Follow the Money: regulation of betting and prevention of money laundering.
When it comes to preventing money laundering, one of the concepts best known to law enforcement authorities is simple: "Follow the Money."
Money laundering aims to conceal or disguise the illicit origin of funds, allowing them to return to the economy with an appearance of legitimacy. Therefore, one of the most sensitive moments is the so-called placement , when the criminal attempts to introduce these funds into the formal economic system.
From this perspective, the Brazilian model for regulating fixed-odds betting deserves attention.
The narrative that betting constitutes, by its very nature, an environment particularly conducive to money laundering needs to be analyzed in light of the reality of the legal and regulated market.
Law No. 14.790/2023 and the regulations of the Secretariat of Prizes and Bets of the Ministry of Finance have built an architecture of identification, control, and traceability that significantly hinders various traditional forms of money laundering. Ordinance SPA/MF No. 1.143/2024, for example, established specific policies, procedures, and controls for the prevention of money laundering and the financing of terrorism for operators.
The money doesn't come in anonymously.
One of the most important characteristics of the Brazilian model is the way resources reach the platform.
The betting operator is not a bank. Financial transactions depend on institutions that are part of the financial system and subject to the respective regulations.
Furthermore, the bettor must be identified, including through facial recognition mechanisms, and use a bank or payment account in their own name. The regulated market also does not allow cash and establishes strong restrictions on the use of funds from third parties.
In simplified terms:
IDENTIFIED FINANCIAL ACCOUNT → IDENTIFIED BETTOR → GRAPHIC ACCOUNT → BET → WITHDRAWAL/PRIZE → IDENTIFIED FINANCIAL ACCOUNT
This creates a fundamental difference compared to activities in which anonymous or in-kind resources can be introduced directly.
It is important, however, to make a caveat: access to banking services does not mean legality.
Funds originating from a bank account may have a criminal origin. However, their passage through the financial system signifies something extremely relevant for money laundering: traceability.
Two layers of control
Before reaching the betting site, the money has already passed through a financial or payment institution subject to its own KYC controls, monitoring, and anti-money laundering procedures.
Upon joining the regulated platform, you encounter a second layer of control.
And these layers are not redundant.
The bank can monitor financial transactions. The operator can add information that the bank doesn't normally have: the betting behavior of that client.
Imagine someone transferring R$ 200 to a platform.
The operator can verify how much was actually wagered, in which markets, with what odds, the total volume wagered, how much the client won or lost, and how long after the withdrawal was requested.
A customer who deposits R$ 200, bets only R$ 5, and immediately tries to withdraw R$ 195 exhibits very different behavior from that of a bettor whose activity is consistent with their history.
That's precisely where the operator also becomes an important agent of financial intelligence.
a practical example
Imagine an individual with R$ 500 obtained through criminal activity, but who has already managed to introduce these funds into the financial system.
He transfers R$ 500 to a regulated platform, places bets, and later withdraws R$ 470.
It would be tempting to simply state that he "laundered R$ 470 through betting."
But the analysis is more complex.
The money left an identified account, went into the same individual's betting account, the bets were recorded, as were their results, and the withdrawal was returned to an identified financial account.
In other words, in addition to losing R$ 30, the individual left behind an extensive digital trail.
This does not make money laundering impossible, but it demonstrates that a regulated platform is not necessarily an efficient mechanism for concealing the origin of funds.
The risks still exist.
This does not mean zero risk.
There are certain types of behavior that deserve attention: using the platform as a mere transit account; using straw men; identity fraud; coordinated betting; transactions incompatible with the bettor's economic profile; and situations related to the manipulation of sporting competitions.
Therefore, a robust AML (Anti-Money Laundering) structure within operators is not merely regulatory bureaucracy.
She is essential.
But perhaps it's necessary to understand its function better.
A regulated betting site is not just a potential point of vulnerability. It's also a new point of observation.
The bank may ask:
Where did the money come from and where did it go?
The operator adds:
What did the customer do with that money while it was on the platform?
This combination significantly increases the ability to identify suspicious behavior.
Regulation transforms data into control.
The Brazilian model also mandates the maintenance of data on bettors and their transactions, as well as the submission of standardized information to SPA.
This allows us to reconstruct a chain that is extremely relevant to the Follow the Money principle :
who bet → Where did the money come from? → how much did you deposit? → what did you bet on → how much did it move? → how much did you win or lose → how much did he withdraw → where the resource returned to.
The Brazilian Federal Court of Accounts itself, when analyzing money laundering prevention in the sector, acknowledged the existence of a robust regulatory framework, although it pointed to the need to strengthen the state's capacity to monitor and utilize this data.
This is an important point.
The next stage of regulation may not depend solely on creating new obligations, but on the ability to transform the vast amount of information already available into intelligence , integrating operators, SPA, COAF, the Central Bank, the Federal Revenue Service, and criminal prosecution agencies.
The biggest challenge lies outside the regulated market.
All of this architecture has one basic condition: the bet must take place within a regulated environment.
When a consumer uses an illegal platform, there is no guarantee of KYC (Know Your Customer), account ownership, information storage, monitoring, reporting of suspicious transactions, SPA (Single Platform Administrator) supervision, or state access to the systems.
Therefore, combating the illegal market is not just a matter of competition or taxation.
It is also a public policy for preventing money laundering.
The greater the participation of the regulated market, the greater the share of bets placed in an identified, monitored, and traceable environment.
Conversely, measures that excessively weaken the legal market and encourage consumers to migrate to clandestine platforms can produce an unintended consequence: reducing the State's ability to follow the money.
Regulation doesn't eliminate risk. It makes risk visible.
No significant economic activity has zero risk of money laundering. The financial system doesn't, the real estate market doesn't, and neither does the betting industry.
Therefore, the correct question is not simply:
"Is it possible to launder money through gambling?"
Criminals will try to exploit different sectors of the economy.
The most important question is:
"In which environment is the State best positioned to identify, track, and investigate these attempts?"
There is a substantial difference between a bet placed on an authorized platform, with bettor identification, linked financial account, betting history, state monitoring and supervision, and one placed on a clandestine platform.
Brazilian regulation deserves recognition for having built these barriers.
It is necessary to continue improving controls, investing in technology and intelligence, and strengthening integration between authorities and operators.
But it is equally necessary to eliminate or drastically reduce the space occupied by the illegal market.
Because, in the end, we return to the principle that started this reflection:
Follow the Money.
To follow the money, you first need to be able to see it.
And perhaps one of the greatest virtues of Brazilian regulation is precisely this: transforming fixed-odds betting into an activity that is identified, monitored, traceable, and subject to state control.
(*) Waldir Marques Jr. works in institutional and strategic relations for the betting and iGaming sector. He is currently the Director of Relationships at Todos Querem Jogar, participating in initiatives focused on institutional development, sectoral dialogue, and strengthening the regulated market in Brazil.
