The Brazilian federal government announced on Friday (19) a new regulatory framework to combat illegal online betting, known as “bets.” Under the new measures, both individuals and legal entities, including influencers and financial institutions, face strict tax liabilities for promoting or facilitating the operations of unauthorized betting platforms.
According to the Secretary of the Federal Revenue, Robinson Barreirinhas, the initiative aims to dismantle the financial infrastructure that sustains the illegal betting market in Brazil. The government plans to block resources from illegal operators and redirect those funds toward public security initiatives.
The government is implementing a “joint” tax liability model, meaning that if a fintech or payment institution continues to process transactions for an unauthorized betting site after a formal notification from the Secretariat of Prizes and Betting (SPA), that institution may be held directly responsible for the unpaid taxes—including income tax, PIS, and COFINS—that the betting operator failed to pay.
How Influencers Are Affected
Influencers who promote illegal betting sites now face direct financial consequences from the Federal Revenue. Secretary Robinson Barreirinhas stated that beyond existing administrative sanctions from the SPA, promoters will be subject to tax collection on the income derived from such advertisements.
The government’s stance is that these individuals are generating revenue from activities that operate outside of Brazilian law, often from bases located abroad. By taxing this income, the government aims to increase the cost of participating in the promotion of irregular gambling operations.
The shift toward “joint liability” marks a significant evolution in how Brazilian regulators view the digital betting ecosystem. By targeting the intermediaries—the payment processors and the marketing conduits—the government is attempting to strike at the supply chain of illegal betting rather than just the operators themselves, who are often harder to reach across international borders.
Why Financial Institutions Face New Scrutiny
The federal government has issued a new ordinance establishing procedures for holding financial and payment institutions accountable for their role in the illegal betting sector. The economic team maintains that the illegal market would struggle to survive without the movement of financial resources provided by these entities.
These institutions may be held liable if they continue to process transactions for betting companies that lack authorization to operate in the country. This responsibility is triggered following a formal and specific communication from the Secretariat of Prizes and Betting regarding the illegal status of the operator.
What May Happen Next
Following this announcement, it is likely that financial institutions will heighten their compliance checks to avoid the “joint” tax penalties described by the Federal Revenue. If institutions fail to cease processing transactions for unauthorized sites after receiving formal notifications, they could face significant tax bills, including PIS/COFINS and contributions meant for the Ministry of Health.
Furthermore, influencers may see a shift in the landscape of brand partnerships as the risk of personal tax liability becomes a reality. Observers should watch for how quickly the Secretariat of Prizes and Betting issues formal notifications to fintechs, as these communications will serve as the legal catalyst for the new tax enforcement measures.
Frequently Asked Questions
Who is responsible for the taxes of an illegal betting site?
Under the new rules, the responsibility can extend to influencers who promote these sites and to financial or payment institutions that facilitate the movement of their funds, in addition to the betting operators themselves.
What happens if a fintech processes a payment for an illegal bet?
If a fintech continues to process these transactions after receiving a formal, specific notification from the Secretariat of Prizes and Betting, it may become liable for the taxes that the betting operator failed to pay, such as income tax and PIS/COFINS.
Where will the blocked funds from illegal bets go?
The government announced that it intends to block resources from illegal betting platforms and redirect those funds specifically toward public security actions.
Do you believe that holding intermediaries accountable will effectively curb the growth of unauthorized betting platforms in Brazil?
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