The bill proposes a tax on player deposits, as well as retrospective taxes on activities of licensed operators in the lead up to regulation.
Brazil’s licensed gambling sector has received another blow after the Senate plenary this week approved a 15% tax on player deposits, sparking concerns about the impact on black market activity.
On Wednesday, the Brazil Senate plenary approved the Antifaction Bill. Alongside increasing penalties on criminal groups, it includes the introduction of a 15% tax on player deposits made to licensed platforms.
The measure forms part of the wider Antifaction Bill, which was approved on a vote of 64-0. Because the bill was amended, it will now go back to the Chamber of Deputies, where it will be analysed before being sent to Brazil’s president for approval.
The resources from the newly created CIDE-Bets tax will be allocated to the National Security Public Fund. The new tax is estimated to bring in annual revenue of around BRL30 billion ($5.5 billion) for the fund.
Additionally, the Antifaction Bill reintroduced the RERCT Litígio Zero Bets, which will request operators pay a 15% retroactive tax on their gambling activities between 2018 and 2024, in the lead up to regulation on 1 January this year.
Brazil industry raises concerns over the illegal market
Colombia presents a cautionary tale of the impact of taxes on player deposits as it introduced a 19% value-added tax on player deposits in February this year.
By April, the Colombian Federation of Gaming Entrepreneurs (Fecoljuegos) trade body claimed online gross gaming revenue in Colombia had dropped by 30% since the VAT was introduced.
“The implementation of VAT has made the gaming experience in the formal market more expensive, creating an incentive for players to seek unregulated alternatives, where no taxes or controls are applied,” Fecoljuegos said.
The Brazilian Institute of Responsible Gaming (IBJR) is wary that such consequences of taxing player deposits are also likely to occur in Brazil, pointing to studies that claim 51% of the market is already operating illegally.
The body said the CIDE-Bets tax will strengthen organised crime and give illegal operators “the greatest competitive advantage the market has ever seen”.
The IBJR also raised concerns over the sustainability of the sector considering the possibility of retrospective tax collection on licensed operators.
“By taxing the bettor’s deposit at 15%, the state decrees that BRL100 is only worth BRL85 in companies that follow the law,” the IBJR said. “In the black market, however, the same BRL100 is worth the full amount. This is a direct incentive to migrate to the illegal market.
“Furthermore, the measure is based on a non-existent financial premise. It claims to collect BRL30 billion annually from a formal market that currently generates around BRL36 billion. Therefore, it projects collecting in taxes almost equivalent to the entire revenue of the regulated sector, which is mathematically impossible and renders formal economic activity unviable.”
Gradual gambling tax rise delayed
In other news, the bill to introduce a gradual tax rise in Brazil is facing delays after 19 politicians signed a document requesting it to be analysed by the Senate plenary.
PL 5,473/2025, which would see the tax rate rise from the current 12% rate to 15% in 2026 and 2027 before reaching 18% in 2028, had been approved by the Senate’s Economic Affairs Committee.
This meant it was due to head to the Chamber of Deputies for final approval, but the appeal passed the threshold of eight signatures necessary to face further analysis in the Senate.
The appeal means the bill is now unlikely to progress before the government recess begins later this month.
Kyle has been with Clarion since December 2023, joining from the world of sports journalism, subsequently becoming a LatAm-facing senior reporter with iGB.