SBC News Voice of the Sports Betting Industry
The regulatory agenda of Brazil’s Bets regime has been dominated by the primary objective of safeguarding Bolsa Família recipients from gambling. Yet emerging evidence reveals systemic fraud extending beyond online betting, exposing both moral and legal fractures in the effort to shield Brazil’s poorest from economic harm.
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In September, the Central Bank of Brazil (CB) released its ‘monitoring report’ detailing a staggering volume of online bets placed by recipients of Bolsa Família programme, an insight that stunned the PT government to tighten the social safeguards of online gambling.
Grabbing national headlines, the CB observed that “at least R$3bn (€390m) was transferred via Pix”, Brazil’s instant payment network, to online gambling platforms in a single month by recipients of South America’s largest social welfare programme.
The magnitude of bets placed by Bolsa Familia users has been referenced by all authorities and stakeholders scrutinising the development of Brazil’s nascent online gambling market, with proposals to safeguard Bolsa Familia becoming the primary objective of authorities.
Yet, the latest affairs saw Wellington Dias, Minister for Social Development, flag inconsistencies of the CB data and internal records of Bolsa Família recipients. The figures simply didn’t add up for people living below the poverty line.
Alarmed, the Minister requested a Federal Police investigation. What they found was more concerning than previously thought as mounting evidence that CPFs—Brazilian taxpayer ID numbers of welfare recipients – were being used fraudulently, often without the knowledge of users for illicit betting transactions.
“Incompatible with reality,” was how Dias described the transactions. “Everything indicates that CPFs are being used without the knowledge of the holders.”
In one case after another, many beneficiaries living in low-income households and without digital literacy were stunned to discover thousands of Reais supposedly moving through their names. “God forbid I had that kind of money,” one woman told authorities.
Systemic Fraud
What has emerged is a picture of systemic abuse, where identities of the poor are hijacked to launder money and mask fraud on unlicensed betting platforms. The problem, as often in Brazil, is dual-natured due to a lack of enforcement in a rapidly evolving market, and a lag in digital safeguards within economically marginalised communities.
Since its January 2025 launch, Brazil’s regulated betting market “the Bets Regime” has been under intense scrutiny to bolster sought after social safeguards protecting Brazil’s poor from gambling – a demand coming from the highest ranks of President Lula da Silva.
Yet change has exposed the fragility of regulatory infrastructure. The government hoped regulation would crowd out the black market, plug tax leaks, and impose order on a chaotic sector, as regulation harmonised conditions. Instead, Dias believes that it has uncovered cases of fraud maligning Brazil’s poorest.
The political response has been swift. In November 2024, the Supreme Federal Court ruled unanimously that social benefit payments must not be used for gambling. This was not just a fiscal matter but a moral one, said Justice Luiz Fux, who authored the decision. The government was ordered to impose safeguards to protect vulnerable communities.
Yet the technical implementation has proved complex to apply. Initially, authorities attempted to block Bolsa Família cards from being used on betting platforms. That strategy failed. Most recipients receive funds via bank transfer—not on traceable prepaid cards—making it easy for illicit use to slip through the cracks.
In response, the Secretariat of Prizes and Bets (SPA), part of the Ministry of Finance, escalated the approach. Under Secretary Regis Dudena, the SPA proposed forthcoming ban on all recipients of Bolsa Família and the Benefício de Prestação Continuada (BPC), a pension-like benefit for low-income elderly citizens, from placing any bets at all—regardless of where the funds originate.
If implemented, the restriction would affect nearly 60 million Brazilians—over a quarter of the population—effectively excluding them from the newly formalised gambling economy. Dudena defended the move as a legal necessity: “Given that we need to comply—it is a Supreme Court decision that demands it—we are taking this precaution.”
Though the SPA intentions are clear, a conflict appears on the horizon as the leadership of the CB states that the Bank’s systems and controls cannot be used as a consumer protection of Bets. Under testimony CB President Gabriel Galípolo, stated that the Bank wanted “no role in regulating online gambling.”
Thin Line of Protection and Prejudice
The decision has provoked debate. On one hand, it appears a sensible defence against the exploitation of the financially vulnerable. On the other, it risks entrenching an authority divide between those deemed capable of personal authority and those who are deemed as unable.
Critics point to a contradiction: many Brazilians outside the welfare system, including middle-class bettors, routinely engage in risky financial behaviour, yet face no such prohibitions. By contrast, beneficiaries of Bolsa Família, whose use of gambling platforms are statistically minimal (just 3.4%, according to Dias), are being pre-emptively barred.
There are currently no restrictions preventing recipients from spending on items such as tobacco, alcohol, or medical supplements—so why should gambling be treated differently? Wellington Dias is adamant that the government’s approach is about harm reduction, not stigmatisation:
“We must not reinforce prejudices against people already suffering from so much,” he said. He has also positioned the issue within a broader health framework.
The Ministry of Health now partners with his department to address gambling addiction, with roughly 190,000 Brazilians currently receiving treatment via the public healthcare system (SUS).
Bad Actors target soft regime
At the core of this crisis is Brazil’s failure (so far) to control its gambling industry. Legal platforms account for less than half the market; illegal operators, by some estimates, capture as much as 60%, generating R$1bn in gross revenue monthly. Despite government crackdowns, including the removal of over 11,500 illegal betting sites, the black market remains stubbornly resilient.
To shift the tide, the SPA has demanded all licensed operators to submit anti-money laundering and counter-terror financing protocols by March 2025. It is a start, but enforcement remains uneven. Brazil’s telecommunications watchdog, ANATEL, admitted last year that it lacked the legal tools to block illegal sites effectively—likening its efforts to “drying ice”.
The sheer scale of Brazil’s gambling market -an estimated R$30bn bet per month—demands regulation. But regulation without rigorous enforcement, social safeguards, and transparency mechanisms is a hollow exercise.
Protections at a crossroads
The future of Bolsa Família and the integrity of its social safety net are now intimately tied to the fate of the Bets market. The question is not just how to regulate gambling, but how to do so without undermining the very citizens these programmes are meant to protect.
The country is learning that digital markets are not neutral spaces. When exploited, they reflect and amplify existing inequalities. The task ahead is clear: protect the vulnerable, prosecute the fraudsters, yet the state must not become implicit by creating a checks and balances system that is engineered against the poor.
