Chamber of Deputies of Brazil has approved the Public Security Amendment (PEC 18/25) in a second round of voting. This paves the way for a portion of gambling revenue to be directed toward strengthening national security programs.
The proposal passed with 461 votes in favor and 14 against. It will now move to the Federal Senate of Brazil for further consideration. Instead of raising taxes on betting operators, the amendment redistributes existing gambling revenue to public security funds.
Betting Revenue to Support Security Funds
Under the approved text, revenue collected from betting will be partially allocated to the National Public Security Fund (FNSP). Also, some will go to the National Penitentiary Fund (Funpen).
The allocation will increase gradually between 2026 and 2028:
- 10% of betting revenue in 2026
- 20% in 2027
- 30% in 2028 and beyond
Before calculating these allocations, the total betting revenue will first be reduced by player prize payouts. Then, income tax on winnings and operators’ gross profit will be subtracted.
Importantly, the measure does not introduce new taxes for betting operators, but rather redistributes funds currently allocated to other institutions.
Changes Introduced by the Rapporteur
The final text is a substitute version proposed by rapporteur Mendonça Filho, who modified the government’s original proposal. One notable change was removing a planned 6% tax increase on betting companies, which had been included in earlier drafts.
Meanwhile, Hugo Motta described the approval as a “historic day”, stating that the amendment reflects a political consensus aimed at making Brazil safer.
Separate from Anti-Crime Legislation
The amendment should not be confused with Brazil’s anti-faction bill. That bill focuses on combating organized crime by increasing penalties for crimes committed by gangs and militias.
Although both measures form part of a broader national security strategy, they address different areas of policy. The anti-faction legislation was introduced following a large-scale police raid in Rio de Janeiro targeting organized crime networks.
