Brazil will launch a new department to restrict payments to illegal gambling operators ahead of the launch of their regulated betting market. [Image: Shutterstock.com]

Brazil to stop illegal payments

Brazil will set up a dedicated civil service team to prevent illegal gambling operators from taking payments, according to the director of one of the country’s largest instant payments services.

Speaking to iGB, Ari Celia, who is in charge of the Brazilian central bank-authorized Pay4Fun, a digital payments operator for many entertainment services including gambling, announced details of the upcoming crackdown.

civil servants will form a new department to prevent unlicensed operators from receiving payments

Celia stated that a team of eight civil servants will form a new department to prevent unlicensed operators from receiving payments and penalize any transgressions.

The move comes ahead of the long-awaited introduction of a regulated federal gambling market in Brazil, with sites set to launch on January 1, 2025.

Illegal gamblers accounts to be closed

The government has already announced moves to prevent unlicensed sites from using Pix, a central bank-operated instant payments system. According to a survey from Pay4Fun, nine out of ten Brazilians used Pix as their preferred payment method when depositing on sportsbooks.

as soon as they receive a warning from the Central Bank they will shut down their bank account”

“If any commercial bank isn’t aware they have a company or client that is using illegal sites, as soon as they receive a warning from the Central Bank they will shut down their bank account,” said Celia.

“If they don’t, they’ll be subject to fines. There’s no point for any commercial bank in Brazil to allow those accounts to process Pix once they are notified.”

Crypto not an option

The growth of offshore sportsbooks which accept cryptocurrency and the difficulty of regulating them was cited as one reason to legalize online gambling in Brazil. Celia claimed that the nature of payment processing in Brazil will make it difficult for unlicensed operators to receive any funds.

“Crypto in Brazil is only used as an asset for investments, not as a payment method. To buy crypto here you need an account for a crypto exchange, meaning you have to provide personal data and the Central Bank is on top of that,” said Celia.

The move is a further restriction on operators’ ability to restrict payments after a law passed in April banned credit card, check, and cryptocurrency deposits. With government-controlled payment systems already overwhelmingly preferred by most Brazilian gamblers, lawmakers hope that restricting payments will solve the problem of regulating unlicensed sites.