Brazil looks to impose severe penalties in fight against illegal gambling
Brazil looks to impose severe penalties in fight against illegal gambling
The Communication Committee of the Chamber of Deputies approved a bill that establishes a legal framework to combat illegal betting and gambling, aiming to strengthen financial, administrative, technological, and legal action against unauthorized operators.
According to the Chamber of Deputies News Agency, the text defines an unauthorized operator as any individual or legal entity that engages in gaming or betting activities without an official license. It also creates a set of mechanisms to restrict their operations, particularly within the financial system and on the internet.
The bill mandates financial and payment institutions to adopt protocols to identify transactions involving irregular operators and to publish monthly reports containing information about the volume of operations, the blocks enforced, and internal controls adopted. However, customer identification must not be disclosed.
These institutions will also be required to integrate into information-sharing systems concerning fraud and must also check updated databases of illegal operators, which will be maintained by the Ministry of Finance.
Non-compliance with these regulations could result in fines up to R$ 20 million, service suspension, and restrictions on using payment methods such as Pix and TED in severe or repeated cases.
The text states that the Central Bank will regulate mechanisms to prevent the misuse of Pix by unauthorized betting operators.
The rapporteur, Deputy Delegate Paulo Bilynskyj, supported the approval of Bill 4044/25, authored by Deputy Paulo Litro and others. The committee also approved an amendment made by Bilynskyj to the original wording to remove the phrase that limited the proposal to institutions “authorized to operate by the Central Bank.”
According to the rapporteur, this change is essential to close regulatory gaps and prevent illegal operators from shifting to institutions outside regulatory oversight. “Otherwise, unauthorized operators could migrate to institutions outside the regulatory perimeter that wouldn’t hold the same responsibilities,” argued the rapporteur.
With this amendment, the obligations apply to all financial and payment institutions, including fintechs under special regimes, gateways, and indirect participants in payment arrangements.
The bill modifies the Betting Law to require authorized operators to implement geolocation systems capable of blocking access from abroad or via VPN. It also mandates internet service providers to maintain a permanent channel with the regulator to comply with blocking orders.
The proposal expands prohibited conduct, banning, for example, any form of advertising or offering technological infrastructure that facilitates the operation of unlicensed operators. Technical and legal services aimed solely at obtaining official authorization remain permitted.
It establishes that operating or facilitating unauthorized betting can result in imprisonment for a period of 2 to 6 years. Additionally, intermediating payments for illegal operators carries the same punishment, but the penalties may be increased if anonymity technology is utilized or if funds are transferred abroad. The unlawful promotion of betting is penalized with imprisonment ranging from 1 to 4 years, particularly if the content is directed at children or spread by digital influencers, which constitutes an aggravating factor. Actively hindering or preventing efforts by authorities or service providers to restrict access to websites or online resources that are deemed illegal, can lead to imprisonment for 2 to 5 years.
The bill reinforces Anatel’s role in combating illegal betting sites, directing the agency to maintain a channel for blocking orders and coordinate technical measures such as blocking by DNS, IP, SNI, and detecting mirror sites, with penalties for companies that fail to comply with the regulations. The text also establishes cooperation between the Ministry of Finance, Central Bank, Anatel, and Coaf, creating a unified database of irregular operators, quarterly reports, and an official channel for anonymous complaints.
The proposal will be analysed by the Finance and Taxation and the Constitution, Justice, and Citizenship committees and is subject to plenary review.
