Brazil Faces Over 2,000 Illegal Betting Sites Ahead of Licensed Market Launch

Over 2,000 illegal betting sites are still active in Brazil, threatening the integrity of the upcoming licensed market.
Despite efforts by Anatel and ANJL, current measures are proving ineffective, prompting urgent calls for more robust solutions.
Protecting licensed operators and players requires a comprehensive strategy, including innovative payment blocking and enhanced regulatory authority.
Explore the challenges Brazil faces in its battle against illegal betting sites and what’s at stake for the regulated market.

Brazil Grapples with 2,000 Illegal Betting Sites as Regulators Call for Stronger Enforcement

Key Points

1. Over 2,000 illegal betting domains remain operational in Brazil despite efforts to block them.
2. ANJL and Anatel call for stronger measures, including enhanced legal authority and payment blocking.
3. Illegal sites threaten the viability of Brazil’s licensed market, set to launch on January 1, 2025.

As Brazil prepares to launch its licensed betting market on January 1, 2025, the presence of over 2,000 illegal betting sites poses a significant challenge. Despite efforts by the country’s telecommunications regulator, Anatel, to block these domains, the ANJL (National Association of Legal Gaming) warns that current measures are inadequate, leaving licensed operators and players vulnerable.

Anatel’s Struggles with IP Blocking

Earlier this month, Anatel reported difficulties in blocking illegal betting sites identified by the Secretariat of Prizes and Bets (SPA). The SPA provided a list of over 5,200 illegal domains for Anatel to address. However, Anatel’s president, Carlos Baigorri, likened the effort to “mopping up ice,” as illegal operators quickly circumvent IP blocks by launching mirror sites.

Baigorri admitted that Anatel can only monitor the largest companies, covering 80%-90% of the market, and lacks the resources to enforce widespread blocking effectively. To improve enforcement, Anatel has requested BRL7.5 million ($1.3 million) in funding to invest in advanced technologies.

ANJL’s Call for Action

The ANJL has echoed Baigorri’s concerns, describing the illegal betting landscape as an “alarming scenario.” The association’s president, Plínio Lemos Jorge, stressed that urgent action is needed to separate legal operators from illegal ones.

“Legal betting sites cannot withstand competition from illegal operators that evade taxes, harm society, and tarnish the industry’s reputation,” Lemos Jorge explained.

The ANJL identified illegal operators as the industry’s greatest challenge, emphasizing that their unchecked activities undermine trust in the licensed market and Brazil’s reputation on the global stage.

Payment Blocking: A Promising Solution

Industry leaders and regulators increasingly see payment blocking as a more effective solution than IP blocking. Many illegal operators rely on Pix, Brazil’s instant payment system managed by the Central Bank, for transactions.

Hugo Baungartner, CCO of Aposta Ganha, highlighted the potential of this approach:

“The only way to effectively counter illegal sites is through payment methods like Pix. Blocking IPs or URLs doesn’t work long term.”

The government has already announced plans to block payments to illegal operators using Pix, a move widely supported by legal operators. This strategy aims to cut off the financial lifelines of illegal sites, forcing them out of the market.

The Stakes for Brazil’s Licensed Market

Illegal betting sites pose a serious threat to Brazil’s regulated market, which aims to provide a secure, tax-compliant gambling environment. With nearly 78% of Brazil’s 14.6 million online gambling users engaging with unregulated platforms, the stakes are high.

Unchecked illegal activity not only reduces potential tax revenues but also jeopardizes consumer protection. Licensed operators, burdened with regulatory compliance and taxes, face unfair competition from illegal sites offering unrestricted and often misleading services.

Brazil’s battle against illegal betting sites is at a critical juncture. As the country gears up for the January 2025 launch of its licensed market, regulators must adopt more effective measures to combat unregulated operators.

While IP blocking has proven insufficient, strategies like payment blocking via Pix offer a promising path forward. Combined with enhanced funding and authority for Anatel, these efforts could safeguard the integrity of Brazil’s regulated gambling ecosystem.

For Brazil’s licensed operators, regulators, and players, the stakes couldn’t be higher. The success of the new market depends on the country’s ability to enforce compliance, protect players, and establish a level playing field.

As January approaches, the world watches Brazil’s efforts to clean up its gambling landscape and set a standard for regulated markets worldwide.