Brazil’s Government has notified 37 fintech companies suspected of facilitating financial transactions for unlicensed operators.
According to the Ministry of Finance’s Secretariat of Prizes and Betting (SPA) and the Federal Revenue Service, the institutions allegedly processed payments for around 160 betting operators that are not authorized to offer gambling services in Brazil.
Authorities have also taken down approximately 54,000 websites linked to illegal betting activities.
The notified fintech companies have been instructed to terminate their relationships with the operators and prevent further financial transactions.
Under rules introduced through a presidential decree signed in June, institutions that continue processing payments after receiving official notification may become jointly liable for the operators’ activities and face penalties based on the total value of the transactions involved.
The Central Bank argued that the usual procedure involves notifying the financial institution of a request to freeze funds but the responsibility for actually freezing the resources lies with the institution itself.
If it fails to comply, the Central Bank can issue a warning.
Although no accounts have yet been frozen, the current notifications form part of a transition period running until the end of August, giving financial institutions time to comply with the new framework.
From that point onwards, notifications may be accompanied by asset-freezing orders and administrative proceedings led by the Ministry of Justice to determine whether institutions complied with the Government’s instructions.
According to the Government estimates, between 41% and 51% of betting platforms still serving Brazilian consumers operate without authorization, attracting an estimated 25.2 million users.
The Government has not disclosed the names of the fintechs or the financial amounts under investigation, citing the confidentiality of the ongoing enforcement efforts.
To work in Brazil, licensed operators must pay a BR30m ($5.8m) license fee, maintain a BR5m financial reserve to guarantee player payouts and pay a 12% tax on GGR
