to the National Budget.

Haddad is accused of using the betting sector as a scapegoat to offset his unpopular tax initiatives. Critics argue that the Finance Minister is now weaponising the regime he helped establish — a subject that featured prominently in his interview with ICL Notícias.

As Congress heads into recess, many view Haddad’s remarks as an attempt to dominate the political spotlight and rally support for his broader tax agenda. However, the Finance Minister’s proposals have caused internal friction, not just with the opposition but within PT ranks.

Central to his plan is a minimum tax of 10% on Brazilians earning over R$1m annually — a demographic currently paying, on average, just 2.5% in income tax. The government argues the reform would generate R$30bn, enough to exempt around 10 million low-income citizens and reduce rates for another five million.

Critics question the political viability of such a move and whether it constitutes a fair and balanced approach to fiscal reform. Opposition figures accuse Haddad of favouring headline-grabbing populism over substantive measures to improve investment in Brazil.

Haddad, for his part, remains defiant. “I’m someone who’s fighting for social justice in a way we haven’t seen in Brazil for a long time,” he said. “You can say it’s not enough, say I’ve been weak — whatever — but don’t question my intentions. I have training, and I have principles.”

Call me maybe?

Further criticism was laid at the Finance Minister for ignoring a request to meet industry leaders and discuss tax policy, led by the National Association of Games and Lotteries (ANJL).

In the letter sent to Haddad, six industry associations expressed “serious concerns” over raising the tax rate from 12% to 18%. The request was signed by the Brazilian Association of Games and Lotteries (AbraJogo), the Association of Bets and Fantasy Sports (ABFS), the International Gaming Association (AIGaming), the Brazilian Institute for Responsible Gaming (IBJR), and the Legal Gaming Institute (IJL).

The letter warned that the tax hike “could have severely adverse consequences, potentially strangling legal operations and paradoxically strengthening the illegal market that operates outside the law and regulatory oversight.”

These groups have sensed growing distance from Haddad, who has remained firm in supporting the increase. Speaking again last month, the minister doubled down on his position: “They don’t create jobs. Personally, I don’t like gambling. It’s something Congress should reconsider altogether.”

The negative comments contradict the Secretariat of Prizes and Betting (SPA), which this month reported that Bets activities had raised direct tax revenues of R$3bn (approximately €520m). The figure was branded a “sign of confidence” by SPA President Regis Dudena, reflecting Brazil’s transition to a regulated online gambling market.

He concluded with a message to Brazil’s elite: “This is not some extractive colony where people take everything, move abroad, send their families and fortunes away, and never look back. This is a viable nation — and they need to understand that.”