Brazil’s Department of Prizes and Betting (SPA) is now facing legal challenges from several betting companies after releasing a list of operators authorized to keep operating through the end of 2024. The list, initially published in early October, features 96 companies and 210 associated brands. These operators are either applying for federal betting licenses or were already operating in Brazil’s grey market before the SPA’s September 30 deadline.
However, several operators excluded from the list have responded with lawsuits, claiming that their exclusion was unjust and detrimental to their business. Currently, eight separate lawsuits have been filed against the Ministry of Finance, which oversees the SPA.
Government Crackdown on Unlicensed Betting Sites
As Brazil moves closer to launching its fully regulated betting market on January 1, 2025, the government is cracking down on unlicensed operators. In addition to publishing the approved list, the SPA has ordered the blocking of over 2,000 websites that it considers to be operating illegally. Among the sites being blocked by Brazil’s National Telecommunications Agency (Anatel) are major brands like Betfred and BoyleSports. These moves are seen as part of the government's push to clean up the market ahead of full regulation.
Operators that were left off the approved list must now cease operations until they can secure proper federal authorization. The exclusion of several companies from the list has sparked widespread dissatisfaction, leading to legal disputes.
Zeroumbet’s Legal Battle
One of the most high-profile lawsuits comes from Zeroumbet, a platform owned by lawyer and social media influencer Deolane Bezerra. Zeroumbet applied for a federal betting license in August 2024, but the company was excluded from the SPA’s approved list due to an ongoing investigation involving its founder. The investigation, dubbed Operation Integration, focuses on allegations of illegal gambling and money laundering, in which Bezerra is accused of using Zeroumbet to launder illicit proceeds. She was arrested twice in September as part of the investigation.
Zeroumbet’s legal team argues that the company itself is not implicated in the investigation and that only Bezerra should face penalties. In court documents, they assert that “in this case, the one who would be punished would be Deolane Bezerra and not the company.” The lawsuit aims to allow Zeroumbet to continue operating while the investigation is resolved.
The SPA has defended its decision to exclude Zeroumbet, stating that it did so to protect the public and safeguard the integrity of the gambling market. The Ministry of Finance also gave the company five days to respond to the decision, further complicating the ongoing dispute.
Alternative Approaches: Esportes da Sorte
While some companies are pursuing legal action, others have found different ways to remain in the market. Esportes da Sorte, another operator excluded from the federal list, secured a license through Rio de Janeiro’s state lottery regulator, Loterj. By acquiring shares in ST Soft, a company already licensed by Loterj, Esportes da Sorte can continue to operate under state-level authorization.
However, this workaround has sparked a separate conflict between federal and state authorities. The Brazilian government has taken the issue to the Supreme Federal Court (STF), questioning whether state licenses should allow operators to offer services nationwide. The outcome of this legal battle could set a significant precedent for the future of betting regulation in Brazil.
Broader Implications for the Lula Administration
The legal challenges surrounding the approved list have highlighted broader issues within Brazil’s burgeoning gambling market. Although betting has been legal since 2018, the lack of clear regulations has created confusion and frustration for both operators and the government. The Lula administration has been working to establish a regulatory framework, but the process has been slow, and legal disputes like these are adding pressure.
For example, Sportvip Group International Apostas, another company excluded from the federal list, has also filed a lawsuit. The company claims that its exclusion could result in severe financial and reputational damage, arguing that it is being unfairly shut out of the market. Although a court recently denied Sportvip’s request for an injunction to continue operating, the legal battle is far from over.
Meanwhile, a report from Brazil’s Central Bank revealed that, in August, approximately R$3 billion was transferred to betting sites via Pix by individuals enrolled in the Bolsa Família social welfare program. This revelation has heightened concerns about the social and economic impact of unregulated betting, putting additional pressure on the government to act swiftly.
Source:
"Governo Já Enfrenta Ações Sobre Lista de Bets e Empresa de Deolane Tenta Liberação", folha.uol.com.br, October 16, 2024.
