Brazil sets 0.5% Excise Tax on lotteries, fantasy sports, and fixed-odds betting from February 2027

Brazil’s Provisional Measure 1.399 sets a 0.5% rate for the Imposto Seletivo (Selective Tax) on all “concurso de prognósticos” products under the tax reform, including fixed-odds betting, should those bets return through an STF ruling or when Provisional Measure 1.394 expires. For PSPs and operators, the point is simple: this is not a standalone tax layer, but another piece of the post-reform stack on top of 14% of GGR and the launch of CBS.

1. The government published Provisional Measure 1.399/2026 in an extra edition of the Diário Oficial da União on Wednesday, 4, and Article 7 sets the Selective Tax at 0.5% for concurso de prognósticos. The measure covers the tax year 2027.
2. Because of the 90-day waiting period, the measure only takes effect on 2 February 2027, under Article 19. It is also explicitly transitional: by 31 May 2027, the executive must send Congress a bill with the final rates that will apply from 1 January 2028, under Article 15.
3. The text does not name lotteries, bets, or fantasy sports individually. Instead, it refers to Article 244 of Complementary Law 214/2025, which covers all lottery products, fixed-odds betting, sweepstakes, horse-race betting, and other betting activities, whether physical or online. The same article’s sole paragraph extends the regime to fantasy sports.
4. The government’s own examples in the announcement were Mega-Sena, Lotofácil, and Loteca. But the legal reference to Article 244 means fixed-odds betting remains within the tax base, even though Provisional Measure 1.394/2026 currently prohibits those bets. The constitution bars provisional measures on matters reserved for complementary law, so the tax framework and the prohibition are separate issues.
5. The tax does not apply to the amount wagered. Under Article 414, item V, of LC 214, the base is the operator’s own revenue, calculated under Article 245 as gross receipts minus prizes paid and mandatory allocations to public bodies, funds, and other beneficiaries. The reform also makes the Selective Tax part of the IBS and CBS base in this segment, which means CBS will apply to revenue already increased by the Selective Tax.

For Brazilian lotteries, the base is narrow. Caixa runs the federal lottery operation, while states run lotteries directly or through concessions. In both cases, once prizes and statutory transfers are deducted, the taxable slice is only what remains with the operator to cover operating costs.