Organized Crime Gains Strength with the Approval of Cide-Bets and Retroactive Tax Collection

The IBJR — Brazilian Institute for Responsible Gaming — vehemently repudiates the approval of Cide-Bets by the Senate’s Constitution and Justice Committee (CCJ), considering it a measure that will strengthen organized crime. Under the pretext of financing public security, the proposal makes a historic mistake: it grants clandestine platforms — many financed by criminal factions — the greatest competitive advantage the market has ever seen.

By taxing bettors’ deposits at 15%, the State effectively declares that R$100 is worth only R$85 on companies that comply with the law. In the illegal market, however, the same R$100 retains its full value. This creates a direct incentive for users to migrate to clandestine platforms.

In addition, the institute expresses concern about the sector’s sustainability given the possibility of retroactive tax collection for the past five years from companies regulated by the Federal Government.

According to research by LCA, 51% of betting platforms in Brazil currently operate illegally, moving up to R$78 billion annually, with more than half of this volume flowing untaxed. The regulated sector (49%) is expected to generate R$9 billion in federal taxes in 2025, in addition to other taxes such as PIS, COFINS, and ISS, which together represent a significant source of public funding. A new tax on deposits threatens to cannibalize this existing revenue, as it shrinks the regulated market and expands the illegal one.

Furthermore, the measure relies on a financial premise that simply does not exist. Officials claim it will raise R$30 billion annually from a formal market that currently generates about R$36 billion in revenue. In other words, the government intends to collect in taxes nearly the entire revenue of the regulated sector — a mathematically impossible scenario that would render the formal industry unviable.

Learn more about how criminal factions operate in money laundering:
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