Government of Brazil Expands Campaign to Suppress and Regulate Illegal Gambling Activities.
Ministry of Finance in Brazil is expanding its crackdown on unauthorized Gambling activities through the implementation of automated website blocking and upcoming asset-freeze measures. Officials indicate that the next phase will involve targeting financial transactions and flows in addition to domain restrictions. Despite a recent decline in illegal betting, new research reveals that the black market remains substantial.
Enhanced Enforcement Through Automation
According to the Ministry of Finance, over 60 illegal betting websites have already been blocked. Initial enforcement efforts, conducted manually, began in January last year, but since October, the process has been fully automated. This transition allows regulators to respond more swiftly when illegal operators shift to new domains. It also reduces the need for repeated enforcement actions.
The automated system is part of a broader initiative in collaboration with the National Financial System. Authorities anticipate the release of additional regulations within this month. These measures are also aligned with Brazil’s Anti-Faction and Organized Crime Law. The law equips authorities with tools to combat illegal betting used for money laundering purposes. The Ministry has also been acting on recommendations from the Federal Court of Accounts, known as the TCU.
Brazil Moving Beyond Website Blocks: Asset Freezes
The upcoming phase aims to extend enforcement efforts from website takedowns to monitoring and freezing financial flows. Under the proposed plan, assets associated with illegal betting operators could be frozen. Consumers who can demonstrate legitimate ownership of the blocked funds would then have the opportunity to seek reimbursement. Conversely, any remaining money that cannot be proven to have a lawful origin could be forfeited, providing authorities with a more direct means to dismantle illegal betting operations.
“When this money is blocked, the affected consumer can come forward and prove that part of this money is theirs, in order to be reimbursed,” explained Carlos Renato Resende, Undersecretary for Monitoring and Enforcement at the Ministry of Finance’s Prize and Betting Department. “At the end of the process, if the legal entity cannot prove the legal origin of the money, the funds will be forfeited to the Brazilian State and allocated to the National Public Security Fund, for the fight against crime in general.”
Resende noted that the ministry is actively working with the National Financial System to finalize the additional regulations with publication expected this month. The proposed measures aim to make illegal betting operations riskier by targeting both criminal proceeds and domain names, while also establishing a process for consumers to recover funds when claims are verified.
Read Also: President of Brazil Broadens Crackdown on Online Gambling.
Illegal Market Still Holds Significant Size
Recent studies suggest that, although shrinking, the illegal betting market remains sizable. The Locomotiva Institute estimates that unauthorized betting accounts for roughly 38% to 41% of Brazil’s total market, a decrease from 41% to 51% observed in previous surveys. Eric Brasil, director of LCA Consultoria, indicated this represents an approximate 11% reduction in the illegal sector. Nonetheless, he emphasized that the remaining share remains large compared to other jurisdictions with regulated or partially regulated markets.
“This represents, in a simple estimate, an 11% drop in the illegal market. Good news: the illegal market seems to be declining. What is the worrying aspect? When we compare it to other jurisdictions, other countries, we still have a very large illegal market,” Brasil stated.
Brazil continues to lag behind nations such as Ireland, where illegal gambling accounts for 3%, Australia at 15%, and Mexico at 20%. Deputy Julio Lopes emphasized that even modest progress is valuable, as any reduction in piracy and tax evasion should be recognized. Resende, meanwhile, pointed out that no country has completely eradicated illegal betting, including Brazil. Since the legalization of fixed-odds betting in 2018, the country has introduced additional state-control tools through the 2023 Betting Law.
