SBC News Voice of the Sports Betting Industry
The sensational arrest of Daniel Pardim during his testimony before the CPI brings to light the difficulties Brazilian authorities face in pursuing justice for illicit gambling activities that occurred prior to the implementation of the Bets regime.
Drama unfolded at the latest hearings of the commission inquiry of the Bets regime led by Senators Soraya Thronicke (Podemos-MS) and Dr Hiran Gonçalves (PP-RR).
Placed under testimony on Tuesday 29 April, businessman Daniel Pardim Tavares Lima, a partner of Peach Blossom River Technology, was arrested during his hearing before the Parliamentary Commission of Inquiry (CPI).
According to senators present at the session, Thronicke ordered the arrest of Pardim for allegedly denying evidence linked to corruption charges concerning Peach Blossom River Technology.
Thronicke leads the CPI’s efforts to evaluate the economic risks and liabilities of Brazil’s rapidly expanding Bets regime, which has prompted concerns about fraud, tax and regulatory evasion. The inquiry has been taking witness testimony since February, and is set to present its reforms of Bets to improve oversight and accountability of Brazil’s nascent online gambling sector.
Pardim denied knowing Adélia de Jesus Soares, who is registered as a partner of Peach Blossom River Technology.
“He started lying from the beginning, saying he didn’t know his own business partners,” said Thronicke. “He lied more than three or four times, and we gave him chances, repeated questions. No one forms a company with someone they don’t know.”
Senators are aware that there is ample documentation linking Soares and Pardim not only to Peach Blossom but also to Payflow Processadora de Pagamentos, a digital payments firm currently under investigation by the Civil Police of the Federal District.
Authorities suspect that Payflow facilitated illegal transfers and may have served as a conduit for money laundering related to illegal online gambling websites targeting Brazil.
Though details remain under wraps, the police investigation has already drawn attention for uncovering “billions of reais” in suspicious flows – as Payflow is considered as one of the main processors used by illicit websites to service Brazilian consumers.
What appeared a routine testimony quickly turned into a high-stakes affair. Senator Hiran, who chairs the CPI, stated that Ms Soares had been expected at the same session, having received a formal summons. Her absence now raises the prospect of a coercive order to compel her testimony.
Suspicious minds
Adding to the drama, the CPI hearing descended into a verbal confrontation after the arrest was announced. Pardim’s defence counsel argued that the proceedings constituted “abuse of authority” and that his client had every constitutional right to remain silent. The lawyers were subsequently removed from the session by security.
In an official statement, Pardim’s lawyer condemned what it called an “arbitrary” and “illegal” detention – “The CPI violated its own procedures by forcing Daniel to testify,” the statement read. “This is a blatant disregard for the constitutional guarantee that an accused may remain silent and avoid self-incrimination.”
The defence also accused the committee of misinterpreting a prior ruling by the Supreme Federal Court (STF) that had reinforced Pardim’s right to silence:
“The STF decision was twisted to justify coercing our client into testifying,” the statement continued. Legal experts are divided: while parliamentary inquiries in Brazil do hold authority to issue summary detentions for perjury, some argue that this power must be balanced against constitutional protections.
The arrest is emblematic of deeper problems within Brazil’s online betting industry, a sector that has grown exponentially amid loose regulation and increasing public concern, reflected by its transition from a “grey to regulated market”.
Senator Izalci Lucas (PL-DF) suggested that Pardim may be what Brazilians call a laranja — a figurehead who lends their name to companies without actually managing them.
“These are companies like the ones behind the game Tigrinho, which moved billions and created payment processors that served as channels to send money abroad,” he said.
Senator Damares Alves (Republicanos-DF) struck a more conciliatory tone, offering Pardim a chance to cooperate: “You have a unique opportunity to collaborate with the CPI and repair your image. The damage has been done. I don’t know how staying silent will help you.”
Whether Pardim’s arrest will result in concrete legal consequences or merely serve as political theatre remains to be seen.
Justice blurred by Grey Zone
Yet the incident has yet again highlighted the extent to which the Bets regime has penetrated Brazil’s digital financial infrastructure, often operating in shadows and shielded by legal grey zones.
Hearing after hearing, the CPI has reflected on regulatory liabilities undermining the Bets regime. Last week, the Central Bank reported that the Bolsa Família welfare fund had been vulnerable to systemic abuse amounting to billions of reais prior to the launch of the Bets programme.
Brazilian authorities are pursuing strict enforcement of the Bets regime, proposing prison sentences of up to 12 years for offences such as fraud, tax evasion, and criminal activity linked to online gambling.
However, legal experts remain divided over whether Brazilian courts can impose retrospective penalties on individuals involved in illicit gambling activities prior to the formal regulation of the sector. Given the absence of a legal framework for online gambling before the introduction of the Bets regime, many argue that the transition from a legal grey area to a regulated market is simply too ambiguous to support retroactive prosecution.
As the CPI continues its investigation, it faces a dual challenge: to expose the networks behind illicit betting platforms while also navigating the treacherous waters of Brazilian legal process and political interest. With billions at stake and growing public scrutiny, the future of the Bets regime hangs in the balance.
