At the Financial Oversight and Control Committee of the Chamber of Deputies, this Tuesday (27), parliamentarians and experts defended the regulation of social networks as an essential action to combat the online betting market.
According to Congressman Bacelar (PV-BA), reports of illegal operators are frequent. Bacelar, who requested the hearing, highlighted that even after the regulation of the online betting market in Brazil, reports of illegal operators operating in the country without collecting taxes and without offering guarantees of protection to bettors continue to be a problem.
“I think that a large part of these problems come from the delay in regulation. It was five years of a completely lawless land, I think that since 2023 efforts have been concentrated on enabling and now we are starting to move on to enforcement. The work of blocking websites is like mopping up ice, there are already more than 12 thousand blockages”, he said.
The law determines that the exploration of the online betting market requires prior approval from the Ministry of Treasury. In addition, it prohibits financial institutions from allowing or executing financial transactions of unauthorized companies.
“The national financial system, forgive me for the comparison, even knows who we sleep with, how can it not control this, identify it,” added Bacelar.
Monitoring
André Wainer, the Treasury Ministry’s Money Laundering and Related Activities Monitoring Coordinator, said that the ministry has already authorized 72 companies to operate in the online gambling market, corresponding to 164 brands. Another six companies (12 more brands) obtained authorization through legal proceedings.
To operate, each company pays a monthly inspection fee, which varies from R$55,000 to R$2 million, depending on the size of the company, totaling approximately R$7 million in monthly revenue for the Treasury.
He also reported that the inspection of companies will begin in 2025 and 69 lawsuits have already been filed. Thus, 20 lawsuits have already resulted in sanctions, of which five have already had their decisions overturned. In addition to three warnings and two fines worth R$1.2 million each.
This year alone, requests to block 7,000 websites are registered with the National Telecommunications Agency (Anatel). There are also ongoing investigations into financial institutions. In this case, the accusation is that they are carrying out transactions for illegal betting houses, and 69 institutions have already been notified.
The ministry is also promoting contact with social media operators to remove profiles that advertise illegally for sportsbooks. “There were 22 inspections involving digital influencers, and we have channels with companies and tech companies to request these removals and we have been negotiating with them to increase this activity on their part,” he said.
André Wainer reported that the ministry is currently studying parameters for the creation of a distinctive seal. This seal will include a token for the use of authorized brands.
Anatel Superintendent Marcelo Alves da Silva said that more than 12,000 websites have already been blocked. He explained that Anatel blocks access to illegal websites, since they are unable to block the websites themselves, which are often hosted outside Brazil, and defended the regulation of digital platforms.
Liability of online betting companies
National Secretary of Sports Betting and Economic Development of Sports at the Ministry of Sports, Giovanni Rocco Neto advocates greater responsibility for big techs to combat illegal operators.
“YouTube itself advertises illegal betting shops. This is public knowledge, and it is something that needs to be addressed. This is a much more complex discussion, which also involves regulating social networks, because it has become a no man’s land. And it’s not just Google, there’s also Meta and Instagram, there’s a lot going on there, it’s a black box and there needs to be accountability.”
According to Giovanni Rocco, the ministry has already signed five cooperation agreements with entities specializing in monitoring and integrity, with the aim of strengthening actions to combat manipulation in sports matches. However, the Ministry recommends adherence to the Macolin Convention, the Council of Europe convention on the Manipulation of Sports Competitions.
“It is a fight against transnational crime, so sometimes the game is happening here and is being manipulated abroad, or it is happening abroad and is being manipulated here, so integration with other police forces and other countries is super important,” he assessed.
Consumer Law
However, the director of the Consumer Protection and Defense Department of the National Consumer Secretariat of the Ministry of Justice and Public Security, Vitor Hugo do Amaral, stressed that Brazil already has a law to combat illicit practices. According to Hugo, this is the Consumer Defense Code, which already punishes misleading or abusive advertising.
According to him, training and guidance are already being provided at Senacom on the betting market. “Soon, we will be able to report to all of you the main data obtained from Consumidor.gov.br in complaints filed by consumers,” he said.
What the operators say
The legal director of the National Association of Games and Lotteries, Pietro Lorenzoni (pictured), said that Brazil has more than 12,000 illicit websites that do not follow any rules. He also highlighted that these portals do not prevent money laundering, do not have advertising or responsible gaming mechanisms, no consumer protection and still operate using Pix.
According to him, this illegal market is twice the size of the regulated market and needs to be curbed. For Lorenzoni, migration to the regulated market is the best way to protect consumers.
He also advocated regulating technology providers to combat the illicit market. “Worldwide best practice has shown that good regulation of these providers is the best way to combat the illicit market, because these same providers may be providing the platform for both the licit and illicit markets. If there is regulation, there is an obligation to provide only for the licit market,” he said.
Online Betting Advertising
Director of Regulatory and Government Relations at the Betting and Fantasy Sport Association, Heloísa Diniz, stated that the illegal online betting market – which, according to her, reaches 50% of the market – represents unfair competition.
She said that these brands do not pay taxes, do not adopt consumer protection measures and engage in predatory advertising. To deal with the problem, the association advocates, for example, strengthening regulatory and oversight bodies.
“We are discussing the prohibition of advertising in the regulated sector, we are discussing the imposition of various advertising restrictions, in addition to those that already exist, for the regulated sector, given that advertising in the illegal sector is happening extremely naturally on digital platforms and nothing has been addressed about this,” he stated.
She added that regulated bookmakers are unable to “upload their apps” because app stores do not allow it. Bacelar, as well as others present at the committee, regretted the absence of a representative from the Central Bank in the debate.
