Parliamentary Front speaks out against CIDE-Bets and retroactive tax collection in the Anti-Faction Bill.
The Parliamentary Front for the Free Market released a manifesto against the creation of the Contribution for Intervention in the Economic Domain for betting (CIDE-Bets) and the retroactive collection of taxes in PL 5582/2025. The document was published this Monday (15) in Brazil, criticizing the tax mechanisms proposed in the project that establishes the Legal Framework for Public Security.
The text presents data on the current taxation of the betting sector, which already reaches 26% of gross revenue and could reach 45% after the full implementation of the tax reform. Companies also allocate 34% of their net profit to taxes.
The operators have already paid R$ 30 million in licenses to operate legally in the country. In addition, they spend approximately R$ 2 million monthly on inspection fees to the federal government.
The document exemplifies the impact of the proposed CIDE-Bets tax: with a 15% rate, a R$100 bet would generate an immediate debit of R$15, leaving only R$85 available for use on the regulated platform. This could drive users to the illegal market.
"Individuals don't stop gambling just because it's prohibited by law. Gambling continues, but clandestinely, with all the problems associated with it. Therefore, prohibiting gambling is not the most appropriate way to address the practice (and addiction) of gambling," the manifesto states.
On regulated platforms, each bettor has a "registered account" where they keep their funds. The transferred money does not represent revenue for the operator, but remains the property of the user, who can bet or request a withdrawal to their personal bank account.
The Parliamentary Front cites the case of Colombia, where taxation on deposits resulted in a drop of over 30% in state revenue and an immediate growth in the illegal betting market.
The group also criticizes the Single Regularization Declaration, a retroactive collection mechanism aimed at legal entities and managers who operated fixed-odds betting in Brazil up to December 31, 2024.
The manifesto argues that the Brazilian constitutional system prohibits tax law from retroactively applying to taxable events that occurred before its enactment. This limitation protects taxpayers from tax surprises and preserves legal certainty.
The claim that the sector operated in a "grey area" does not justify this type of regime, according to the document. The Parliamentary Front states that regulatory uncertainty does not authorize retroactive punishment or the creation of a "costly pardon."
The group warns that creating a sector-specific Special Regime for Exchange and Tax Regularization (RERCT) would set a precedent, as any segment with delayed regulation could become the target of a "thematic RERCT".
The Parliamentary Front for the Free Market declares its opposition to both the CIDE-Bets tax and the Single Regularization Declaration foreseen in Bill 5582/2025. The group advocates for a tax environment that it considers more rational and predictable.
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MANIFESTO AGAINST THE CREATION OF CIDE-BETS AND RETROACTIVE TAX COLLECTION IN THE ANTI-FACTION BILL (PL 5582/2025)
The ideal path to losing revenue, weakening public safety, promoting legal uncertainty, and strengthening organized crime. The recent debate on Bill 5582/2025, which establishes the Legal Framework for Public Security, has been marked by the introduction of tax and parafiscal instruments that run counter to economic rationality, legal certainty, and the fight against organized crime itself. Two points deserve special attention: the proposed creation of the so-called CIDE-Bets and the establishment of a mechanism for the retroactive collection of taxes.
In practice, however, it is a counterproductive tax that threatens the recent formalization of the sector and, worse, strengthens organized crime in the country, with the growth of the illegal market used by criminal organizations to launder money.
Taxation of online betting companies in Brazil and worldwide occurs through Gross Gaming Revenue (GGR), which corresponds to the difference between the gross revenue of operators and the prizes actually paid to bettors. Currently, the tax burden represents approximately 26% of gross revenue – potentially reaching up to 45% after the implementation of tax reform – and 34% of net profit. In addition, online betting companies paid R$ 30 million in licensing fees to operate in Brazil, as well as approximately R$ 2 million monthly in oversight fees to the federal government.
The CIDE-Bets tax represents a much more serious risk than a simple increase in taxation. Unlike taxes levied on operators' revenue, this contribution falls directly on the total amount deposited by the user, which does not represent the operator's revenue.
It is important to highlight that each bettor has, within the betting site, what is called a "registered account," where their deposited funds and received winnings are kept. It is up to the bettor to decide whether to wager these amounts or, if necessary, withdraw them back to their own bank account. In other words, the funds transferred to the betting site are not revenue for the operator, but rather for the user.
By taxing the bettor at the time of the transfer, the model immediately and noticeably increases the cost of the consumer experience, creating a strong incentive to migrate to the illegal market, which operates without any supervision or control from the Brazilian State.
To illustrate the problem: if a 15% CIDE-Bets tax were instituted, a R$100,00 bet would result in a debit of R$15,00 at the time of the bet. In other words, the bettor would only have R$85,00 effectively available for their entertainment on the regulated platform – an impact high enough to shift a significant portion of the demand to clandestine operators, who do not collect taxes, do not protect the consumer, and are widely used by criminal organizations for money laundering purposes.
What is the consequence of this? Gamblers will be directed to a sector that has been used by organized crime for money laundering and other crimes: the illegal betting market.
As already pointed out by police authorities and public security experts, criminal factions take advantage of the lack of state oversight of the clandestine betting market to finance themselves and launder money from organized crime. With Cide-Bets, there will be an increase in financial flow to these illegal operators, who are at the service of these factions.
International experience has shown that this type of taxation is a mistake in regulating the sector. In Colombia, taxation on deposits resulted in a drop of over 30% in gross state revenue and an exponential and immediate increase in the illegal market. In the Netherlands, increased taxation also generated a greater flow of resources to the illegal market, decreasing state revenue.
As Catarino et al. (2020) observe, in free translation, “individuals do not stop gambling simply because it is prohibited by law. Gambling continues, but clandestinely, with all the problems associated with it. Therefore, prohibiting gambling is not the most appropriate way to address the practice (and addiction) of gambling.”
The Cide-Bets tax, a much more serious contribution than the tax increase on GGR, will also lead to lower state revenue due to the strengthening of the illegal market and less financial investment in areas covered by legislation regulating the sector, such as sports, health, social security, tourism, and public safety.
Therefore, if approved, the Cide-Bets tax will not only encourage the financing of organized crime, but will also generate less revenue for financing public security and other social areas.
The illegal market wins with the CIDE-Bets tax, and Brazil loses: the consumer loses, pushed towards clandestine platforms; the State loses, collecting less revenue; companies that decided to formalize their operations and invest in the country lose; and finally, society loses, seeing organized crime expand yet another source of funding.
To this already worrying scenario, another equally serious element is added: the creation of a means for the retroactive collection of taxes, the Single Regularization Declaration. This is a retroactive collection mechanism aimed at legal entities and their managers who operated fixed-odds betting in Brazil until December 31, 2024, as if the State could, a posteriori, rewrite the legal consequences of a sector that went through years of low normative clarity and regulatory transition, which explains the mass litigation.
The text starts from a flawed diagnosis and chooses an institutionally inadequate instrument, which generates serious legal uncertainty in the country's business environment. Although packaged in the easy discourse of "increased revenue," the real effect is quite different: it disrupts incentives, weakens the credibility of the regulatory framework, and signals that, in Brazil, the rule can be "adjusted" later, as convenient, which is exactly the opposite of what a minimally rational business environment, anchored in economic freedom, equality, and predictability, requires.
This, now, is an attempt to transform a problem of regulatory design and institutional transition into a revenue-raising shortcut, retroactively punishing economic agents and "regulating" through coercion, disrespecting the Federal Constitution and setting a very dangerous precedent for businesses.
The Brazilian constitutional system prohibits tax law from retroactively applying to taxable events that occurred before its enactment. This limitation exists to protect taxpayers from tax surprises, preserve legal certainty, and prevent the State from changing the outcome by decree after the fact, in direct violation of the principle of non-retroactivity and legitimate expectations.
The claim that the sector operated in a "gray area" does not support this type of regime either. Regulatory uncertainty is not a license for retroactive punishment, nor authorization for the State to create an "onerous pardon" ex post as if it were merely correcting a flaw. If there was a poorly managed regulatory transition, the correct response is to improve regulation, reduce litigation with instruments compatible with due process, and provide predictability, not to create a mechanism for retroactive tax collection that reinterprets the past for revenue-raising purposes.
Furthermore, the creation of a sector-specific RERCT sets a dangerous precedent: tomorrow, any segment subject to late regulation could become the target of a "thematic RERCT," institutionalizing legal uncertainty as a method of public policy.
Both the CIDE-Bets tax and the RERCT Litigation Zero Bets tax move in the opposite direction to what the country needs. Instead of strengthening the regulated market, they favor the illegal market, used by criminal organizations to commit crimes; instead of increasing revenue, they reduce it; instead of guaranteeing legal security, they erode it.
For these reasons, the Parliamentary Front for the Free Market clearly and firmly opposes the creation of the CIDE-Bets tax and the Single Regularization Declaration foreseen in Bill 5.582/2025, defending a rational, predictable tax environment compatible with economic freedom, which combats organized crime with institutional intelligence, and not with measures that, in practice, strengthen it.
Parliamentary Front for the Free Market
