The Brazilian National Telecommunications Agency (Anatel) is facing a shortage of enforcement resources, severely affecting its ability to block illegal gambling websites. This has raised concerns within the industry about the effectiveness of the entire legal gambling framework, especially after gambling companies have just paid substantial fees for licenses.
According to "Folha de S.Paulo," due to government budget cuts, Anatel lacks sufficient funds and personnel to enforce the blocking orders for illegal sites issued by the gambling regulatory authority SPA. To make matters worse, a large number of civil servants are set to retire by 2026, exacerbating the human resources issue.
Since the regulation of the Brazilian online gambling market, gambling companies have paid over 2.3 billion Brazilian reais in license fees. The revenue intended to combat black market activities seems to have not translated into corresponding enforcement resources. BetMGM's legal director, Eduardo Ludmer, questioned this: "You can't enforce without resources. The industry has been providing funds to the government, yet it sees no results."
Anatel's enforcement director revealed that the agency has blocked over 15,000 illegal gambling websites since the market opened. However, its chairman Carlos Baigorri recently publicly called on the government to grant more authority and resources to maintain legal market order.
Meanwhile, the Brazilian government is trying to fill the fiscal deficit by increasing taxes. In mid-June, a temporary measure raised the total gambling revenue tax rate from 12% to 18%. Congress will decide in the coming months whether to make this measure permanent.
However, the industry believes that targeting legal operators for tax revenue might lead players towards illegal platforms, further weakening the already shaky regulatory effectiveness. The Brazilian Responsible Gambling Association (IBJR) pointed out that the illegal market's share could rise from 50% to 60% as a result.
Ludmer warned that the gambling industry is becoming the easiest target for government budget adjustments due to its "political unpopularity." He emphasized: "When public spending is high and service quality is low, the gambling industry seems to be used as a tool to fill the deficit."
As resources to combat illegal gambling continue to dry up, and the legal market faces the dual pressures of increased tax burdens and weak regulation, the Brazilian gambling ecosystem is at a critical juncture in policy negotiations.
