Brazil Central Bank president calls for more power to block illegal betting sites

In a meeting of the CPI on Tuesday (8 April), Galípolo was questioned about the Central Bank’s ability to sanction internet providers and payment institutions facilitating illegal betting in Brazil.

In response, Galípolo said the monitoring and sanctioning of the betting sector fell solely upon the regulator, the Secretariat of Prizes and Bets (SPA) and the Central Bank needed more powers in this area.

“The SPA is the one that defines which bet is authorised or not,” Galípolo explained.

He said the Central Bank, once informed by the SPA, could only tell a financial institution when it can no longer provide services to a gambling company. The Central Bank cannot intervene with a transaction. Only the financial institution itself can do that.

Galípolo blamed the proliferation of illegal betting sites on the period of uncertainty between the national congress’ first approval of online betting legislation in 2018 and the regulation’s final green light in 2023.

Does the Central Bank hold any sanctioning powers for illegal betting?

The Central Bank’s executive secretary, Rogério Antônio Lucca, estimated between BRL20 billion (£2.6 billion/€3 billion/$3.3 billion) and BRL30 billion per month will be spent on illegal betting in Brazil this year.

In March, the SPA published Normative Ordinance No 566, which sought to clarify the procedures for reporting payment methods that have been accepting transactions via illegal betting sites.

Senator Dr Hiran Gonçalves, the CPI’s chair, enquired about the Central Bank’s oversight of the punishment of such institutions, sharing his belief there is a “legal vacuum” in the abilities of government bodies to restrict illegal betting.

The CPI’s leader senator, Soraya Thronicke, noted the SPA has the only sanctioning power for illegal betting companies. She asked whether the Central Bank could go after payment institutions accepting illegal betting transactions.

Galípolo said the Central Bank only has the power to intervene if an illegal betting site is linked to financial crimes such as money laundering.

“We do not have the legal authority to act on transactions involving illegal bets,” Galípolo added. “This is outside our scope of authority.

“What we can do is, in the scope of preventing money laundering and financing terrorism, we act so that these institutions have these controls and procedures to communicate.”

However, Galípolo also added: “Many times [a flagged activity] goes straight to COAF [Financial Activities Control Council], to the Public Prosecutor’s Office, to the Federal Police.”

Not up to Central Bank to block betting with social welfare

Last week, SPA leader Regis Dudena confirmed betting with social welfare money will be banned in Brazil, with an ordinance on the matter expected soon.

However, Dudena also warned the ban could be difficult to implement, with the National Secretariat of Citizen Income (Senarc) previously stating just 1% of the recipients of welfare from the Bolsa Família programme accessed their social welfare via a physical card.

The other 99% of recpients access their funds via their bank account, therefore blocking the Bolsa Família card from being accepted on betting sites would be ineffective.

The Central Bank last year revealed a fifth of the funds it sent through its Bolsa Família programme in August 2024 was spent on online betting.

In Galípolo’s view, the Central Bank doesn’t have the necessary powers to implement the ban. He added: “Today, the Central Bank has no authority to impose this type of restriction on people who receive Bolsa Família from placing bets.

“It is not within our jurisdiction, scope, nor does it have the authority to do so.”