Getty Images
Getty Images
The Economic Intervention Contribution on betting (CIDE-Bets) will be calculated using the “tax-inclusive” model, meaning the rate will apply to the total amount transferred by the bettor, already including the amount of the contribution itself. The collection will be made through withholding at the source, carried out directly by financial institutions at the moment the funds are transferred.
According to Senator Alessandro Vieira, the idea is for the project to finance the fight against organized crime. CIDE-Bets has the potential to generate R$30 billion (US$5.65bn) annually, according to data from the Central Bank. The entire amount will be directed to the National Public Security Fund (FNSP), with the only exception being the deduction of collection costs.
The tax increase approved last Tuesday (2) will only be fully implemented in 2028. Before that, a transition phase will take place between 2026 and 2027, raising the rate from 12% to 15%. Originally, rapporteur Eduardo Braga (MDB-AM) had proposed doubling the current tax burden on betting operators from 12% to 24%, but he backed down in a report presented last November 26.
Representatives of the sports betting sector comment on the legal uncertainty caused by the Brazilian government for increasing taxes on betting less than a year after the sector’s regulation came into effect — and for proposing another tax hike within less than 24 hours of the Senate’s approval.
Bernardo Cavalcanti Freire, legal advisor to the National Association of Games and Lotteries (ANJL) and partner at Betlaw, a law firm specializing in betting, warns of the risks of further tax increases for the sports betting industry.
“Earlier this week, the Senate already approved a tax increase for the segment. It is unreasonable that less than a day after this decision by the Economic Affairs Committee, there is a proposal for yet another tax on the sector. These measures harm the legal market, which pays taxes, generates jobs, and invests in national sports, and they benefit the illegal market, which brings numerous harms to the country,” Bernardo says.
According to a survey conducted in mid-June by the Locomotiva Institute, 61% of bettors this year used non-licensed platforms. The study also found that people from lower-income and less-educated backgrounds are the most affected by illegality.
“The proposal for CIDE-Bets is the most favorable to the clandestine betting market ever introduced in Congress. It shockingly reveals a lack of understanding of the sector’s reality by some lawmakers, since no country has successfully implemented such a measure. Colombia, for example, saw a 50% drop in deposits after adopting something similar. The reason is simple: whenever consumers perceive a tax on the amount they deposit to play, they automatically migrate to illegal operators,” Bernardo adds.
Illegality still dominates a significant portion of Brazil’s betting market, posing an increasing risk to the state and consumers. According to a study by LCA Consultores, between 41% and 51% of the national market operate illegally. This scenario resulted in an estimated loss of R$1.8 billion (US$340m) to R$2.7 billion (US$508m) in tax revenue in just the second quarter of 2025.
For Alex Rose, CEO of InPlaySoft, an international technology company focused on the sports betting sector, high taxation on betting encourages illegal operators.
“The significant tax increase approved by the Senate may harm the regulated sector and boost the illegal market. It is important for the government to reassess this decision carefully, considering the segment’s role in job creation, sports investment, and its contribution to the national economy.”
The LCA Consultores study highlights not only the economic impact but also the significant vulnerability of bettors: 78% report difficulty differentiating legal from illegal betting sites, and nearly half have already made deposits on fraudulent platforms. According to government-licensed betting companies, it is crucial that illegal operations be shut down in the country.
“Combating illegal operations is essential for consolidating a regulated and trustworthy market in Brazil. Blocking clandestine websites is an important step in protecting consumers, preventing money laundering, and supporting companies that comply with the rules. This measure strengthens the credibility of the sector and demonstrates Brazil’s commitment to a more transparent and responsible betting industry,” says Nickolas Ribeiro, Partner and Founder of Ana Gaming Group, the parent company of the brands 7k, Cassino, and Vera.
Source: GMB
