Last week, Regis Dudena, who leads the Secretariat of Prizes and Bets (SPA) in Brazil, announced that 71 operators have had their betting license applications approved. Of these, 16 companies have already paid the concession fee of BRL30 million (£3.9 million/€4.7 million/$4.9 million).
The official launch of the legal betting market is scheduled for January 1, 2025. However, as this date approaches, there remains a significant concern over the persistence of illegal operators.
### Could Illegal Competition Affect Licensed Operators?
The National Telecommunications Agency (Anatel) previously reported that over 2,000 illegal sites are still active in Brazil. Carlos Baigorri, Anatel’s president, has compared their efforts to block these sites to “mopping up ice.”
Without a more efficient strategy to curb the black market, Lemos Jorge warns that legal operators might opt to cease their operations in Brazil. “This risk is real if the illegal market isn’t tackled effectively,” Lemos Jorge told UOL Apostas. He added, “Investors already in Brazil may abandon the market if anticipated returns aren’t feasible due to the current climate.”
The growth of illegal operators could severely impact player protection. “Illegal websites harm the industry and society in various ways,” Lemos Jorge states. “Their impact is rooted in unfair competition as these platforms neither pay taxes nor bear the costs associated with establishing and operating legally within Brazil.”
Moreover, these entities seek to remain hidden, disregarding the health and safety of gamblers, particularly youth.
### What Steps Can Brazil Take?
Baigorri has urged for Anatel to be granted more authority to support its efforts in blocking illegal sites. Recently, Anatel signed a cooperation agreement with SPA to strengthen their collaborative efforts.
Discussions between ANJL and Anatel were held last week to explore further measures, with proposals expected to be announced soon. Lemos Jorge believes Anatel needs enhanced powers to improve blocking efficiency, suggesting a specific law could grant them the necessary authority.
With increased autonomy, Anatel could swiftly block detected illegal sites, preventing them from persisting and causing losses to bettors.
### Payment Blocking: An Alternative Approach
Given the challenges Anatel faces in removing all illegal sites, payment blocking has emerged as a viable deterrent. Hugo Baungartner, CCO of Aposta Ganha, stated that blocking transactions, rather than sites, is the only effective way to tackle illegal operators. He noted that unlicensed domains often resurface rapidly after being taken down.
Pix, a fast payment system regulated by the Central Bank, is prevalently used in Brazil’s gambling sector due to its capacity to process transactions in under 10 seconds. Under new regulations, payments via Pix to unauthorized operators will be blocked.
Lemos Jorge concurs that targeting payment methods is crucial to the government’s strategy against unlawful companies. “It’s essential to disrupt the payment systems fueling illegal sites,” he emphasizes.
### Lemos Jorge’s Optimism for Brazilian Betting
Despite the ongoing challenges posed by illegal operators, Lemos Jorge remains positive about the regulations established by the SPA, which promise a secure betting environment in Brazil.
“The regulatory framework set forth by Law 14,790/2023 and SPA’s comprehensive ordinances is globally recognized for its rigor,” Lemos Jorge states. “However, practical and robust oversight is necessary. A collaborative effort between government and private entities will be vital to curb or significantly reduce illegal betting activities,” he concludes.