Brazil Will Fund a New Security Ministry With 30% of Betting Tax

Lula confirmed on national television that he intends to split the Justice ministry once the Senate passes PEC 18/2025. The amendment routes 30% of betting revenue to the police and prison funds, in the same month a bill was filed to abolish the market.

• President Luiz Inácio Lula da Silva confirmed in an interview broadcast on TV Globo's Jornal Nacional that he intends to split the existing Justice portfolio and create a Ministry of Public Security as soon as the Senate approves PEC 18/2025
• The constitutional amendment, already passed by the Chamber of Deputies and awaiting final Senate consideration, directs 30% of everything collected from the betting lottery, in both physical and digital form, to the Fundo Nacional de Segurança Pública and the Fundo Penitenciário Nacional
• Lula said he had spoken personally to Senate president Davi Alcolumbre and Chamber president Hugo Motta to accelerate the vote; he did not detail the financing during the interview
• Licensed Brazilian betting and gaming firms paid R$8.7 billion in tax between January and July 2026 according to the Receita Federal, up 76.86% on the same period of 2025, with the rate rising from 12% toward 15% by 2028 under Complementary Law 224/2025
• It lands in the same month a deputy filed a bill to extinguish every betting authorisation within 180 days

The State Is Building Institutions on Money Part of Congress Wants to Abolish

Brazil has spent 2026 arguing about whether its regulated betting market should exist. The federal government has spent the same year discovering how much it raises. Those two processes are now colliding inside the same legislature.

PEC 18/2025 is the vehicle. It has cleared the Chamber of Deputies and awaits the Senate, and it does two things at once: it redraws the constitutional division of responsibility between mayors, governors and the union in tackling organised crime, and it hypothecates 30% of betting lottery revenue to the national public security fund and the national penitentiary fund. Lula told Jornal Nacional he will split the Justice ministry and stand up a dedicated Ministry of Public Security as soon as that passes, and that he has lobbied both chamber presidents directly to speed the vote.

The sums involved are no longer marginal. Receita Federal figures put tax paid by licensed operators at R$8.7 billion for January to July 2026, an increase of nearly 77% year on year, and the headline rate is on a legislated path from 12% to 15% by 2028. Betting money has already been earmarked elsewhere: a measure approved by the Senate directs 3% to a federal police fund, and a separate bill would send 10% to the national secretariat for the rights of persons with disabilities.

Against that, PL 5153/2026 would extinguish every authorisation 180 days after publication and repeal the law that created the market. São Paulo governor Tarcísio de Freitas has called for an end to betting, and the advertising rules have been tightened repeatedly, most recently with mandatory loss warnings.

Hypothecation Is the Strongest Protection the Industry Has Ever Been Given

Earmarking a tax to a named fund is usually criticised as poor fiscal practice, because it ties spending to a revenue line that moves for unrelated reasons. Here it does something else. Routing 30% of betting revenue into police and prison funding, and building a ministry whose operating capacity depends on it, converts an unpopular industry into the financing mechanism for a popular one. Abolition then stops being a moral question and becomes a budget question, and the deputy proposing it has to explain which police forces lose funding. That is a far more durable shield than any lobbying campaign the sector could run for itself, and the sector did not ask for it. The industry's political weakness in Brazil has always been that nobody defends it; the amendment quietly recruits the interior ministry and every state security secretariat to do so.

A Constitutional Amendment Is Much Harder to Unwind Than a Statute

The two instruments are not equivalent in force. PL 5153/2026 is an ordinary bill that would repeal Law 14.790. PEC 18/2025 is a constitutional amendment, requiring supermajorities in both houses across two rounds, and once passed it embeds the revenue link in the constitution itself. If the amendment completes its passage before any abolition bill advances, the practical position is that the constitution assumes a betting lottery exists and assigns a share of its proceeds. A subsequent statute abolishing the activity would not be unconstitutional as such, but it would strand a constitutional funding commitment, which is precisely the sort of collision that invites litigation and legislative paralysis. Sequencing may end up mattering more than either vote.

The Fiscal Case Is Getting Stronger While the Political Case Gets Worse

Nearly 77% growth in tax paid, in a year when advertising was restricted, loss warnings were mandated and welfare recipients were barred from betting, is an awkward number for both sides. The industry can point to it as proof that a regulated market delivers, and opponents can point to the same figure as evidence of how much is being wagered. What it settles is the fiscal question. A market producing R$8.7 billion in seven months and rising toward a 15% rate is now large enough that the treasury has planned around it, and states have begun to as well.

Brazil is legislating in two directions at once. The constitutional route is the one that will be harder to reverse.