The proposal seems simple on paper. Create a new contribution to raise billions and fund areas such as public safety. But in practice, according to betting industry experts, so-called CIDE-Bets can produce exactly the opposite effect to the desired one: weaken the regulated market, reduce revenues and strengthen the underground market.
At the center of this debate is André Gelfi, consulting director and co-founder of Brazilian Institute for Responsible Gaming (IBJR)an entity that brings together the main legal operators in Brazil and around the world and operates on two central pillars: the fight against illegal platforms and the promotion of responsible gaming.
In an interview with MetropolisesGelfi explains why the creation of CIDE-Bets, in the sense discussed in the Senate, could represent a structural risk for the entire newly regulated system in Brazil.
How does the betting industry view the CIDE-Bets debate at the moment?
Our sector faces repeated challenges to clarify how it works, what its capacity to contribute to society is, and what its impact actually is. This is a very new industry, which often appears in different debates as a sort of quick solution to national problems.
The critical point is when structural decisions are taken without taking into account the economic reality of the sector, as in the case of CIDE-Bets. For IBJR, an abrupt rule change like this could be devastating and compromise the sustainability of the regulated market. This is precisely the market that the country is seeking to consolidate.
The measure envisages taxing the total amount of stakes (turnover) in order to discourage online gaming. But international experience shows that a sharp increase in tax pressure in a newly regulated sector makes operations more expensive, reduces the competitiveness of companies that respect the law and, at the same time, reinforces underground betting.
Like the case of Colombia for example, which worsened due to poorly calibrated taxation and generated a migration of bettors towards illegal platforms.
What is, in practice, the main mission of the IBJR in this scenario?
Today we represent around 75% of the online betting industry. And IBJR’s mission is to build an intact, sustainable and responsible online betting ecosystem. To achieve this, we operate on two pillars.
The first is the fight against the underground market, by helping competent bodies, such as the Secretariat of Prices and Paris, the Central Bank and Anatel, for example, to fight against unregulated platforms. Then we have responsible gaming, because we believe it is essential to put in place actions and mechanisms that help the public to play while respecting their financial and emotional limits.
We argue that effective supervision, limitation of financial operations and educational campaigns are urgent measures to protect the population and ensure that the sector’s profits remain in Brazil.
The sector is going through a decisive moment: either Brazil consolidates a safe, regulated and economically competitive environment, or it runs the risk of pushing millions of players back into illegality.
Why could the creation of CIDE-Bets affect the sustainability of the market?
When you change the rules of the game, you can have a direct impact on the sustainability of healthy activity. When regulation makes the legal market unviable, the immediate effect is to strengthen the underground market. Precisely the opposite of what we seek when we defend a safe and responsible sector.
The logic is simple: the more expensive legal games become, the more attractive illegal games become.
In a digital environment, where an underground website is just a click away, any price difference can lead users to migrate to unregulated platforms.
The Senate rapporteur mentioned having collected up to 30 billion reais with CIDE-Bets. Is this number viable?
He talks about raising 30 billion reais, but presents no technical basis explaining how this amount would be achieved. According to data from the Secretariat of Prices and Betting (SPA), the market recorded 17 billion reais in the first half. Projecting for the whole year, we reach a turnover of between R$36 and R$38 billion.
If the market gains between 36 and 38 billion reais, raising 30 billion reais would mean applying a charge of more than 80% on revenues. This level of taxation simply makes the sector unviable. Especially for companies that have decided to formalize, pay the subsidy, establish themselves in Brazil and undergo real-time inspection.
Faced with this accusation, the operator has no alternative. It must pass the cost on to the consumer. This is the only way to maintain a margin and not close the doors. The problem is demand response.
With the CIDE of 15% on deposits, a bet of R$100 now costs R$115 on the regulated market. On the underground market, the same R$100 is always worth R$100. This is an immediate price difference created by law.
The punter will not pay more on the authorized market, since he can find the same product cheaper on the illegal market. This distortion stifles the regular operator, reduces the tax base and pushes the consumer underground. This is the exact opposite of what the country needs.
Today, what is the real size of the clandestine market in Brazil?
Currently, 51% of the Brazilian market operates underground, according to data from a survey we commissioned from LCA Consultoria Econômica. Additionally, an estimated 61% of gamblers in the country have placed at least one bet on illegal platforms. And that was only in the first half of this year, according to another Locomotive Institute survey.
An important point, also taken from the LCA, is that the underground market circulates around 38 billion reais per year without paying taxes, generating tax evasion of almost 10.8 billion reais per year. This is a significant volume of resources that fail to finance public policies and circulate without any type of control or consumer protection.
So would it be premature to increase taxes before fighting the illegal market?
It is certainly premature for Brazil to talk about raising taxes before tackling what is a priority (namely the fight against illegal gambling). These are harmless measures. If the goal is to increase revenue, the first step is to formalize the market. The correct logic is to introduce illegal immigrants into the system and only then discuss the tax burden. Doing the opposite produces the opposite effect.
The example of Colombia is revealing. When the country decided to create a 19% tax on deposits, the size of the market fell significantly, by around 30%, according to widely reported industry data. Revenues also fell. Not because of a lack of control, but because the formal market has lost competitiveness and activity has migrated to unauthorized operators. These are exactly the same mechanisms that are mentioned here.
In 2025, the Netherlands experienced a similar process: by increasing the tax burden, the illegal market overtook the legal market, eroding the regulated base and reducing the resources available for public policies.
These examples show that raising taxes before tackling illegal activities is not only premature: it is counterproductive.
In the case of Brazil, would the impact be greater?
Yes. Today, the channeling rate is only 49%, meaning that half of the market already operates illegally. When the tax is collected directly from the punter, a “reverse bonus” is created which favors the underground market.
If the bettor deposits 100 reais on a regulated site and only sees 85 reais, because 15 reais remained with the government, where will he decide to play? On the legal site or the clandestine site, which one is just a click away?
In this scenario, the impact is no longer only fiscal but also social and public. In the regulated market there are a series of mandatory security systems: facial recognition, betting limits, self-exclusion mechanisms, independent certification of games and real-time monitoring by the Pricing and Betting Secretariat.
When a game is on a regulated platform, it has been certified and passed the SPA review. The premium will be paid because there is financial support and online coaching.
On an underground site, the same game can be manipulated. You can win and not receive, and there is no one to turn to.
How can the government actually stifle the illegal market?
There are three basic measures: advertising, payment methods and regulation of game providers.
In practice, this amounts to blocking the machine that supports the clandestine. In other words, prevent them from advertising, receiving money in an easy way, and having access to the same software providers used by regulated platforms.
Countries like England require that the supplier can only sell on an approved website. We understand that this is fundamental.
The IBJR also offers direct tools to bettors. How do they work?
The institute manages two public utility services on its website. The first is the Bet Alerta tool in which the user can check if a betting platform is authorized by the Brazilian government.
The second is the Myths and truthswhich clarifies doubts about responsible gaming, scams, the functioning of the sector and consumer rights.
These tools function as a sort of “digital compass” allowing punters to navigate a market that is still in a consolidation phase in the country.
What is the IBJR’s main message to Congress about CIDE betting?
“CIDE-Bets is an absolutely undesirable taxation format for market dynamics. It goes to the bettor rather than the company and it is an incentive, a reverse bonus for the underground market. International experience confirms what we say.”
Between raising more and raising better
Today, the betting sector already contributes significantly to public coffers.
In 2025, it is estimated to be around 9 billion reais in federal taxes, in addition to around 600 million reais in municipal taxes. These resources are allocated to areas such as health, education, sports, tourism and public safety.
For IBJR, the big mistake in the current debate is trying to increase the burden on those who already pay instead of tackling the main problem, namely the underground market.
Before betting, consumers can consult for free:
Bet Alert: checks if the platform is legal
Myths and truths: clarifies doubts about responsible gaming
Brazilian Institute for Responsible Gaming (IBJR)
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