Brazil has introduced a new enforcement framework aimed at disrupting the financial infrastructure of illegal online betting operators, giving authorities the power to freeze accounts linked to unlicensed gambling activity and redirect seized funds to public security efforts.
The measure was formalised through a decree signed by President Luiz Inácio Lula da Silva on 19 June, establishing a structured process for identifying, blocking and ultimately confiscating funds associated with illegal betting platforms. It marks a shift in enforcement strategy away from website blocking toward direct intervention in payment flows.
Under the new rules, funds recovered from illegal operators may be transferred to the National Public Security Fund following legal review. The government said the intention is to weaken the financial base of organised crime networks connected to unregulated gambling.
Expanded authority for financial monitoring
The Secretariat of Prizes and Betting (SPA) within the Finance Ministry has been assigned a central role in identifying unauthorised operators. Once an illegal activity is confirmed, banks and payment institutions must freeze related accounts within 24 hours and prevent further transactions linked to those entities.
Financial institutions are then required to confirm compliance within 48 hours. The Central Bank will oversee the execution of these measures and receive notifications of each enforcement action.
The process is designed to ensure rapid intervention once an operator is flagged, with the aim of limiting the movement of funds through digital payment systems. Authorities may initiate action based on monitoring activities, formal complaints, or evidence of electronic fraud.
A parallel regulatory order also establishes joint liability for banks, fintechs and payment providers if they continue processing transactions for illegal operators after receiving official notification. These institutions may be held responsible for unpaid taxes linked to those activities.
The decree operates under Article 21-A of Brazil’s fixed-odds betting legislation, introduced through the Anti-Faction Law. It expands enforcement beyond digital takedown measures by targeting the financial channels that sustain illegal betting operations.
Authorities are required to provide detailed documentation identifying the operator, associated platforms, and evidence supporting the account freeze request. While accounts may be restricted without prior warning, affected parties must later be notified and given access to legal defence procedures.
The National Public Security Secretariat is responsible for initiating administrative forfeiture proceedings. Operators have 15 days to contest the measures, although final asset confiscation requires a court decision following action by the Attorney General’s Office.
The decree also clarifies that forfeiture processes cannot interfere with payments owed to bettors, ensuring that legitimate claims are not affected by enforcement actions.
Central Bank coordination and system development
To support implementation, the Central Bank and the Finance Ministry have been given 90 days to establish a secure electronic notification system for enforcement actions. Until this system is operational, communication will take place through existing federal digital channels.
Authorities say the framework is intended to improve coordination between financial regulators, law enforcement agencies and tax authorities. Information gathered during investigations may also be shared with police and prosecutors for broader criminal proceedings.
Brazilian officials estimate that tens of thousands of websites linked to illegal betting have already been targeted through enforcement requests made to the national telecom regulator. Nearly 50,000 domains and around 350 operators have reportedly been identified for blocking or investigation since 2025.
Government data suggests a significant portion of the country’s betting activity still occurs outside licensed channels, with estimates placing the share of unregulated market activity at between 41% and 51%. Authorities argue that this grey market reduces tax revenue and increases exposure to financial crime risks.
Policy shift toward payment system enforcement
The new framework reflects a broader shift in regulatory strategy, focusing on the financial infrastructure rather than attempting to eliminate illegal websites individually. Officials argue that operators frequently reappear under new domains, limiting the effectiveness of blocking measures alone.
According to Reuters, Finance Minister Dario Durigan described the approach as a form of financial containment, designed to restrict access to the banking system for unlicensed operators. He also linked the policy to broader anti-crime efforts, stating that recovered funds would support public security initiatives.
The government has positioned the decree as part of a wider effort to strengthen oversight of digital financial activity, particularly in sectors linked to gambling and online payments. It builds on earlier regulatory actions targeting illegal advertising, domain blocking and prediction market restrictions.
Officials say the effectiveness of the new framework will depend on coordination between regulators, financial institutions and enforcement agencies, particularly as illegal operators continue to adapt their methods.