According to Plínio Lemos Jorge, head of the National Association of Games and Lotteries (ANJL), if the illicit market isn’t adequately addressed, legitimate operators may decide to leave Brazil.
The head of Brazil’s Secretariat of Prizes and Bets (SPA), Regis Dudena, said last week that 71 operators had their license applications accepted. The BRL30 million (£3.9 million, €4.7 million, or $4.9 million) concession fee has already been paid by 16 betting businesses.
The legal market is scheduled to open on January 1, 2025, but the threat of illegal operators is still present little over two weeks before that day.
Could licensees be forced to leave due to illegitimate competition?
More than 2,000 illicit websites are still up and running in Brazil, according to a recent ANJL report. The National Telecommunications Agency (Anatel) chief, Carlos Baigorri, has cautioned that the agency’s efforts to restrict these operators are like “mopping up ice.”
Lemos Jorge believes that licensed operators may stop placing bets in Brazil if the country cannot come up with a more efficient approach to crack down on the illicit market. He cautioned that this might increase unlawful competitors.
“If the illegal market is not effectively combated, there is a risk,” Lemos Jorge told UOL Apostas. “Those who are already here may definitely leave the country if investors determine that the market conditions are not favorable to the expected returns.”
In terms of player protection, the growth of illicit operators may have extremely negative effects.
According to Lemos Jorge, “illegal websites have a negative impact on the industry and society in general in a number of ways.” Since these platforms won’t collect taxes or bear the costs of the entire structure required for installation and operation in Brazil, the primary issue is predatory and unfair competition. “Furthermore, these are companies that wish to remain underground, without any concern for the well-being and health of bettors or the protection of children and adolescents.”
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In Brazil, what steps may be taken by ANJL?
Baigorri, the head of Anatel, demanded that the organization be granted more authority to support its site blocking initiatives. To further their cooperation, it and the SPA inked a cooperation agreement last week.
Anatel and the ANJL met last week to talk about potential next steps. In the upcoming weeks, such recommendations should be made public.
Lemos Jorge believes Anatel needs more authority in order to improve the efficacy of its blocking efforts, stating: “It will be necessary to give Anatel greater autonomy to block.” This independence ought to be granted by a particular statute.
The blocking procedure will go much more quickly with Anatel’s increased independence. The blockage will be implemented as soon as Anatel detects the illicit website and learns about it, preventing the site from remaining operational for very long and costing bettors money.
Blocking payments is a viable substitute.
Some in the business have pointed out that payment blocking is a more effective way to fight the black market because Anatel finds it difficult to guarantee that all unlawful websites are taken down.
Hugo Baungartner, CCO of Aposta Ganha, previously informed iGB that payment blocking was the “only way” to stop unlawful operators. He said that site removal was useless since unlicensed domains appeared nearly as rapidly as they were removed.
Pix is a Central Bank-regulated quick payment system that has gained widespread use in Brazil’s gaming sector because it can complete transactions in less than ten seconds.
Payments sent to illegal operators through Pix will be prohibited in accordance with Brazil’s new betting legislation.
Lemos Jorge, head of ANJL, concurs that a major component of the government’s plan to combat illicit businesses would be payment blocking.
Combating the payment mechanisms that enable the unlawful sites to function is crucial, Lemos Jorge continued.
Since the law states that any financial institution that consents to run transfers to illicit platforms that are not permitted by the federal government to function in Brazil would likewise be breaking the law, they must also be involved in this battle.
Lemos Jorge continues to believe in betting on Brazil.
Lemos Jorge is certain that the rules established by the SPA will guarantee a secure betting environment in Brazil, even in light of the continuous worries about illicit operators.
According to Lemos Jorge, “the regulatory framework detailed by the SPA through the publication of various ordinances and approved by the national congress through Law 14,790/2023 is one of the most rigorous and complete in the world.” The industry as a whole agrees on this.
“Nonetheless, a robust supervision mechanism that functions in reality is required. Through the efforts of several stakeholders, both public and private, we are sure that Brazil will achieve this. To prevent or at least drastically cut down on unlawful betting, this team effort will be crucial”
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