The Secretariat of Prizes and Bets (SPA), a key regulatory body within Brazil’s Ministry of Finance, is struggling to effectively combat the illegal betting market due to limited resources. This challenge was highlighted by Udo Seckelmann, a gambling lawyer from Bichara e Motta Advogados, in a discussion with iGB. Despite the legal betting sector’s growth, it remains overshadowed by a significant black market, which is estimated to comprise between 41% and 51% of the total market. The SPA’s efforts to address this issue have been acknowledged, but the agency faces a critical shortage of personnel and outdated technology, factors that have impeded its regulatory capabilities.
This situation has prompted the Brazilian Federal Court of Accounts (TCU) to mandate that the Ministry of Finance enhance the SPA’s infrastructure within a 120-day period. The directive follows a report that underscored the lack of human resources and technological inefficiencies plaguing the regulator. Seckelmann, while recognizing the SPA’s regulatory achievements and market engagement, pointed out that the agency is severely understaffed. “The SPA needs more personnel to efficiently oversee the entire gambling market,” he noted, reflecting conversations with insiders at the agency who consistently express concerns over staffing levels.
The allocation of Brazil’s gambling tax revenue is another area of concern. Currently, operators are subjected to a gambling tax rate of 12% on gross gaming revenue (GGR), which is set to increase incrementally, reaching 15% by 2028. Recent figures from the Federal Revenue Service indicate that the licensed gambling sector generated BRL8.8 billion in tax revenue over 11 months. However, the extent to which these funds will bolster the SPA’s regulatory endeavors remains uncertain.
Compounding the SPA’s challenges is high staff turnover, with frequent personnel changes within the agency reported by Seckelmann. This instability complicates the SPA’s efforts to tackle the illegal market effectively. “It’s difficult to fault the SPA for not being more effective against the illegal market given their staffing constraints,” Seckelmann stated, adding that while the SPA’s work to date has been commendable, improvements are necessary, particularly in sanctioning non-compliant operators and curbing illegal activities.
The SPA responded to iGB’s inquiry, affirming that it is considering the TCU’s recommendations to rectify current limitations. An SPA spokesperson stated, “Since its inception in 2024, we have continuously sought improvements in both personnel and technological systems, incorporating contributions and observations from the TCU into our resource allocation assessments.”
Resource constraints are not unique to the SPA; other regulatory bodies face similar issues. The National Telecommunications Agency (Anatel), responsible for blocking illegal gambling sites, also grapples with funding shortages. Since the market’s official launch in January 2025, Anatel has reported blocking over 18,000 illegal sites, yet financial constraints limit broader enforcement efforts.
Looking ahead, Seckelmann suggests that Brazil’s gambling tax revenue could potentially double if the government intensifies its fight against the illegal market. However, the government’s proposal to introduce a 15% tax on player deposits is seen as a controversial move that could drastically reduce channelization, potentially driving it below 20%. “Such a measure could severely impact the market,” Seckelmann warned.
As the Brazilian gambling landscape evolves, the SPA’s ability to strengthen its regulatory framework will be crucial. Future developments will depend on the Ministry of Finance’s response to the TCU’s directives and whether adequate resources are allocated to empower the SPA in its regulatory role. Stakeholders will be watching closely as the timeline for implementing these changes unfolds, with the effectiveness of enforcement efforts remaining a key area of focus.
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