Brazil’s sports betting ban could push compulsive players to illegal sites, O Globo reports

Economists and industry groups quoted by O Globo say the federal government’s ban on sports betting in Brazil, announced on Friday, September 25, could do the opposite of what it is meant to achieve: drive compulsive players toward unregulated platforms with no supervision or player-protection tools. For PSPs and payment teams, the practical takeaway is simple: when the regulated market shrinks overnight, the black market usually does not.

1. Flávio Ataliba, an economist and researcher at the Brazilian Institute of Economics of Fundação Getulio Vargas (FGV Ibre), said the people most likely to move when a regulated market is shut are the most compulsive bettors, not casual users. “Who migrates to illegal sites are the most compulsive people when it comes to gambling. It is not the casual bettor who migrates,” he said.
2. Ataliba also argued that Brazil is stopping a regulatory process before its effects have been measured. In his view, the government moved too quickly and banned betting without waiting to see whether regulation was working or not: “We were in a regulatory process and we do not know whether it was working or not. We did not even wait for the effects of regulation and it is already banning it, without seeing whether this will create problems.”
3. The National Association of Games and Lotteries (ANJL) said 41% of bets currently placed in the country already happen on illegal sites. According to the group, if online casinos are banned, that share could rise to between 78% and 82%. For payment providers, that is the kind of number that tells you the ban may change where transactions flow, not whether they happen.
4. ANJL president Plínio Lemos Jorge said taking down illegal sites is an endless job with limited results. Between June and August this year, at least 13.7 new domains were registered per day, even with takedowns carried out by Anatel, Brazil’s telecom regulator.
5. Jorge said the association will comply with whatever is ordered by President Lula, but did not rule out going to court and seeking compensation from the Union for material and moral damages. That matters for the regulated payments stack because abrupt policy shifts often end up in litigation, and litigation is where licensing, acquiring, and settlement assumptions get stress-tested.