TAXATION OF BETTING HOUSES AND MUNICIPAL COMPETENCE: THE CASE OF BODÓ-RN

Abstract

This article analyzes the possibility of Brazilian municipalities, especially small ones like Bodó, Rio Grande do Norte, imposing taxes on online betting shops, in light of the Constitution, infraconstitutional legislation, and case law. It provides a historical context for the practice of betting, from its prohibition in 1946 to the legalization of fixed-odds betting by Law No. 13,756/2018 and its regulation by Law No. 14,790/2023. The research examines the taxes levied on the activity, highlighting the federal government's jurisdiction and discussing the potential levy of ISS (Service Tax) by municipalities. The Bodó case study highlights the disproportionality and institutional fragility of the local initiative, which accredited 38 betting shops in a city with just over 2,000 inhabitants and no oversight structure. This scenario raises risks of unconstitutionality, tax evasion, and money laundering. The analysis demonstrates that municipal jurisdiction is limited and that attempts at autonomous regulation violate the federal pact, with municipalities acting only as collaborators in oversight and collection within constitutional limits. The conclusion is that tax harmonization between the federal government, states, and municipalities is essential to ensure legal certainty, legitimate collection, and protection against illicit practices. The Bodó case serves as a warning of the risks of local initiatives disconnected from federal legislation.