Brazil Watchdog Flags AML Gaps as Banks Target Illegal Bets
Brazil’s Federal Court of Auditors warned on Tuesday that weak coordination between federal agencies undermines control of illegal betting and creates money laundering exposure. The audit arrived on the same day the Central Bank published new rules that oblige financial institutions to flag suspected illegal operators via the same fraud marker system that tracks Pix scams.
Systemic Failures at the Top
The TCU cited “systemic deficiencies” in the operational capacity of the Ministry of Finance’s Prizes and Bets Secretariat. It said the Ministry of Finance, Central Bank, Coaf, Federal Police, Anatel, Federal Revenue, and consumer bodies act with weak coordination.
That gap matters because illegal sites can return fast after domain blocks. According to the audit, operators change electronic addresses and use structures hosted abroad.
The illegal market moves between R$26 billion and R$40 billion per year, according to an LCA study commissioned by the Brazilian Institute of Responsible Gaming and reviewed by the TCU. That equals 41% to 51% of Brazil’s total betting market.
New Central Bank Rules
The Central Bank rules, published Tuesday, require financial institutions to report on players who deposit money with illegal sites and companies that process those payments. Entries will use the same fraud marker system that flags Pix scams. The records will stay confidential under Brazil’s General Data Protection Law.
Financial institutions have until October 30 to extend oversight to transactions from illegal operators that use crypto assets. Full transaction oversight must be in place by December 1.
What TCU Recommends
The TCU urged the Prizes and Bets Secretariat to create a permanent coordination mechanism with Anatel, the Central Bank, Coaf, and Federal Revenue. It also recommended automated tools to detect illegal websites and apps, formal links between Sigap and Anatel’s domain block infrastructure, and tougher penalties for banks and payment companies that support illegal betting.
Anatel said it took down more than 39 unauthorized betting addresses last year. Brazil currently has 85 authorized CNPJs, with each able to operate up to three betting sites. Licensed sites use the .bet.br domain.
Finance Minister Dario Durigan said on April 24 that Brazil has clear rules for fixed-odds betting and that “there will be no room” for companies that operate outside the system or create structures to avoid the law.
TGJ Take
Brazil’s illegal betting fight now shifts from domain blocks to financial pressure. That is the right target. Operators can relaunch sites faster than Anatel can block them, but payment rails leave a trail. For licensed operators, stronger bank-level checks should help protect tax-paid market share. For payment firms, December 1 is the real compliance deadline.
