Brazil's gambling industry has received a brief respite. A highly controversial bill that would have imposed a 15% tax rate on player deposits has been officially postponed until 2026. This tax proposal, named CIDE-Bets, aimed to inject about 30 billion reais (approximately 5.5 billion USD) in annual revenue into Brazil's National Public Security Fund, but it raised significant concerns among legal operators about the viability of the market.
Vote Postponement: A Temporary Respite Amid Political Maneuvering
This Monday, the Brazilian government and the opposition jointly decided to postpone the vote on the "anti-faction bill" (PL 5,582/2025), which includes the CIDE-Bets tax, until next year. Although the bill had initially passed in the Senate plenary last week, Workers' Party leader Lindbergh Farias stated, "This is a controversial topic that requires more debate." This has temporarily spared the gambling industry from facing a potentially market-altering tax reform in the short term. For more updates on global regulatory dynamics, follow PASA's official website.
15% Deposit Tax: Why Is It Deemed "Mathematically Impossible"?
The plan to directly tax deposits at 15% has been fiercely criticized by the Brazilian Institute for Responsible Gaming (IBJR). The IBJR warned that this gives illegal operators the biggest competitive advantage ever seen in the market. The logic is simple: on legal platforms, if a player deposits 100 reais, the actual betting amount immediately reduces to 85 reais; in the black market, 100 reais remains 100 reais, effectively encouraging players to flock to illegal markets.
More critically, the IBJR directly pointed out that the financial assumptions of the proposal "do not hold up mathematically." They calculated that the proposal expects to extract nearly 30 billion reais in taxes each year from a regulated market currently generating about 36 billion reais in annual revenue. This is almost equivalent to taking away the entire industry's revenue, which IBJR believes would make regular economic activity completely unfeasible.
Lessons from Colombia and Increased Tax Pressure in Brazil
The lesson from Colombia is clear. After imposing a 19% VAT on player deposits in February this year, the Colombian Gaming Entrepreneurs Federation (Fecoljuegos) immediately warned that online gambling's total gross revenue (GGR) plummeted by 30% in the following months. This vivid example undoubtedly provides strong evidence for the opposition against the deposit tax in Brazil.
However, the industry's pressure has not been fully relieved. Another bill aimed at gradually increasing the GGR tax rate for operators from the current 12% to 18% by 2028 (PL 5,473/2025) was approved by the Senate Economic Affairs Committee on December 2nd. Although the bill was temporarily slowed down due to appeals and did not reach the final vote in the House of Representatives before the congressional recess, it still hangs over the operators like the Sword of Damocles.
Ongoing Regulatory Challenges and the Future of the Market
The postponement of the CIDE-Bets vote has secured valuable discussion time for Brazil's gambling market. However, the dual shadows of the deposit tax and the GGR tax rate increase clearly outline the difficult balance this emerging market faces between pursuing fiscal revenue and ensuring the healthy and sustainable development of the industry. The debate over the tax structure will remain a core issue in Brazilian gambling regulation over the next year, and its outcome will profoundly affect the market strategies and investment confidence of international operators.
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This article is from "PASA-Global iGaming Leaders," a gambling industry news channel:https://t.me/pasa_news
Original in-depth gambling channel:https://t.me/gamblingdeep
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PASA Matrix: @pasa002_bot
PASA official website: https://www.pasa.news
