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Brazil: Is a lack of education fuelling illegal gaming?

Speaking exclusively to Global Gaming Insider, BetBoom LATAM’s Director of Institutional Affairs and Customer Relations for LatAm, Laura Morganti, explains why communication and digital literacy are central to protecting bettors and strengthening Brazil’s market

brazil-illegal
brazil-illegal

How can you use communication as a strategic tool to protect consumers and distinguish legal operators in the coming years?

Communication will cease to be merely a commercial instrument and will begin to occupy a central role in consumer protection policy itself. Today, one of the biggest problems is that the average bettor cannot clearly distinguish a legal platform from an illegal one, which generates a huge information asymmetry. 

This year, the great challenge will be precisely this: communicating and teaching the consumer to identify where they are betting, what their rights are, what the risks are and what the limits are. There is also a point that needs to be stated more clearly: betting on an illegal platform is not something neutral or harmless. Those who gamble at illegal betting sites are complicit in the crime, as they are directly fueling the illegality itself.

Betting regulation is often discussed through taxation and crime prevention but what is still missing from this debate?

The consumer needs to be at the center of public policy. The debate is still too focused on revenue collection and too little on the real user experience. 

There is almost no talk of educating gamblers, digital literacy, contractual clarity and prevention of problem gambling. There is also a lack of a more honest discussion about the role of the consumer in this ecosystem. Betting on illegal sites is not just “taking a risk:” it is participating in an illegal activity, giving up any legal protection and, ultimately, financially reinforcing structures that the State itself claims to want to combat. 

How do we distinguish genuine consumer protection from policies that unintentionally harm the user?

The distinction is very simple in practice: real protection keeps the consumer within the regulated market; merely rhetorical protection pushes them out of it.

Whenever a rule, even a well-intentioned one, makes the legal environment artificially more expensive, more difficult, or more bureaucratic than the illegal one, the concrete effect is predictable: the player migrates to where there is no tax, no control, and no protection whatsoever. A public policy is only good if it works in the real world. If it “protects” on paper, but in practice expels the user to the clandestine market, it has failed in its essential objective.

At what point do you think regulation actually stops protecting the consumer and starts exposing them to greater risk?

This happens when regulatory and tax burdens begin to distort competition in favor of the illegal market. The example of the attempt to tax bettors’ deposits through the creation of the CIDE-Bet tax is quite illustrative. 

If the bill providing for this contribution passes in Congress, a bettor who deposits BR100 ($19) will only be able to use BR85, while on the illegal site they will still have BR100. The State itself is creating an economic incentive for migration to the clandestine environment. 

Where should the legal line be drawn between responsible communication and practices that may mislead consumers, when it comes to advertising and influencer marketing?

This line revolves around honesty and transparency. Responsible communication doesn’t promise gains, doesn’t glamorize risk and doesn’t exploit vulnerabilities. It makes it clear that the bet is entertainment, not an investment.

Influencer marketing needs to follow exactly this logic: the public must know that it’s advertising, they must receive clear information, and they cannot be led to believe that there is any kind of guaranteed 
gain or illusory advantage. 

Brazil now has a robust regulatory framework on paper, still, in practice, where is the biggest gap between legal standards and the consumer’s real experience?

The main gap lies in the fact that the average consumer still cannot easily differentiate between what is legal and what is illegal. As long as this persists, the illegal market will continue to compete at an advantage, even though it is riskier, more opaque and completely devoid of guarantees for the user.

How should enforcement evolve to be more effective without becoming punitive?

Oversight needs to be very strict with those outside the system and technical, predictable and proportionate with those inside. The focus regarding regulated operators should be on course correction, improvement of practices, and continuous raising of compliance standards. 

What lessons from other jurisdictions should Brazil adopt and which should it avoid?

The main lesson is quite clear: when taxation and restrictions on the legal market are excessive, the illegal market grows. There are recent examples in Europe, such as the Netherlands, where excessive tightening of regulations resulted in a drop in revenue and an expansion of the clandestine market. Brazil should invest in effective enforcement, consumer education, and preserving the economic viability of licensed operators.