City lottery used for massive money laundering scheme in Brazil
The Public Ministry of Rio Grande do Norte (MPRN) has obtained the enactment of precautionary measures for the seizure, blocking, and unavailability of assets amounting to up to R$ 145 million. The move comes after an investigation into a scheme of irregular fixed-odds betting exploitation, initially supported by a municipal law in Bodó.
The investigation conducted by the MPRN focuses on prosecuting several crimes, including money laundering, inducement to speculation, and criminal contravention related to illegal gambling and unauthorized lottery exploitation. Additionally, the investigation addresses criminal association and crimes against consumer relations.
The scheme used the municipal agency Lotseridó created by the Municipality of Bodó, as “a front” to lend an appearance of legality to dozens of online betting platforms. Bodó is a small municipality in the state of Rio Grande do Norte in the Northeast region of Brazil. The city’s municipal lottery was established at the end of 2024.
The MPRN uncovered significant financial movement. It was demonstrated, by the Bodó City Hall itself in public statements, that the companies collected around R$ 415 million in just 10 months of operation based on the transfer of 2% of gross revenue (GGR) to the City Hall of Bodó (about R$ 8 million).
The analysis also revealed the use of individuals with socioeconomic profiles inconsistent with the amounts being moved.
The official statement goes onto say that “investigations indicate the involvement of various companies, many of which show signs of being fronts, registering non-existent addresses or continuing to operate even after being deregistered with the Federal Revenue.”
In addition the MPRN acted due to “the blatant illegality of the operations, since municipalities cannot legislate on lotteries and fixed-odds betting.” This could signify trouble ahead for other municipal lotteries. Around 70 municipalities in the country have approved laws for municipal lotteries so far.
In October the mayor of the city of Bodó Horison José da Silva suspended all municipal lottery activities in the city including Lotseridó. The measure aimed to prevent “the continuation of possible irregularities and safeguard the public interest.”
