Combating the illegal betting market is urgent and cannot be postponed.

The public debate about the betting sector in Brazil, and its economic and social consequences, is deeply clouded by the lack of differentiation between the regulated and illegal markets. The difference between the two worlds is profound – and urgently needs to be understood by authorities, the press, and public opinion. It is necessary to clarify the debate and take firmer measures to curb the illegal market – this is the true threat to Brazilian society, the economy, and sport.

Brazil is experiencing a decisive moment in the regulation of online sports betting. The legalization of this market, with the enactment of Law 14.790/2023 and the publication of its first regulatory ordinances, was an important step towards providing mechanisms to protect individuals, ensure legal certainty, and generate tax revenue. But regulation alone is not enough: firm action is needed to curb illegality.

A study conducted by LCA and the Locomotiva Institute estimates that the illegal market accounts for 51%. This means that, for every R$10 wagered in Brazil, R$5 is done on platforms that are not authorized to operate. Why this matters: unlike regulated platforms, which comply with strict rules imposed by legal regulations, the illegal market operates on the fringes of the law, without any commitment to prohibiting access by minors, preventing addiction, or ensuring sporting integrity.

From the perspective of protecting people, legitimate gambling sites comply with regulations and implement rigorous control mechanisms, such as facial recognition and the collection of identity documents, thus preventing minors from using the platforms. The same does not happen in the illegal market, where children and teenagers continue to gamble.

Legal operators, such as Betano, also comply with the law and have responsible gambling policies, including self-exclusion tools, self-limitation, voluntary blocking, and alerts about risky behavior. The same does not happen in the illegal market, which not only ignores these mechanisms but often encourages compulsive use with aggressive offers and misleading promises.

From an economic standpoint, the contrast is equally striking. Authorized operators contribute through taxes on gross revenue (GGR), inspection fees, and concession payments. The government itself reported that betting sites have already contributed R$ 3 billion in taxes between January and May. More than R$ 2 billion was paid in concessions. Legal betting sites generate jobs, hire suppliers, sponsor clubs and social projects. Illegal platforms, on the other hand, evade taxes, divert resources, and generate unfair competition. The study by LCA and Locomotiva estimates that R$ 10 billion per year is being lost to government coffers.

The integrity of the sport is also at stake. Legitimate companies use anti-fraud tools and report suspected match-fixing to the authorities. High-profile cases of potential match-fixing involving Brazilian players originated from complaints filed by the betting companies themselves (which, incidentally, are victims of match-fixing attempts; they lose money when this happens). In the illegal environment, there is no control whatsoever – and it is precisely there that match-fixing flourishes, threatening the credibility of competitions and the spirit of the sport.

Legal betting sites return at least 85% of the wagered amount to bettors and have auditable algorithms. Illegal sites can keep all of the bettors' money. Legal betting sites are required to have strict anti-money laundering mechanisms and to report suspicions to the COAF (Council for Financial Activities Control). Illegal betting sites are often created precisely to launder money from organized crime.

We need to act on multiple fronts: suffocating payment institutions that operate for the illegal market; effectively blocking illegal websites and applications; toughening penalties for companies and intermediaries that operate without a license; awareness campaigns to guide consumers; coordination with digital platforms to curb irregular advertising, among others.

The legal market, to which Betano proudly belongs, does not fear regulation – on the contrary: it defends it, promotes it, and works to improve it. But without effectively combating the illegal market, any regulatory effort will be insufficient, and the return of prohibition would only push all bettors back into illegal betting. The Brazilian consumer, the sport, and the public treasury deserve an honest, responsible, and competitive environment. The time to act is now.

(*) Fernando Gallo is the Director of Public Policy at Betano in Brazil. The article was published on UOL Notícias.

Photo: Press release/Betano