To boost the country’s regulated sector, the Brazilian government is finally taking responsibility for cracking down on clandestine betting operations.
In a press conference, Finance Minister Dario Durigan presented a decree to freeze the assets and the gains from illegal bets from financial institutions that receive and move funds. The document was signed on Friday by President Lula.
According to Durigan, the market is very well regulated by the Secretariat of Prizes and Betting (SPA). “Now, with the ordinance that imposes joint liability on financial institutions, we will have even more means to combat the illegal market. And the new decree will impose restrictions on transactions involving clandestine bets.”
The decree signed by President Lula allows for the freezing of funds identified in financial institutions that originate from illegal bets.
According to Durigan, banks, fintechs and payment institutions will have 48 hours to freeze funds in accounts associated with betting companies that operate without authorisation in Brazil. Financial institutions may also be held jointly liable for transfers made by illegal betting operations.
The goal is financial strangulation
According to the minister, the SPA has identified illegal websites and notified Anatel so they can be blocked. From there, the government investigates the operators, who used 37 fintechs for financial transactions. “We are communicating with the federal police, Public Prosecutor’s offices, COAF (Council for Financial Activities Control) and the Federal Revenue Service so they can act against these illegal operations,” commented Durigan.
“This measure decisively strengthens the Brazilian state’s capacity to confront illegal operators. Those who operate outside the law cannot continue using the financial system to sustain clandestine businesses. By blocking the flow of funds in unauthorised betting operations, the regulation targets the economic core of illicit activities, reduces incentives for illegality and reinforces the government’s commitment to serious, effective regulation guided by the public interest,” he emphasised.
Zero tolerance for illegal betting
The goal is to block fintech companies, order them to suspend operations and then seek the expropriation of their assets. Expropriated funds will go to the National Public Security Fund. The minister reiterated his zero-tolerance policy against illegal betting and a stricter approach to financial transactions from clandestine operations.
Wellington César Lima e Silva, minister of justice, stated that there is a consensus that organised crime has incentives to migrate to the illegal betting sector. “It is essential that the government act strongly against this,” he affirmed.
The decree signed by President Lula, according to Wellington, “is a major step against illegal betting”. The action will involve an initial step by the SPA (Special Secretariat for Social Action) and the Ministry of Justice will follow up on the processes, he said.
According to Wellington, the first step is to cut off the oxygen supply to criminal organisations through financial asphyxiation.
