Brazil uncovers illegal betting scheme tied to 37 companies

Brazil’s Federal Revenue Service carried out a coordinated operation on Thursday with prosecutors from multiple states, identifying a suspected nationwide illegal betting structure built through dozens of linked companies. For PSPs and acquirers, the useful part is not the headline number alone: the scheme allegedly used payments infrastructure as a core part of the setup, which is exactly where banks and processors get dragged in.

1. The operation, called Operação Conto da Sorte, uncovered a network made up of 37 companies with an estimated financial turnover of 50.000 million reais, or approximately $9.700 billion. According to the authorities, the structure covered gambling, sports betting, and payment processing.
2. Finance Minister Dario Durigan confirmed the details and repeated the federal government’s position: zero tolerance for illegal betting. The case matters for payment providers because the companies under investigation were described as using corporate layers specifically designed to bypass regulatory controls.
3. Investigators said the group created dozens of companies and formally transferred many of them to third parties with no real economic capacity to run them. Some of those nominees were receiving state emergency aid while listed as owners of companies handling million-scale flows, while the actual management remained under the control of the people behind the scheme.
4. Several of the companies had no physical presence and operated only as intermediaries to route banking transactions. Authorities identified money laundering, tax evasion, real estate purchases with illicit funds, and failure to transfer net betting revenue, a legal requirement under the sector rules.
5. The operation included 14 search warrants in Pernambuco, Ceará, and São Paulo, aimed at collecting accounting records, audiovisual material, and evidence of how the companies really operated. In parallel, the court ordered the freezing of assets of up to 145 million reais, or approximately $28 million, to cover documented damages from the illicit activity.

The investigation also traces the origin of the scheme to Bodó, in Rio Grande do Norte, where the municipal agency LOTSERIDÓ began issuing irregular authorizations to betting companies without legal powers to do so. Even after the agency was shut down, several accredited companies kept operating without authorization from the Secretariat of Prizes and Betting.