Operation Shadow Game: Brazil’s tax probe into sports betting, and the retroactive tax risk now hanging over licensed operators

Brazil’s Federal Revenue Service and the Federal Public Prosecutor’s Office, through Gaeco Nacional, launched Operation Shadow Game on Friday (28/8) against a sports betting group said to have moved more than R$ 5 billion in 2025 alone. For high-risk payment providers, the bigger issue is not just the raid itself, but the question it revives: how far can Brazil go in taxing betting activity retroactively for a period when the sector was not yet fully regulated?

1. The operation targeted a corporate group in sports betting and involved six search-and-seizure warrants in João Pessoa (PB), Recife (PE) and São Paulo (SP). The action included 28 Federal Revenue Service officials and ten federal prosecutors. No arrest warrants were issued.
2. According to the Federal Revenue Service, 11 tax procedures have already been opened, with a potential recovery of around R$ 300 million for the public coffers. That puts the case in the same bracket as a tax and compliance enforcement action, not just a criminal probe.
3. This was the second major operation against the betting sector in less than a month. Operation Arena took place on 13 August, with 17 warrants across five states and a court-ordered freeze of up to R$ 1 billion in assets. In both cases, the suspicion is the same: companies incorporated abroad, with Curaçao licences, were allegedly operating from Brazil while avoiding taxes before sector regulation took effect on 1 January 2025.
4. Brazil’s Receita Federal says the group targeted in today’s operation is NSX Brasil, the company behind the Betnacional brand. The case matters beyond one operator because it forces the market to confront a familiar high-risk problem: what counts as taxable activity before the rules were actually in force, and how much of that exposure can be pushed backwards in time.
5. The debate was already on the record before this operation. In September 2024, Robinson Barreirinhas, Brazil’s special secretary of the Federal Revenue Service, told the Senate’s CPI on Match Fixing and Sports Betting that the agency lacked the legal tools to tax betting companies that were not subject to Brazilian law. He later repeated that any assessment of tax liabilities from the deregulated years would still need to survive judicial review.

The underlying legal point is the one payment operators care about: Brazil approved fixed-odds betting under Law 13.756/2018 in December 2018, but took six years to regulate it, including four years during Jair Bolsonaro’s conservative administration, when the government chose not to move ahead with regulation for moral and religious reasons. That gap is now where the tax fight lives.