YouTube profits from advertising illegal gambling websites.

YouTube, the world's largest video platform, has been profiting from the promotion of illegal online gambling sites in Brazil, despite the ban on these companies advertising in the country and an agreement signed with the Brazilian government to remove content, reveals a report by Folha de S.Paulo this Sunday (13).

Some of the betting companies that advertise on the platform are even listed by Anatel (National Telecommunications Agency) as irregular and without authorization to operate in the country.

When contacted, YouTube stated that the content reported by Folha is under review and that, since September 2024, it has updated its publishing policies.

The advertising on YouTube is targeted at users who have searched for gambling videos. The report found that the platform displays ads for illegal websites, featuring the so-called "tiger game" or similar games, for every three videos suggested.

It's easy to identify the illegal companies. Some of them promise cash bonuses upon registration, which is prohibited by Brazilian law. None of them have the "bet.br" domain, which is exclusive to those licensed in Brazil.

By clicking on the advertisement, the user enters a virtual store and an application is installed on their cell phone, which redirects to the illegal website and allows betting. Registration only requires a phone number and password. There is no requirement for the bettor to identify themselves or prove their age.

Some illegal websites have still managed to bypass blocks on online stores—where they are commonly listed as "free to all ages," in violation of the prohibition for those under 18.

Brazilian law stipulates that companies must pay a fee of R$ 30 million to the federal government and commit to a series of rules (such as anti-money laundering policies) in order to operate and advertise in Brazil. Furthermore, they must pay taxes to the federal government on their profits, which is not the case for unauthorized betting sites.

The apps found by Folha are registered by companies in Hong Kong, as are the advertisers on YouTube, despite claiming to have a license obtained in Curaçao, a Caribbean island that is home to the registration of several betting companies operating worldwide.

One way to evade oversight is by launching new illegal websites when previous addresses are taken down by authorities. Since the main goal is to commit fraud, there's no expectation of customer loyalty, and the websites are registered with variations of numbers and generic acronyms.

On social media, users are reporting scams involving illegal betting sites, either because they are unable to withdraw deposited money or because viruses are installed on their devices when accessing the platforms.

There's a high turnover rate, and it's difficult to determine exactly how many operate illegally while also advertising.

One of the apps identified by the report, for example, is from a supposed developer called Ballet Lyn, launched on March 31, 2025. It redirects to 666bet.com, which has been blocked in Brazil since October. Another, from a developer named Naftalielijah, was added to app stores this month.

YouTube, which is owned by Google, receives money for publishing each of these ads. The amounts and reach are not disclosed.

Advertising unlicensed websites in Brazil is illegal and can result in fines ranging from R$ 50 to R$ 2 billion, as explained by lawyer Luiz Felipe Maia, who works in the sector. "This requires an administrative process, which must be initiated by the Prizes and Betting Secretariat of the Ministry of Finance," he said.

The lawyer points out that the Brazilian Internet Bill of Rights protects platforms from the dissemination of illegal content by users, but the company can be punished for the advertisements it broadcasts.

“You advertised and are being paid for it. If the content is repeated, it should have a stronger KYC ['know your customer'],” Maia commented.

YouTube states that, in order to advertise, it is necessary to agree to these policies, have an active license from the Ministry of Finance, and prior certification from Google Ads. "When we identify a violation, we act immediately by suspending the ad and, if necessary, blocking the advertiser's account," the company said.

The SPA (Secretariat of Prizes and Betting) stated that YouTube has strengthened its rules for content removal after meetings with the agency. The agency emphasized that it is working jointly with CONAR (National Council for Advertising Self-Regulation) and the Digital Council, which represents large technology companies, to combat illegal advertising.

"It is also important to highlight that SPA has already managed, together with Anatel, to block more than 11 illegal websites," the statement said.

In March, YouTube mandated the removal of user-generated live streams containing gambling content that violates the law. Giovanni Rocco, National Secretary of Sports Betting and Economic Development of Sport at the Ministry of Sport, says the company is out of sync with the legislation and demands that it adjust quickly.

"YouTube is monitoring live streams, but at the same time it advertises illegal betting sites and makes money from it," he says.

The president of ANJL (National Association of Legal Gambling), Plínio Lemos Jorge, says that the organization has been informing regulatory bodies about the addresses of illegal websites.

“But this is a vast, highly technological clandestine network that daily develops new mechanisms to circumvent the regulated betting market. Therefore, the participation of the Federal Police in the investigations is becoming increasingly important,” he said.

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Understand how online casinos and the 'tiger game' were legalized in Brazil.
A member of parliament included a provision for 'online gambling' in a bill on sports betting, which legalized virtual casinos.

Online betting sites, including virtual casinos or the famous 'tiger game', have exploded in Brazil in recent years. Legalization occurred amidst the processing of a bill that dealt only with sports betting, but the National Congress absorbed the lobbying efforts of betting companies, reveals another report from Folha de S.Paulo.

Today, there are over 150 legal online betting sites in Brazil, offering a variety of games.

But when the government started designing the regulation of betting, the debate in Brazil was only about the legalization of so-called fixed-odds betting—a category where the prize that can be won is known at the time of betting—related to sporting events.

As Folha showed, the loophole for virtual casinos and games like "tigrinho" appeared during the passage of the text in the Chamber of Deputies.

THE BEGINNING

Fixed-odds sports betting was first legalized in Brazil at the end of Michel Temer's (MDB) government in 2018, also through an agreement in Congress.

The law legalized betting and stipulated the regulation of the sector by 2022. However, the government of Jair Bolsonaro (PL) never moved forward with this agenda.

Thus, sports betting exploded in Brazil in a gray area of ​​legislation: without any type of oversight, accountability, taxation, or requirements for the operation of this sector.

These companies operated from headquarters in tax havens, moving money through institutions outside the country. The lack of regulation also allowed these sites to offer virtual casinos, gambling, and similar services.

Unlike sports betting, where results are linked to real-life events, online casinos rely on algorithms defined by the betting site itself. As a result, this category of games has become responsible for the largest profits of these sites.

NEW BEGINNING

At the beginning of Lula's (PT) government, in 2023, the Ministry of Finance sent a bill to Congress to finally regulate the market. The main argument was that there was a law requiring regulation and the area had the potential to generate billions in revenue for the federal government.

This bill began its legislative process under the rapporteurship of Representative Adolfo Viana (PSDB-BA). It was this representative who included the provision for "online games" in the text, a category that encompasses virtual casinos.

"When I received the report, I spoke with representatives from the sector, who presented the situation that 70% of the betting companies' revenue came from online games. We added the provision, thinking about the attractiveness of the market," the congressman told Folha.

WHAT THE SECTOR SAYS

Entities representing the sector argue that these modalities already existed before regulation and that their inclusion in the law was not only a demand from companies, but also from bettors.

“We see this as progress for everyone. Online games have always existed and have always been used by Brazilians. The difference is that, with the law, it is possible to regulate, monitor and tax them,” says the National Association of Games and Lotteries.

It is estimated that more than half of the revenue from betting companies comes from activities other than sports betting.

"This measure ensures a safer, more sustainable and healthier game, something that did not happen before the law," the institution argues.

The Brazilian Institute for Responsible Gaming, which claims to represent 75% of the online gaming market in the country, follows the same reasoning.

"Restricting this operation is a risk to be avoided, as it would allow illegal companies with no commitment to responsible gambling to meet this demand," the institution states.

PROCESSING

During the bill's passage through Congress, amendments were introduced both to block "online gambling" and to expand the legalization to physical casinos—an issue that is currently progressing through another legislative proposal.

The Senate initially restricted the legalization of online casinos, only including sports betting. However, when the bill returned to the Chamber of Deputies, the original provision was reinstated.

“Betting already existed, but from tax havens. What company would want to come to Brazil if it were going to lose 70% of its revenue and face five times higher taxation? The law didn't create anything new, it only regulated,” said Adolfo Viana in his report.

The proposal was finally approved, after months of debate, at the end of 2023, with the provision that legalized online gaming. Lula signed it into law on the last day of that year.

EFFECTS AND REGULATION

As a 2023 Datafolha survey showed, 15% of the population already claimed to engage in gambling, with a predominantly young audience, including beneficiaries of the Bolsa Família program.

Brazilians allocated up to R$ 30 billion per month to betting on Brazil in the first quarter of 2025, according to information from the Central Bank.

Throughout 2024, the Ministry of Finance worked on regulating the sector, which included rules for granting licenses, as well as mechanisms to control gambling addiction and advertising. Since January 1, 2025, only companies authorized by the Ministry of Finance can legally offer gambling in Brazil.

When contacted, the Ministry of Finance stated that Congress is sovereign in its decisions.

"The regulated fixed-odds betting market, whether for sporting events or online games, provides greater security for Brazilian citizens who choose this form of leisure," the ministry said in a statement.

"It will also be an important tool in combating money laundering through gambling."