Brazil's Central Bank, known as BACEN, is set to enhance its oversight of illegal gambling activities across the country. The institution has issued Central Bank Resolution No 569, modifying a prior resolution aimed at expanding its analysis of fraud risks and identifying financial transactions linked to unauthorized online gambling operators.
This initiative coincided with a report from the Federal Court of Accounts (TCU) which emphasized the urgent need for improved monitoring of illegal betting practices. According to the TCU's audit, black market betting now represents between 41% and 51% of the total gambling sector, translating to illicit financial transactions valued between BRL26 billion ($5 billion) and BRL40 billion annually.
The revised resolution enhances the breadth of BACEN’s regulatory framework by incorporating specific provisions addressing betting activities. The document specifies that financial institutions must share data and evidence related to individuals or entities operating as unauthorized betting operators, as detailed in the amended Article 1A referencing Article 24-A of Statute No. 14,790, enacted on December 29, 2023.
Financial institutions are mandated to implement these monitoring and data-sharing systems by November 30, 2026. Starting December 1, they will need to report on transactions linked to accounts that may be involved in illegal betting activities.
The new requirements also stipulate that financial institutions must share information about players engaging with illegal betting sites. Both bettors and payment processing companies will be flagged by a dedicated system using the Fraud Marker, which is currently in use to report fraudulent Pix transactions.
On May 19, the TCU approved a report presented by Minister Jorge Oliveira that emphasized deficiencies in the oversight of betting companies by government entities. The report pointed out significant challenges in the industry due to illegal operators, highlighting risks such as money laundering, match-fixing, and tax evasion.
Among the TCU's recommendations to enhance federal efforts against illegal betting, one specifically calls on the Central Bank to establish protocols for halting transactions associated with illegal betting.
