Brazil Gears Up for Gambling Market Launch with Major Crackdown on Black Market Activities

As Brazil approaches the much-anticipated launch of its regulated betting market on January 1, 2025, the government is taking decisive steps to clamp down on the burgeoning black market that has thrived during the protracted lead-up to legalization. Despite 113 operators having applied for licenses, this number represents just a fraction of the total active in the country, highlighting the scale of the challenge ahead.

The Brazilian government has outlined strict measures under Normative Ordinance No 827, which mandates that all operators must secure authorization by December 31, 2024. Those found operating without a license post this deadline will face severe penalties as per Normative Ordinance No 1,233. These include fines up to BRL2 billion and a prohibition on applying for a license for up to ten years.

In an innovative move, the Brazilian government is seeking to forge partnerships with major social media platforms such as Google and Meta. The goal is to eliminate advertisements for illegal gambling sites, which have been a significant factor in the proliferation of unregulated activities. These discussions aim at removing content that promotes offshore gambling operations, thereby protecting consumers and channeling them towards legal options.

The government has also introduced Normative Ordinance No 1,231, focusing on responsible gambling, which requires operators to act diligently in developing betting systems and their advertising strategies. The ordinance explicitly prohibits gambling advertisements from portraying betting as socially attractive or a path to personal and financial success. Additionally, it restricts endorsements by celebrities or influencers that might imply gambling leads to social or financial gains.

Recent controversies, such as the case involving the Asian-themed slot game Fortune Tiger, have underscored the need for stringent advertising guidelines. Influencers promoting this game were found to be central to misleading advertising practices, leading to significant financial losses among followers. This incident led to police actions in Paraná and Maranhão and has intensified scrutiny over how gambling is marketed.

Technological and Financial Interventions to Support Legal Gambling

The Brazilian government’s strategy includes technological and financial interventions, with plans to work closely with the Central Bank of Brazil to monitor and halt transactions involving illegal operators. This cooperation aims to cut off financial support to offshore gambling sites actively engaging Brazilian bettors.

Moreover, discussions are ongoing to engage internet service providers in identifying and blocking access to illegal gambling websites, ensuring that Brazilian consumers are redirected towards licensed operators.

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Regis Dudena, leader of the secretariat of prizes and betting, emphasized the comprehensive approach being taken: “We are employing all mechanisms at our disposal to ensure that come January 1, only those authorized can operate nationwide.”

The Brazilian government’s multifaceted strategy highlights its commitment to creating a safe, regulated betting environment. By tightening regulations, collaborating with technology platforms, and enforcing stringent financial controls, Brazil aims to protect consumers and ensure the success of its legal gambling sector, setting a robust framework for other nations to consider in their regulatory efforts.

Source:

“Brazil government partners social networks preparing for gambling black market battle“, igamingbusiness.com, August 22, 2024.