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Brazil’s regulator is preparing to deploy a host of enforcement tools to counteract a well-established offshore market, once a regulatory regime becomes fully effective next year.
Speaking during a panel at the International Association of Gaming Regulators (IAGR) joint conference with the International Masters of Gaming Law (IMGL) in Rome on Wednesday (October 23), Regis Dudena, the head of the Secretariat of Prizes and Betting, said there is no silver bullet to “shoot all illegal operators down” and the first step in the battle is to convince politicians and consumers of the benefits of the regulated sector.
One tool already being used by the Brazilian regulator, since earlier this month, is to block internet access to domains that are not approved, which Dudena admitted is “not enough, but a good start”.
“After that, we are starting a connection with online platforms and social media. In Brazil, our law gives us jurisdiction to access them and ask them to block profiles and content. It's very challenging as it's a very daily process to find the content and profiles being used by the illegal sector,” he said.
The regulator is also prepared to implement payment blocking measures through Pix, the ubiquitous instant payment system managed directly by the federal government via the Central Bank Of Brazil.
“We have direct access through the central bank to this system. We are now constructing a way to start to block payments on Pix. I really think we will be successful with this. When you follow the money and you block the money you have a way to avoid people that insist on operating in an illegal way,” Dudena said.
Dudena believes there will also be some degree of organic channelisation because of the guarantees provided by the regulated sector.
However, fellow panellist Neil Montgomery, the founding partner of Brazil-based law firm Montgomery & Associados, warned that many operators looking to become licensed in Brazil may not be considering the cost of the country’s consumer protection laws.
“Our legislation is one of the strictest in South America. It is based on three pillars. Firstly, strict liability. You can also have a reversal of the burden of proof, so instead of a plaintiff having to prove, it can be switched to the provider of goods and services. Thirdly, consumers can take legal action where they live. Which in a country as gigantic as Brazil can cause a lot of problems,” Montgomery said.
Montgomery warned that the regulated gambling industry could suffer the same fate as commercial aviation litigation in Brazil, which he says has seen a “record-breaking” number of claims.
“Probably, it will become the record-breaking country when it comes to betting-related claims as well. In Brazil, most of these are dealt with in small claims court,” he said.
