Brazil Bets threatened by Illegal exposures and irregularities

Recent enforcement activities underscore growing concerns about Brazil’s vulnerability to unlicensed gambling, with market irregularities posing a risk to the integrity of the Bets regime ahead of its imminent launch.

Anatel, the National Telecommunications Agency of Brazil, has been ordered to ramp up blocking enforcements against unlicensed gambling websites.

On Tuesday, the Secretariat for Prizes and Betting (SPA), the regulatory authority of Brazil’s forthcoming Bets market, issued a new order for over 1,800 domains to be blocked by Anatel.

Since October 1, the SPA has filed three separate orders with Anatel, requesting the agency to block the IPs of over 5,200 unlicensed websites.

The SPA continues its strict campaign against unlicensed websites as Brazil prepares for the launch of its federal framework to regulate fixed-odds betting and online gaming, scheduled for January 2025.

The application phase for Bets licenses concluded on September 30, during which the SPA had previously announced a “hard deadline” of October 1 for unlicensed operators to exit Brazil.

“Like Drying Ice” 

Carrying out its duties, Anatel confirmed that it had issued the block orders to over 20,000 internet service providers active in Brazil. However, the agency noted that its powers are limited, as Brazilian ISPs are ultimately responsible for implementing the blocks quickly and effectively.

Carlos Baigorri, Anatel’s president, highlighted technical challenges, explaining that betting platforms can circumvent blocks by leveraging alternative digital infrastructures or unregulated IP domains. Baigorri stated that Anatel’s powers are limited to coordinating the implementation of blocks and do not extend to managing domain names or IP distribution.

Anatel warned the SPA and Ministry of Finance (MF) that unlicensed platforms will find ways to bypass the blocks, such as using alternative digital infrastructures or switching to new IP domains not under Anatel’s oversight.

Baigorri described the process as “like trying to dry ice.” He elaborated: “We receive the list of domains from the Ministry of Finance, block them all, and then the Ministry of Finance continues monitoring to see if the domain has changed, the name was altered, or the site has moved to a new domain.”

‘Parallel markets’ target consumers  

In further developments related to gambling infringements, “serious irregularities” have been reported to the Ministry of Justice.

An investigation conducted by the National Secretariat for Sports Betting and Economic Development of Sports (SNAEDE) identified over 53 accounts and 25 YouTube channels promoting sports betting with “promises of quick and easy profits,” attracting over 100,000 viewers, primarily targeting audiences under 25.

The investigation also highlighted the possible existence of a parallel market, with influencers, advertisers, and developers benefiting financially from illegal activities.

André Fufuca, Minister of Sports, lambasted social media platforms and called for stricter monitoring of media promoting gambling: “We are talking about thousands of Brazilians who, deceived by promises of easy profits, end up being victims of fraud. Sports betting must be regulated to guarantee transparency and security to the population. Our priority is to protect Brazilians and guarantee the integrity of sport.”

Bonus Ban ahead of Bets launch 

Further regulatory developments saw The National Consumer Secretariat (SENACON), demand that the modalities of the Bets market be amended to  prohibit online gaming and betting operators from offering bonuses, prizes, or promotions to users across Brazil.

The Interventions seeks to combat deceptive advertising and protect users from exploitation through promotional tactics, in which SENACON mandated removal of gambling incentives “throughout the national territory, any advertising of rewards related to advances, upfront payments, bonuses, or prior advantages, even under the guise of promotions, marketing, or advertising, for the purpose of placing bets.”

As December approaches, Regis Dudena, President of the SPA, announced this week that the secretariat has initiated the final procedures for licensing operators.

The SPA will announce all qualified operators by the end of December. These operators will then have a 30-day period to fulfill the final authorization requirements, which include the payment of an upfront R$30 million (€5 million) concession fee and the completion of checks on certified platforms.