Brazil’s Central Bank says it lacks power to block illegal betting transactions

The President of Brazil’s Central Bank, Gabriel Galípolo, told lawmakers this week that the institution does not have the legal authority to block illegal betting operations or penalize those involved in facilitating such transactions.

Speaking before the parliamentary inquiry commission (CPI) on betting, Galípolo noted that regulatory responsibility lies with the Secretariat of Prizes and Bets (SPA), not the Central Bank.

“The SPA is the one that defines which bet is authorised or not,” Galípolo stated during the CPI session on Tuesday, April 8.

His comments came in response to questions from commission members regarding the Central Bank’s capacity to act against internet providers and financial institutions that process payments for unauthorized betting platforms. Galípolo explained that the Central Bank can only take limited action once the SPA determines a betting site is operating illegally.

In such cases, the Central Bank may inform financial institutions that they are no longer permitted to provide services to the specific company in question. However, it cannot directly block transactions. “We do not have the legal authority to act on transactions involving illegal bets,” Galípolo said. “This is outside our scope of authority.”

The president of the commission, Senator Dr. Hiran Gonçalves, raised concerns about a “legal vacuum” when it comes to enforcing penalties on illegal betting operations. The CPI’s leader, Senator Soraya Thronicke, echoed that concern, noting that the SPA alone has the legal power to impose sanctions on unlicensed gambling companies. 

Galípolo added that enforcement is only possible when financial crimes are involved, such as money laundering or the financing of terrorism. In those instances, the Central Bank can require institutions to implement controls and report suspicious activity to oversight bodies.

“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,” he said.

Rogério Antônio Lucca, the Central Bank’s executive secretary, estimated that illegal betting in Brazil could reach BRL20 billion to BRL30 billion ($3.3 - 5 billion) per month in 2025.

Efforts to curtail such activities have included regulatory updates by the SPA. In March, the body issued Normative Ordinance No. 566, clarifying how payment methods linked to illegal betting should be reported. Still, enforcement remains a challenge.

The issue of welfare money being used for gambling also drew attention during the hearings. Last week, SPA head Regis Dudena announced plans to prohibit the use of social welfare funds for betting, but acknowledged enforcement could be problematic.

According to the National Secretariat of Citizen Income (Senarc), only 1% of Bolsa Família recipients access their funds through a physical card, with the remaining 99% using their bank accounts. Blocking card-based transactions would therefore have limited impact.