The Brazilian government has banned online sports betting and casinos across the country. The provisional measure, published on September 25, prohibits the operation, offering, intermediation, and advertising of this type of betting, known as fixed-odds betting.
The measure took immediate effect upon publication in the Diário Oficial da União. From that moment, new deposits were blocked, and users have until October 5 to withdraw their balances. The National Congress has a maximum of 120 days to approve the regulation permanently.
Fixed-odds betting was legalized in Brazil in 2018 and regulated in 2023 under Law No. 14,790, which established an authorization regime and obligations for operators. The government justifies the ban on the grounds of the impact of online gambling on household debt, addiction-related problems, and minors’ access to gambling.
A BRL 37 Billion Market on Hold
In 2025, the regulated betting market generated approximately BRL 37 billion in gross gaming revenue (GGR), according to data from the Secretariat of Prizes and Betting (SPA) at the Ministry of Finance. That year, 79 licensed companies were operating, and 25.2 million Brazilians placed at least one bet.
The ban also affects public revenue, which averaged around BRL 800 million per month from the sector, as well as operators that paid BRL 30 million for five-year licenses. IBJR has indicated that companies are considering taking legal action to recover the value of those licenses and their investments. The impact also extends to related sectors such as football, whose leading clubs received BRL 1.1 billion in sponsorships from betting companies in 2025.
The Risks the Ban and Regulation Aim to Contain
The goals the Government has cited to justify the ban are the same risks every gambling regulator seeks to contain.
The difficulty is that demand for betting rarely disappears with a ban. Brazil has its own example in the jogo do bicho, an underground lottery that has been illegal since the 1940s and is still present across the country. This is why many online gambling frameworks rely on the principle of channelization, which keeps the activity within an authorized environment where it is possible to know who is betting and to control how they do it.
The Brazilian model followed that logic. Operators had to verify each bettor’s identity using their CPF and facial recognition before opening an account, prevent minors from registering and check that the person did not appear on self-exclusion lists. Deposits could only be made from a bank account in the bettor’s own name, with no credit cards or third-party payments, and unusual transactions had to be reported to COAF, the country’s financial intelligence unit.
For operators, these requirements went beyond a simple sign-up step. Effective age verification requires confirming that the document is authentic, that it belongs to the person registering and that this person is present at the time of verification through a liveness check. This prevents a minor from using an adult’s document or image to open an account.
If some bettors move to unauthorized platforms, these controls no longer apply to them. That is the balance Congress will have to weigh over the next 120 days, between the protection the ban seeks to provide and the risk that part of the activity ends up outside the regulated perimeter.
If the measure is amended or the market reopens in the future, it will likely do so with identity requirements that are equal to or stricter than the previous ones. In that scenario, operators seeking to enter the market would need to show from day one that they control who accesses their platform and can prove it to the regulator.
How the Transition Affects the Financial Sector
The ban creates two scenarios that unfold over time, combining fraud and regulatory compliance risks.
Identity Impersonation During Balance Withdrawals
Until October 5, licensed operators are transferring balances through legitimate channels. A fixed deadline and a large number of users awaiting refunds create the typical context for social engineering campaigns. Messages, websites, and profiles impersonating betting operators can be expected to seek credentials or banking details under the pretext of speeding up the refund process, a common precursor to account takeover.
Mule Accounts After the Legal Market Closes
If operators continue to run their business illegally, they will need accounts at banks and fintechs to collect bets. This is the logic of money mule accounts, one of the best-known money laundering typologies: accounts opened with stolen or synthetic identities, or lent out by their holders in exchange for a fee, which receive funds from many sources and move them on quickly to make them harder to trace. For the institution, this creates two risks.
- It has customers who are not who they claim to be.
- It channels funds from an illegal activity, which exposes it to penalties if it fails to detect and report those transactions to COAF.
An Open Regulatory Framework
While the provisional measure has not yet become law, operators and financial institutions will be working under rules that may change again. In this context, a compliance-by-design approach becomes increasingly important, with controls that can adapt to regulatory changes without requiring every process to be redesigned.
Whatever the outcome of the legislative process, the case of Brazil shows how a regulatory change in one sector can have implications for risk management in another. For financial institutions across the region, anticipating this spillover is part of the prevention effort.
