Brazil: Why a Quick Reversal of the Gambling Crackdown Should Not Be Expected, According to Ilya Machavariani

The short version from Ilya Machavariani, CEO and Senior Partner at 4H Agency: do not count on Brazil walking back the decision quickly. For high-risk PSPs, the practical question is not whether demand disappears — it does not — but how operators re-route payments, corporate structures, and risk exposure once the local lane gets blocked.

1. Asked whether the situation in Brazil could be pre-election hype and whether a fast reversal of the decree was realistic, Machavariani said the answer was “rather no than yes” and that a quick rollback should not be expected.
2. He described the move as pure politics, saying gambling is the ideal scapegoat and that a short decree before elections lets politicians claim they “saved millions of families.” In his view, the economic consequences are not the priority in that moment.
3. On whether yesterday’s legal operators could move into the gray market even though the regulator already has their data, he said yes: Brazilian legal entities would be shut down, while operations would be moved offshore, to places such as Curaçao or Anjouan, with nominees on top. If challenged, the standard line would be that there was a mistake and a third party used the brand.
4. On payment organizers facing criminal liability, he said banks will tighten up, but bans do not kill demand. If gateways are fully closed, traffic moves to cash and alternative schemes, which he compared to how things work in China.
5. His main takeaway for the industry: the Brazil case, together with reforms in Curaçao, shows instability in both models — the white local market and the classic offshore setup. Businesses will need alternative operating structures, and the only thing that really wins is a proper legal market, not prohibition.