According to the manifesto, CIDE-Bets is presented as a measure of “tax justice” and “social protection,” but in practice represents a counterproductive levy. The document highlights that excessive taxation may encourage bettors to migrate to the illegal market, which is used by criminal organizations for money laundering and other offenses.
Currently, Brazil’s online betting sector is taxed under the Gross Gaming Revenue (GGR) model, which considers the difference between operators’ gross revenue and the prizes paid to bettors. The tax burden already represents around 26% of gross revenue and could reach up to 45% after the tax reform under discussion. In addition, companies in the sector already pay high licensing and oversight fees to the federal government.
The manifesto draws attention to the difference between CIDE-Bets and the existing taxes: while GGR applies to company revenue, the new contribution would fall directly on the amount wagered by the user. This would immediately increase consumer costs, making regulated platforms less attractive and fostering the growth of clandestine operators. “If a 15% CIDE-Bets is approved, a R$100 bet would result in a R$15 debit at the moment of betting, pushing bettors toward the illegal market,” the text explains.
The Parliamentary Front emphasizes that international experience shows the risks of this model. In Colombia, taxation on deposits led to a drop of more than 30% in state revenue and an exponential increase in the illegal market. In the Netherlands, tax increases also resulted in greater migration toward illegal operators, reducing state revenue.
For lawmakers, approving CIDE-Bets would not only facilitate the financing of organized crime but also reduce the funds allocated to sports, health, tourism, social security, and public safety.
According to the manifesto, “the only winner with CIDE-Bets is the illegal market, and the loser is Brazil: the consumer loses, the State loses, formalized companies lose, and society loses.”
Given this scenario, the Parliamentary Front for the Free Market urges the National Congress to reconsider the proposal, defending a rational tax environment that strengthens the regulated market, preserves fair competition, protects consumers, and combats the illegal market intelligently.
Source: GMB
