Revenue from gambling to be diverted to strengthen public security in Brazil
Revenue from gambling to be diverted to strengthen public security in Brazil
The Chamber of Deputies approved, in a second round of voting, the Public Security Amendment (PEC 18/25), which aims to improve the integration of security agencies and guarantee more resources for the sector. Approved with 461 votes to 14, the proposal will be sent to the Senate. The bill diverts revenue from betting in Brazil to other funds rather than raising taxes on the sector.
The approved text is a substitute proposed by the rapporteur, Representative Mendonça Filho, who made several changes to the original version of the proposal submitted by the government to Congress.
The Speaker of the House, Hugo Motta stated that the approval of the PEC (Proposed Constitutional Amendment) signifies a historic day and was the result of dialogue and balance, “converging on the desire to have a safer country for all Brazilians.”
According to the Chamber of Deputies News Agency, when it comes to the tax on betting the approved text provides for the allocation of money raised from betting to the National Public Security Fund (FNSP) and the National Penitentiary Fund (Funpen).
Gradually, 10% of the funds raised from these bets will be allocated to these funds between 2026 and 2028, until reaching a total of 30%, with that amount remaining the same after that.
However, before calculating this reserve, the total amount collected must be reduced by the prize money, the income tax on those prizes, and the gross profit of the operators.
This does not raise taxes on operators; instead, it cuts by 30% the portion allocated to other institutions—including the FNSP—already included in the current distribution, which also impacts social security and the Ministries of Sport and Tourism.
In relation to the previous version of the PEC presented to the special committee, Mendonça Filho abandoned the proposal to increase taxation on these betting houses by 6%.
The constitutional amendment is not to be confused with Brazil‘s anti faction bill which is aimed at combating organized crime, increases penalties for crimes committed by criminal gangs or militias. However, it is part of the same new overall policy towards crime.
The Chamber of Deputies completed voting on the anti-faction bill, at the end of last month. New taxes on gambling were also proposed in this bill but were ultimately removed from the text by a Partido Progressista (Progressive Party) amendment.
The anti-faction bill was put forward after a massive police raid aimed at organized crime in Rio de Janeiro. One hundred and twenty one people, among them four police officers, were killed in the raid.
