Brazil faces legal battles over betting regulations

Sudhanshu Ranjan October 21, 2024

Brazil is in the midst of a heated legal battle over its betting regulations. The release of an approved list of operators by the country’s Department of Prizes and Betting (SPA) has triggered a wave of lawsuits from companies excluded from this exclusive group. As Brazil gears up for a fully licensed gambling market set to launch on 1 January 2025, these legal battles have exposed deep divisions within the industry.

SPA’s crackdown on illegal betting sites

The SPA published its long-awaited list in early October 2024, effectively giving the green light to 96 companies and 210 affiliated brands to continue operating in Brazil’s gambling space. This list is crucial as it marks a step towards fully regulating the market in 2025.

Brazil’s gambling regulation efforts are part of a broader government strategy to weed out illegal operators. The SPA has enlisted the help of the National Telecommunications Agency (Anatel) to block access to over 2,000 illegal betting websites, including well-known platforms like Betfred and BoyleSports. Anatel’s actions represent a serious crackdown on unlicensed gambling, reflecting the government’s commitment to creating a safer, more regulated betting environment.

Legal backlash from excluded companies

Several operators not included in the approved list have already taken legal action against the Ministry of Finance, igniting a complex legal battle over the legitimacy of the SPA’s decisions.

One of the most high-profile cases comes from Zeroumbet, a platform owned by lawyer and social media influencer Deolane Bezerra. Zeroumbet was excluded from the list due to an ongoing investigation into illegal gambling and money laundering, part of operation integration.

Zeroumbet filed for a federal betting licence in August 2024, but their application was denied due to Bezerra’s legal troubles. The company contends that the SPA’s decision unfairly impacts their operations, claiming that only Bezerra should be held accountable. However, the SPA has remained firm, stating that Zeroumbet’s exclusion protects public interest and maintains the integrity of the betting system.

Loopholes in the system

Some companies, like Esportes da Sorte, have found alternative ways to stay in the market. Although excluded from the federal list, Esportes da Sorte obtained authorisation from Rio de Janeiro’s state lottery regulator, Loterj, by acquiring shares in a Loterj-licensed company, ST Soft. This strategic move has allowed them to continue operations at the state level, despite being shut out of federal approval. However, this has caused friction between state and federal authorities.

Adding fuel to the fire, a recent report by Brazil’s Central Bank revealed that $528 million was transferred to betting platforms by people covered by the Bolsa Família welfare programme in August alone. This has intensified public scrutiny, especially regarding the unregulated platforms still operating in the country. The upcoming full regulation of Brazil’s betting market in 2025 is meant to create a fair, transparent environment for operators and bettors alike. However, the wave of lawsuits and the complex relationship between state and federal regulations indicate that more challenges lie ahead.

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