Brazil’s Chamber of Deputies Removes CIDE-Bets Deposit Tax from Antifaction Bill Before Final Approval

Licensed betting operators in Brazil have avoided the introduction of a 15% tax on player deposits after the Chamber of Deputies voted to strip the provision from the Antifaction Bill prior to its approval on Tuesday.

The proposal, known as CIDE-Bets, had originally been included in the bill passed by the Senate plenary in December. At that stage, the legislation not only sought to strengthen penalties against criminal organisations but also introduced a 15% levy on deposits made by players to licensed betting platforms.

However, an amendment put forward by Dr Luizinho succeeded in removing Article 14, the specific clause establishing the deposit tax. Deputies approved the amendment on Tuesday, effectively eliminating the measure before the bill moved forward.

In addition to the withdrawal of the deposit tax, lawmakers also scrapped a controversial retrospective measure titled the Special Regime for the Regularisation of Exchange and Tax Assets (RERCT Litígio Zero Bets). This rule would have imposed a 15% tax on gambling revenues generated by operators between 2018 and 2024, prior to the sector’s formal regulation.

According to remarks reported by Valor Econômico, House of Representatives Speaker Hugo Motta defended the removal of the article, stating it was necessary so “the text can be voted on without the wider disagreements of the previous vote”.

With the amendments in place, the Antifaction Bill secured approval in the Chamber and now awaits final sign-off from President Luiz Inácio Lula da Silva.

Despite the defeat of Article 14, few believe the debate over CIDE-Bets has been settled permanently. There is growing expectation within the industry and political circles that a similar taxation proposal could soon re-emerge as a standalone bill, keeping pressure on Brazil’s newly regulated betting market.

The decision to remove the deposit tax provoked sharp criticism from several politicians. Federal Deputy Reimont accused right-leaning colleagues of being “in the hands of betting companies”. Meanwhile, Otoni de Paula argued that the betting sector was contributing to economic imbalance, declaring: “Betting, in this past year alone, moved BRL30 billion monthly, BRL360 billion annually.

“Ladies and gentlemen, do you know the estimated GDP of São Paulo? BRL388 billion. Betting drives São Paulo’s GDP. And now this House wants to give a gift to betting. Anyone who votes in favour of this is voting for the betting lobby.”

Jandira Feghali also voiced support for taxing the industry, stating: “We need to tax betting. Anyone who doesn’t want to tax it is in favour of organised crime.”

Supporters of the tax argue that the financial returns could be substantial. Congressman Lindbergh Farias estimated that CIDE-Bets could generate an additional BRL30 billion ($5.5 billion) in revenue, funds he suggested would be channelled into the National Public Security Fund.

Within the regulated betting sector, however, the removal of the deposit tax has been received as a reprieve. After the Senate initially approved CIDE-Bets last year, Udo Seckelmann, Head of Gambling & Crypto at Bichara e Motta Advogados, warned that introducing the levy could drive channelisation rates for licensed operators below 20%. He characterised the potential consequences as “disastrous”.

Plínio Lemos Jorge, president of the National Association of Games and Lotteries, echoed those concerns at the time, arguing: “Although the project’s stated objective is to combat criminal organisations, the over-taxation of the regulated market tends to produce the opposite effect.”

The industry is already contending with an escalating tax burden. President Lula has approved a phased increase in taxation on gross gaming revenue (GGR), raising the rate to 13% this year. The tax will climb by one percentage point annually until it reaches 15% in 2028. These obligations come in addition to existing liabilities such as PIS/Cofins and municipal taxes, further intensifying the fiscal pressure on licensed operators operating in Brazil’s newly structured betting landscape.

By fLEXI tEAM