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Crédito: Unsplash

So it is. Good news on the way. The Brazilian government realized that the market was not functioning correctly and there are changes on the way, namely, a team designed solely and exclusively to monitor illegal betting houses. The law allows betting, why are there so many bookmakers that operate outside the law? Because they don’t want to pay their taxes in Brazil. It’s simple.

However, this creates greater danger in the market and the Brazilian government is about to act. In this article you will discover, among other things, how payments via Pix enhance this, what the government is preparing where a super specialized team stands out and what the central role of the bank is in all of this. Before we go any further, let’s understand the importance of the regulated market – both for bettors and for society in general.

First of all, how important is it to regulate the market?

There are several important things to highlight. Let’s go in parts. As a bettor, you certainly want to stay within the law when placing your bets. And clearly, “staying within the law” means that you can place your bets in a safe environment. Gone are the days when betting was illegal and there was no way to place bets legally. Today, everything has changed. And placing bets illegally is condoning tax avoidance and is not protected. If the company doesn’t want to pay that bet you won, how are you going to legally complain? You won’t be able to.

From society’s point of view, bookmakers must be legal and regulated because if they don’t do so they are contributing to a wild market devoid of any sense of rules. When things operate under the hat of the law, no one gets wet – not business owners, not customers. Illegal bbookmakers create a deregulated, uncompetitive market and there is a lack of tax collection that should be done. In this case, only the bookmaker wins and everyone else loses. Be it bettors, society, government… everyone.

What is the Brazilian government doing to avoid the situation explained above?

The Brazilian government is planning far-reaching measures to prevent illegal betting operators from processing payments before the start of the legal betting market on January 1, 2025. According to Ari Celia, director of Pay4Fun, the Brazilian Ministry of Finance has already created a new department that will specifically target the illegal market. And what will this new team that aims to target illegal betting providers look like?

Well, this new department will be made up of eight ministry officials who will focus on preventing payments to and from illegal suppliers. They should address industry complaints and hold illegal websites and unlicensed payment providers accountable.

Instant Pix payments

One of the most effective measures announced by the Brazilian government is the blocking of payments to illegal suppliers through Pix, an instant payment system managed by the Central Bank of Brazil. Pix is ​​used by most of the Brazilian betting market. In other countries, such as Germany and several European markets, regulators are having difficulty blocking payments to black market operators. This is often due to legal obstacles and the decentralized payment system.

However, Ari Celia is optimistic that blocking Pix payments in Brazil will be successful, as Pix is ​​controlled by the Central Bank and, ultimately, the government. According to Celia, as soon as a commercial bank receives a warning from the Central Bank that a customer is using illegal betting sites, the bank account is immediately blocked.

Central role of the Central Bank in regulating betting

Pay4Fun, which is authorized by the Central Bank to provide payment services to various entertainment sectors, including betting and games of chance, emphasizes the important role of the Central Bank in regulating the legal betting market. To act as a payments provider in the Brazilian betting market, approval from the Central Bank will be required. The central bank has direct access to commercial banks and can therefore effectively block unlicensed operators.

Few alternatives to illegal suppliers

If Pix payments are blocked, illegal suppliers will have few options. According to Celia, cash transactions are becoming increasingly rare in Brazil and processing money for online operations is extremely complicated. Cryptocurrencies are also not a viable alternative, as licensed operators are not permitted to accept cryptocurrencies by law.

Furthermore, the Brazilian population predominantly uses cryptography as an investment object and not as a means of payment. As the purchase of cryptocurrencies is made through cryptocurrency exchanges, users are required to provide personal information that is monitored by the central bank.

Celia believes that it will be extremely difficult for illegal operators to operate in Brazil, given the Central Bank’s ability to detect and prevent unauthorized crypto transactions. Concrete measures are already being taken, but what’s next? We have to wait and see.