Sportsbooks and industry and trade representatives are vying for space behind the scenes in the National Congress over betting taxation. The clash comes shortly before the selective tax, known as the “sin tax,” is set to go into effect, levied on companies in the sector.
Business owners are pressuring the government to introduce a surcharge as early as 2026 to discourage gambling.
Proposal to create Cide-Bets
The proposal creates the Economic Domain Intervention Contribution (Cide-Bets), with a 15% rate on deposits made on the platforms. The idea garnered support from several lawmakers and was even included in amendments to Provisional Measure (MP) 1,303/2025.
The text, published by the Federal Government in July, increases taxation on companies‘ gross revenue, from 12% to 18%.
According to businesspeople, billions of reais are being diverted from the Brazilian economy due to online gambling. The Central Bank estimates monthly transactions in the sector amount to between R$20 billion and R$30 billion.
Furthermore, the National Confederation of Commerce (CNC) reported in January that commerce lost R$103 billion in revenue in 2024 due to betting. However, the betting industry rejected both studies.
Lobbying and political articulation
The business lobby is operating on two fronts. On the one hand, it’s trying to include Cide-Bets in Provisional Measure 1.303, and on the other, it’s trying to convince former Speaker of the Chamber of Deputies Arthur Lira (PP-AL) to include the proposal in a bill that expands income tax exemptions for those earning up to R$5,000.
Last week, Lira attended a lunch with businesspeople, representatives of associations, and parliamentary groups. The congressman listened to their demands but did not decide on the proposal. He highlighted his concern about the activities of illegal companies.
Arthur Lira stated: “If only this half paid tax or there was some rigor in these payment methods to curb these irregularities, you would already double the revenue (from this sector).”
The parliamentarian highlighted that more than 50% of betting sites in Brazil operate illegally and do not collect taxes, an issue being discussed with the Central Bank and the Treasury.
Ministry of Treasury’s position on illegal betting
For Treasury Minister Fernando Haddad, the presence of illegal betting does not eliminate the need to increase fees charged on regulated betting. During a hearing of the joint committee analyzing Provisional Measure 1.303, he defended the measure.
Fernando Haddad stated: “You know that the so-called bets went four years without paying taxes — four years: 2019, 2020, 2021, 2022, without paying taxes. We forwarded it, therefore — because, if a bakery, a pharmacy, a butcher pays, it doesn’t make sense for a bet not to pay.”
He added: “In our understanding, the treatment has to be consistent with the same treatment that is done with cigarettes, the same treatment that is done with alcoholic beverages; that is, the whole world knows that some activities must be regulated, even to combat crime, because, when you keep something irregular, you give space to illicit activities, you have to regulate, but you have to regulate in a way that inhibits people from consuming, whether for entertainment or anything else, above levels considered harmful to public health.
And gambling, in my opinion and in the opinion of several experts, is a public health problem that must be treated as such.”
Reaction of industry and commerce
Mário Sérgio Telles, Director of Economics at the National Confederation of Industry (CNI), criticized the increase from 12% to 18%, arguing that the change does not benefit the manufacturing sector. He supported the creation of the Cide-Bets program.
According to Telles: “Our proposal is to levy a tax on the deposit, on the price of the service, with a deduction on the amount wagered. Currently, bettors don’t notice the effect of this 12% levy.”
He clarified that the industry is not against betting houses, but fears the economic impacts of their expansion. “Obviously, when you have an economic activity that is draining more and more resources, this reduces the availability of resources for other economic activities.
Now, economic activity, once regulated, is legitimate. We’re not against it; the point is that we need to discourage the consumption of this type of service.”
Betting industry reaction
Cide-Bets‘ proposal has raised alarm in the sector, and for Fernando Vieira, president of the Brazilian Institute of Responsible Gaming (IBJR), which represents 75% of the regulated market in the country, the measure could harm legal companies.
Vieira stated: “You won’t be able to solve the revenue problem by strangling the regulated betting sector. This will only affect the regulated sector. Illegal betting will become more profitable.”
He further emphasized: “The game will not stop, what will happen is an even greater migration of people who are playing within the regulated environment to informality, the illegal market.
Where a Wild West takes place, there are no consumer protection rules, there is no facial recognition to determine whether the bettor is of legal age, and the resources go to fuel crime and fraud.”
Measures against the illegal betting market
The sector maintains dialogue with the Central Bank and the Treasury’s Prize and Betting Secretariat, filing complaints against irregular companies. Fernando Vieira explained: “We have been in frequent dialogue with the Central Bank and the Prize and Betting Secretariat (of the Ministry of Treasury). We have already received over a thousand complaints about illegal companies and payment companies that process transactions for illegal companies.”
Finally, despite efforts, illegal websites are difficult to track and permanently block. Therefore, to address this problem, the IBJR is preparing an advertising campaign that will alert consumers to the risks of betting on illegal platforms, highlighting the dangers of creating accounts and transferring funds to unregulated companies.
