The co-founder and CEO of the Brazilian Responsible Gambling Association (IBJR), André Gelfi, warns that the illegal market still accounts for about 60% of Brazil's monthly gambling total revenue (GGR).
Brazil launched its regulated online gambling market on January 1, ending years of regulatory delays, which many attribute to the surge in illegal gambling and gaming websites.
However, concerns about the black market persist, with licensed operators worried about unfair competition from operators who do not comply with the strict regulations imposed by the Betting and Wagering Secretariat (SPA) on licensed companies.
Gelfi, who is also the executive partner of Betsson's operations in Brazil, is one of the observers of the Brazilian black market. He helped establish the IBJR trade body, providing independent representation for the industry and raising concerns with federal regulatory bodies.
In an interview with Poder360, he stated that unlicensed operators generate about 1 billion Brazilian reais per month (approximately £125.5 million/€160.8 million/$175 million), which corresponds to 60% of the online market.
He estimates the industry's annual revenue at 25 billion Brazilian reais based on pre-regulation data.
"The main challenge we face in the future is the regularization of the gambling market," Gelfi said. "This market involves unmonitored, untaxed economic activities, making it very difficult for the sustainable development of the market."
Despite reports that the black market dominates, Gelfi believes that strict regulation will ultimately make Brazil one of the most strictly regulated gambling markets in the world.
Gelfi added: "Although the informality is at an absolutely unsustainable level, we know that as a framework, our regulation is modernized and makes the market competitive."
Collaboration is key to limiting illegal operators
IBJR claims to hold 75% of the Brazilian gambling market, with members including giants like Bet365, Entain, and Flutter.
The company vows to cooperate with SPA and government agencies such as the Brazilian Federal Revenue and Central Bank to crack down on the illegal gambling market.
Gelfi explained: "As an institution led by IBJR Executive Director Fernando Vieira, our main goal today is to raise awareness and cooperate with authorities and regulatory bodies so that we can truly accelerate this regularization process."
"We understand that the smoother the dialogue, the more effective our work."
One of the measures to combat the black market is website blocking, and Gelfi noted that so far, 12,000 illegal websites have been shut down.
However, Gelfi expressed concerns about the effectiveness of website blocking, believing that "blocking alone is not enough" to combat illegal operators.
Instead, like others, he believes that stopping payments is an effective way to restrict illegal operators, noting that banning the instant payment service Pix is a more effective enforcement measure.
"Perhaps our main mechanism to curb the illegal market is monitoring financial transactions," Gelfi added. "The core of our activities is Pix.
"If financial institutions can effectively monitor who is using Pix (for illegal betting), we can curb this informal behavior."
