Tax liability for banks or companies assisting or promoting illegal betting in Brazil has been detailed in Ordinance 1,766, published this week.
An administrative order published on Thursday established that entities facilitating financial transactions for illegal betting would be liable for taxes and should block such transactions within 24 hours of receiving notification from the ministry.
Through Ministry of Finance Ordinance No. 1,766, the department has established the liability of financial and payment institutions for the payment of taxes owed by illegal online betting and gaming companies. The goal is to curb clandestine activities and, with this measure, the government has sought to stifle unlicensed operations. The joint and several liability of financial institutions takes effect immediately.
The ordinance regulates tax liability related to the unauthorised operation of fixed-odds betting, as provided for in Article 6 of Complementary Law No. 224/2025. Banks, financial institutions and payment institutions are now liable for taxes owed by operators without a federal licence. They will be held liable following formal notification by the Ministry of Finance.
Advertising and publicity
In the ordinance, the ministry also imposes joint and several liability on individuals or legal entities that publish advertisements or promotional material for illegal betting operations. For these entities, no prior notice will be required, and they will be held liable for publishing unlicensed betting websites.
The Secretariat of Lotteries and Betting (SPA) and the Federal Revenue Service will be responsible for notifying financial and payment institutions. These institutions will have 24 hours to restrict transactions; if they fail to comply, they will be held liable for the payment of the taxes due.
Details of the ordinance
The formal and specific notice regarding the joint and several liability of financial and payment institutions:
I – shall be carried out by means of a joint notice issued by the SPA and the Special Secretariat of the Federal Revenue Service of Brazil, both under the Ministry of Finance, which shall set a 24-hour deadline for the adoption of restrictive measures to prevent new transactions intended to facilitate, directly or indirectly, the illegal operation of fixed-odds betting; and
II – shall identify the legal entity found to be engaging in the unlawful operation of fixed-odds betting, specifying the following information:
a) business name and registration number in the National Register of Legal Entities (CNPJ);
b) the financial transaction identified as having been made in favour of the non-compliant operator;
c) the financial or payment institution holding the account owned by the non-compliant operator that is the recipient of the funds; and
d) when available, other information capable of identifying the designated person and enabling the implementation of the measures set forth in this ordinance.
Tax liability will be formalised through administrative tax proceedings, ensuring the right to a fair hearing and a full defense.
The ordinance regulates the joint and several liability of third parties for taxes on betting operations and for the payment of net winnings to bettors.
