Tough Gambling Regulations in Brazil May Boost Black Market, GR8 Tech Warns

Last month, the government in Brazil confirmed its intention to finalize its laws regarding betting and online gaming by this summer. The country’s Ministry of Finance confirmed it expects the regulatory framework to be established in four stages with the last one ending in July.

Amid the plans for a regulated iGaming and betting market, concerns continue to mount about the potential excessive restrictions that may impact the sector. This was precisely one of the topics that was discussed at Next.io’s Valletta 2024 conference which was organized during a number of days throughout last week.

One particular panel as a part of the recent event, titled “Brazil and LatAm Updates – Ping pong style,” saw experienced gaming executives discuss the current state of Brazil’s regulations. The panel was moderated by Rokker’s founder and CEO, Andy Rogers and included Thomas Carvalhaes, GR8 Tech’s senior business development manager and Vibra Gaming’s co-founder, Ramiro Atucha, as speakers.

Overregulation of Gambling May Benefit the Black Market

Speaking about the regulation in Brazil, Carvalhaes highlighted the importance of self-regulation and learning from best practices from markets that have already established robust and effective rules. He criticized the proposed gambling regulation in Brazil, saying that he could not support it.

Explaining his position, Carvalhaes said that the proposed rules for betting and iGaming bring many limitations and restrictions. Ultimately, according to the executive, tough restrictions may enable the black market to thrive rather than helping create a healthy and regulated gambling sector.

“There’s so many restrictions, so many limitations. And I feel, this is my projection, this is going to open so much more room for a black market to thrive rather than an actual healthy regulated market which is where we should be heading.“

Thomas Carvalhaes, senior business development manager LatAm at GR8 Tech

Although Carvalhaes said that Brazil should aim to establish a healthy market and follow examples from other jurisdictions, a primary concern remains excessive regulation which may ultimately drive customers to the black market.

Atucha shared Carvalhaes’ concerns, adding that the real threat is the unlicensed black market rather than the regulated gambling sector. Still, Vibra Gaming’s executive explained that many people are trying to “reinvent the wheel” when it comes to regulation, and this is definitely a concern because tough limits may push people to the black market.

As an example, Atucha pointed to Germany where a five-second delay is mandatory between each slot spin. He added that such limitations are “pushing people to the crypto casinos.”