André Gelfi, the co-founder and CEO of the Brazilian Institute of Responsible Gaming (IBJR), has expressed significant concern regarding the illegal gambling sector in Brazil, which purportedly still accounts for around 60% of the nation’s monthly gross gaming revenue (GGR).
On January 1, Brazil officially opened its regulated online betting market, marking a significant regulatory shift after years of delays that many attribute to the explosion of unregulated gambling sites. Despite this transition, the specter of illegal betting continues to loom large, as licensed operators report feeling the strain of competition from entities that do not comply with the stringent regulations established by the Secretariat of Prizes and Bets (SPA).
Gelfi, who also oversees Betsson’s operations in Brazil, is deeply invested in the future of the legal market. He played a pivotal role in founding the IBJR, aiming to provide an independent voice for the sector and engage with federal regulators on pressing issues. In a recent conversation with Poder360, he highlighted that unlicensed operators are generating an estimated BRL1 billion (approximately £125.5 million, €160.8 million, or $175 million) in monthly betting GGR, which translates to 60% of the entire online gambling market.
Using pre-regulatory data, Gelfi projects that the total annual revenue for the sector could reach BRL25 billion. He acknowledges that the foremost challenge lies in formalizing the betting landscape in Brazil. “We are grappling with untracked and untaxed economic activities, which complicate our efforts to develop a sustainable market,” he stated.
Nonetheless, Gelfi holds a positive outlook regarding Brazil’s potential to emerge as a prominent player in the global regulated gambling arena, attributing this to the modern and competitive nature of the current regulatory framework. "Even with informal operations at unsustainable levels, we believe our regulations can provide the necessary competitiveness," he commented.
Collaboration is Essential to Combat Illegal Gambling
The IBJR claims to represent a substantial portion—about 75%—of the Brazilian betting market, counting major players like Bet365, Entain, and Flutter among its members. To confront the challenge posed by illegal betting, the IBJR has committed to a cooperative approach, working alongside SPA and various governmental agencies, including the Federal Revenue Service and the Central Bank of Brazil.
Under the guidance of IBJR executive director Fernando Vieira, Gelfi emphasized the importance of fostering a proactive dialogue with regulatory bodies to hasten the formalization process. "An open exchange will enhance the effectiveness of our initiatives," he noted.
One tactic currently employed to address the illegal market is the blocking of infringing websites. Gelfi reported that efforts have led to the removal of around 12,000 illegal sites. However, he cautions that this measure alone is insufficient to eliminate the problem of unauthorized operators.
As an alternative, Gelfi advocates for payment adjustments, proposing the cessation of the instant payment service Pix for illegal betting activities as a more impactful enforcement strategy. "Monitoring financial transactions is crucial in this fight against illegitimacy. Since Pix is at the core of these operations, effective oversight of its users could significantly curtail informal practices," he asserted.
Through these collaborative and strategic efforts, the IBJR aims to turn the tide against illegal gambling in Brazil, paving the way for a more regulated and sustainable betting environment.