Supreme Court chief targets illegal betting as ‘perfect’ tool for money laundering in Brazil

Brazil’s Supreme Federal Court (STF) president, Justice Luiz Edson Fachin, has branded the spread of criminal factions a “contemporary tragedy” and warned that illegal online betting platforms have become a key channel for laundering criminal proceeds.

He argued that one of the most effective ways to confront these groups is to “suffocate” their money‑laundering mechanisms by targeting unlicensed “bets” and tightening financial controls.

Fachin was speaking in São Paulo at the inauguration of new specialised courts for organised crime and asset‑laundering cases of the São Paulo Court of Justice, where he highlighted the “structurally relevant” link between the illegal betting market and organised crime as a driver for stronger financial regulation.

He noted that a clandestine betting market operating at the margins of the state, often through apparently lawful corporate structures, is used to commit a range of offences, including money laundering, drug trafficking, smuggling, illegal gambling, extortion and corruption.

In parallel, authorities have begun to move more aggressively against illegal gambling, with recent federal operations alleging multibillion‑real transaction volumes routed through unlicensed betting sites and shell companies, and the government announcing regulations to freeze assets linked to illegal betting and redirect them to public security funds.

Fachin stressed that illegal betting operations serving organised crime now have a “transnational” character, relying on companies incorporated abroad, cryptoassets and fragmented cross‑border transfers that hinder investigations, asset freezes and asset recovery.

He underlined that he was referring not to the newly regulated fixed‑odds betting market but to an illegal and clandestine sector used as an instrument by criminal organisations, and said the relationship between organised crime and illicit betting underscores the need for tighter financial regulation and supervision focused on money laundering and related offences.

Also at the event, São Paulo Court of Justice president Francisco Eduardo Loureiro called for an urgent overhaul of Brazil’s capital markets rules, criticising anonymised investment funds and cryptocurrencies as “perfectly suited to money laundering” and insisting there is “no reason” for any asset in Brazil to be held anonymously.

Within the STF, Justice Flávio Dino has assumed a leading role on the capital‑markets side of this agenda, ordering an emergency restructuring plan for the Securities and Exchange Commission (CVM) to strengthen supervision of investment funds and reinforce the agency’s ability to tackle money laundering and other illicit activities in the market.