Brazil’s Betting Industry Questions Illegal License Fees

Eduardo Ludmer, head of legal at BetMGM, has raised concerns over the Brazilian government’s use of BRL2.3 billion (approx. $417 million) collected in betting licence fees, as enforcement agencies struggle to curb illegal gambling operations.

Ludmer’s comments follow a report from Folha de S.Paulo revealing that Brazil’s National Telecommunications Agency (Anatel) is facing a budget shortfall. The agency, which is responsible for blocking access to unlicensed betting sites, reportedly lacks both funding and personnel to carry out orders issued by the Secretariat of Prizes and Bets (SPA), the country’s betting regulator.

“You cannot not have resources to enforce the law,” Ludmer told iGB. “Public services in Brazil often fall short in quality, despite being generously funded. So, when we say that our industry is financing the costs of the administration, it feels more like we’re underwriting a record-breaking level of government expenditure and debt.”

 

Topic	Details
Licence Fees Collected	BRL2.3 billion (~$417 million) paid by betting operators
Enforcement Agency	Brazil’s National Telecom Agency (Anatel) tasked with blocking illegal sites
Current Challenges	Funding shortfalls, staff retirements, and limited resources for site blocking
Tax Changes	GGR tax increased from 12% to 18%, pending congressional approval
Industry Concern	Funds from licence fees not effectively used for black market enforcement
Risk	Higher taxes may drive players to illegal betting sites, expanding the black market

Enforcement Under Pressure

Since Brazil launched its regulated betting market, Anatel has blocked over 15,000 illegal sites, according to the agency’s Head of Enforcement, Gesiléa Teles. However, its president, Carlos Baigorri, recently stated that the agency needs expanded authority and additional resources to keep pace with the black market.

Anatel’s challenges are compounded by national budget cuts and the expected retirement of a significant number of civil servants by 2026, which could further erode enforcement capacity. The failure to adequately fund enforcement comes despite the sizable revenue from licensing fees. Operators argue these funds should support efforts to dismantle illegal networks that continue to siphon market share from licensed businesses.

The regulatory tension has intensified following the federal government’s decision to raise the tax on gross gaming revenue (GGR) from 12% to 18%. Issued as a provisional measure on June 11, the hike is subject to congressional approval within 120 days.

The increase forms part of a broader government strategy to eliminate Brazil’s budget deficit by the end of 2025. But critics say targeting the betting industry could backfire. Ludmer argues the sector is politically vulnerable and seen as a soft target for revenue-raising. “They are just trying to go after, let’s say, the weaker [option], and then they know that many politicians in the opposition are not fond of the betting sector,” he said.

 

You cannot not have resources to enforce the law.

 

Risk of Fuelling the Black Market

The Brazilian Institute of Responsible Gaming (IBJR) has warned that the tax hike may drive more players toward unregulated platforms, potentially increasing the black market’s share from 50% to 60% of total activity.

“The way to increase collection is not to penalise those who operate within the law, but to rigorously combat illegality and protect bettors,” the IBJR said in a recent statement. With enforcement efforts weakened and licensed operators facing higher costs, industry experts fear the government’s approach could undermine the long-term sustainability of Brazil’s regulated market.

As Congress deliberates the provisional tax measure, the debate over the effective use of public funds and the fight against illegal gambling is likely to intensify — with industry leaders calling for greater transparency, stronger enforcement, and a more balanced regulatory framework.