The proposal to create a new tax on betting has jeopardized the multi-million dollar contracts between betting companies and football clubs.
The controversy revolves around the 15% Contribution for Intervention in the Economic Domain (Cide) on user deposits, included by Senator Alessandro Vieira in the bill known as the Anti-Faction Bill.
According to industry representatives, most sponsorship contracts contain “escape clauses”.
These rules allow for the termination of the agreement in cases of extreme regulatory changes, such as a ban on the business or, in this case, a tax increase that makes the operation financially unviable.
In this way, the commercial relationship that currently sustains a large part of national football would have difficulty being maintained, needing to undergo renegotiations or even the immediate termination of historical partnerships.
The risk of the illegal market
André Gelfi, director of the Brazilian Institute for Responsible Gaming (IBJR), argues that taxing customer deposits is a gift to the illegal gambling market.
“It’s a measure that tends to strengthen the illegal market, as it gives clandestine platforms an unprecedented competitive advantage,” he explains.
The logic is simple: if a bettor deposits R$100 in a legal betting site, they will only have R$85 to play with. On an illegal site, the R$100 remains worth R$100.
Today, it is estimated that more than half of the market already operates without a license, and this rate could worsen the situation.
What will be the next steps?
The text approved in the Senate stipulates that the revenue, estimated at up to R$ 30 billion, will go to Public Security.
Therefore, resources should be allocated to combating organized crime and expanding the prison system.
Since there were changes, the bill returns to the Chamber of Representatives.
The betting industry hopes to reverse the measure in Congress, but warns that if the tax passes, the fight is likely to end up in court, as companies consider the charge unconstitutional.
