Illegal Gambling Threatens Brazil’s Betting Market as Industry Prepares for Regulation

Brazil’s legal betting industry faces growing concerns over illegal gambling operations, with leaders warning of significant risks to the regulated market set to launch in 2025.

The president of the National Association of Games and Lotteries (ANJL), Plínio Lemos Jorge, has cautioned that Brazil’s legal betting operators may exit the market if illegal gambling remains uncontrolled. These warnings come as Brazil prepares to officially roll out its regulated betting market on 1 January 2025.

The Secretariat of Prizes and Bets (SPA) has confirmed that 71 operators have obtained licenses, with 16 paying the BRL 30 million ($4.9 million) concession fee required for participation. However, an estimated 2,000 unlicensed gambling platforms continue to operate, posing a significant challenge to the legal sector.

Illegal Gambling: A Persistent Threat

Lemos Jorge has expressed concern that unchecked illegal gambling could discourage licensed operators. He stated, “If the market scenario does not favour expected returns, those who are already here may leave.” Illegal platforms avoid taxation and regulatory costs, undermining player protections and exposing vulnerable groups, including children, to potential harm.

Carlos Baigorri, president of the National Telecommunications Agency (Anatel), described the battle against illegal operators as akin to “mopping up ice,” highlighting the difficulty of shutting down unlicensed sites.

Strengthening Oversight and Enforcement

Proposed solutions include empowering Anatel with enhanced legal authority to expedite the shutdown of illegal sites. Lemos Jorge advocated for legislative changes that would streamline the process of blocking unlicensed websites, reducing their operational lifespan.

In addition to targeting sites directly, Brazil’s new regulations aim to disrupt illegal platforms financially. Payments made via Pix, the country’s popular instant payment system, will be restricted for unlicensed operators. This measure seeks to cut off a key revenue stream for illegal gambling. Lemos Jorge emphasized the need to hold financial institutions accountable, warning that they could face penalties for facilitating transactions with unlicensed operators.

Confidence in Regulation Despite Challenges

While challenges persist, Lemos Jorge has expressed optimism about Brazil’s regulated betting market. He praised the robust regulatory framework established under Law 14,790/2023, describing it as one of the strongest globally. He also emphasized the collaborative efforts between government agencies and private stakeholders to create a secure and sustainable betting environment.

The ANJL and Anatel are expected to announce additional measures in the coming weeks to combat illegal gambling and ensure the success of the regulated market.