Some five-months after the market was regulated, illegal betting continues to dominate Brazil’s sports gambling industry, costing the federal government an estimated R$10.8 billion (£1.4bn/US$1.95bn) annually in lost tax revenue.
According to a new poll by the Locomotiva Institute, and a study on the size of the clandestine market by LCA Economic Consultancy, seven out of 10 Brazilian bettors are using illegal betting platforms – often unknowingly, due to the difficulty they have in distinguishing between legal and unregulated sites.
And operator lobbies say this highlights serious flaws in government oversight and enforcement.
The findings were presented last week at the headquarters of the Brazilian Institute for Responsible Gaming (IBJR) in Sao Paulo, which represents leading betting operators.
Alarming
The most alarming takeaway is that the majority of bettors cannot clearly identify whether a platform is legal or not.
The survey polled 2,000 Brazilians who have placed sports bets this year, since it was legalised and regulated on January 1.
And it revealed the following:
73 percent of punters had used at least one illegal betting platform, 46 percent had placed money on a site they later discovered was unregulated, 78 percent said it is difficult to know which sites are officially authorised, 72 percent said they cannot always check a platform’s legitimacy before betting, 62 percent used sites that did not require mandatory facial recognition, 44 percent deposited money using a credit card and 28 percent used used cryptocurrencies for deposits.
Weak Enforcement
Under Brazilian law, facial recognition is a required verification step for legal platforms. And the use of credit cards and cryptocurrencies for gambling is strictly prohibited; yet their widespread use indicates weak enforcement.
Based on the survey data, the IBJR estimates that between some half of all available betting sites in Brazil–between 41 percent and 51 percent–are illegal operations.
“The progress in regulation has yet to deliver real-world benefits,” charged IBJR Executive Director Fernando Vieira.
“That’s because a significant share of betting still occurs outside the law. These findings confirm what the industry has warned for months. Without effective, ongoing oversight, regulation is just words on paper.”
Vieira emphasized the need for joint action from regulators, betting companies, and civil society to dismantle Brazil’s illegal betting ecosystem.
“While public debate focuses on tax hikes and advertising restrictions, the illegal market continues to operate freely,” he asserted.
“If Brazil truly wants to reap the social and economic benefits of legalized betting, cracking down on illegal operations must be a top priority.”
