Key Moments:
- Investigators found that six licensed betting sites in Rio de Janeiro and Paraíba permitted wagers from outside their sanctioned states.
- Legal experts have raised alarms about the risks of state competition and potential regulatory breakdown if state boundaries continue to be ignored.
- Paraíba’s lottery authority has reported ongoing oversight, while enforcement actions from Rio de Janeiro have not been publicly addressed.
Enforcement Boundaries Under Scrutiny
A recent probe has put the spotlight on Brazil’s ability to uphold its nascent gambling regulations. The investigation uncovered that six betting websites licensed by Rio de Janeiro and Paraíba accepted deposits and bets from users in São Paulo, bypassing legal limits set forth in Law 14.790, enacted in 2023. This law mandates that fixed-odds betting and lottery platforms must only serve customers within their licensing state’s borders.
| State Licensed | Number of Platforms | Accepted Out-of-State Bets |
|---|---|---|
| Paraíba | 4 | Yes |
| Rio de Janeiro | 2 | Yes |
The test, detailed by G1, involved successfully betting sums from BR2 ($0.40) to BR7. Despite restrictions, all six platforms processed the wagers, indicating a disconnect between regulation and digital practice.
Expert Warnings and Legal Concerns
Law researcher Luiz César Loques cautioned that ignoring geolocation controls opens the door to unwanted interstate competition, saying:
“If one state disregards geolocation limits, it creates a kind of competition war among states, which is not desirable.”
Constitutional law professor Telma Rocha Lisowski stressed that robust state oversight is essential. She suggested that without enforcement and penalties, Brazil risks intervention from federal authorities, further complicating the landscape for operators and regulators.
Regulatory Oversight in Question
Responding to the findings, the Paraíba Lottery Authority (Lotep) stated it maintains “permanent oversight” and investigates any irregularities, which could result in fines or even licence revocation. Lotep also reported BR1.7 million in betting revenue in 2025, reflecting the sector’s rapid expansion. In contrast, Rio de Janeiro’s government did not respond to requests for comment, leaving its enforcement measures unclear.
Wider Challenges for Brazil’s Gambling Market
Along with Paraíba and Rio de Janeiro, betting licences are active in Paraná, Sergipe, and Tocantins. Maintaining compliance with state-only jurisdiction is proving challenging as digital platforms easily cross borders. The Ministry of Finance’s Secretary of Prizes and Betting reiterated that all state betting activity must remain local, warning that continuous violations could prompt intervention from the Office of the Attorney General.
Tech Innovation Poses New Hurdles
The ability of bettors to conceal their location using VPNs and digital wallets demonstrates that technology has outpaced current enforcement tools. Should regulators fail to strengthen oversight, states may begin aggressively competing for a nationwide customer base, pushing the market toward legislative chaos rather than state-level control.
While Brazil’s gambling sector experiences unprecedented growth, regulators face mounting pressure to adapt their frameworks to the realities of the digital era.
- Author
Daniel Williams
