Brazil Blocks 2,000 Illegal Gambling Sites Ahead of Market Launch

On October 11, 2024, Brazil’s Ministry of Finance launched an effort to block more than 2,000 gambling websites operating without authorization. This nationwide crackdown, led by the Ministry’s Prizes and Betting Secretariat (SPA), is part of the government’s strategy to secure a regulated and safer gambling environment ahead of Brazil’s fully legalized market, set to launch on January 1, 2025.

The SPA’s investigation led to the identification of 2,040 domains engaging in illegal gambling activities. The National Telecommunications Agency (Anatel) has started collaborating with local internet service providers (ISPs) to block access to these sites, ensuring they cannot reach Brazilian consumers. Anatel’s president, Carlos Baigorri, indicated that each provider would implement these blocks based on their technical capabilities.

Protecting Consumers and Securing a Regulated Market

Regis Dudena, Secretary of Betting and Gaming at the Ministry of Finance, emphasized the importance of moving Brazilian bettors toward a legal framework. “It is very important for bettors to understand that, for the sake of their mental and financial health, it is better to be in a regulated environment,” Dudena explained, pointing to the safeguards in place within a licensed market.

Under the current system, only 96 companies operating across 210 gambling websites have applied for licenses and are permitted to continue functioning in Brazil until the end of 2024. These companies will undergo a thorough licensing process, which includes paying a concession fee of R$30 million (approximately €6.54 million) and adhering to strict anti-fraud and anti-money laundering measures.

The SPA has also begun monitoring social media channels to track unlicensed operators that continue to target Brazilian consumers. Authorities are actively identifying additional unauthorized platforms and working with Anatel to ensure compliance. Dudena reiterated that separating licensed and unlicensed operators is critical for safeguarding both bettors and the broader economy. He warned that participating in illegal activities contributes to companies that may defraud consumers.

Blocking Unlicensed Operators and Ensuring Compliance

The Ministry’s actions stem from a growing concern over the unregulated gambling market’s impact on Brazilian society, particularly amid rising concerns about addiction. Since online betting was legalized in 2018, over 52 million Brazilians have engaged in gambling activities, leading to heightened vigilance from both finance and health authorities.

To combat the illegal market, Anatel’s site-blocking initiative prohibits unlicensed operators from advertising on traditional media, social media platforms, and sports sponsorships. This move directly affects several major international gambling operators that failed to comply with Brazil’s regulations. Among the blocked brands are European names like Betclic, Betfred, and Ladbrokes, which either missed the September 30 licensing deadline or did not meet the regulatory requirements.

Flutter Entertainment, for instance, limited its Brazilian presence by continuing only under the Betfair and NSX Group brands while ceasing operations under others, such as Paddy Power. Other operators, including Entain, have restructured their Brazilian operations to meet local demands, with the Sportingbet brand applying under a local company name to comply with administrative complexities.

Looking Toward 2025: Ensuring a Safe Gambling Environment

Companies that remain on Brazil’s approved list are now in a probationary phase, during which they must comply with consumer protection laws, including the Child and Adolescent Statute. The SPA will continue evaluating these operators’ adherence to the rules until full licenses are issued in January 2025. Any violations during this probationary period could result in the suspension of their operating privileges.

Minister of Finance Fernando Haddad reiterated the importance of these regulations, noting that protecting bettors’ integrity and financial security is paramount. He stressed that companies that have not applied for licenses cannot legally operate in Brazil, and only those that fully comply with the new laws will be permitted to operate after the official market opens.

As Brazil works to build a robust regulatory framework, the federal government has highlighted the importance of transparency and ongoing oversight. SPA Secretary Dudena confirmed that the Ministry of Finance would continuously monitor blocked sites to prevent them from regaining access. "This is a very important first step that will be further developed," Dudena said, explaining that the effort will continue beyond 2025 to protect consumers and uphold regulatory standards.

Source:Brazil Initiates Nationwide Block on 2,000 Illegal Gambling Sites, LCB.org, October 14, 2024.