Brazil can freeze and seize funds of illegal betting firms

President Luiz Inácio Lula da Silva signed Decree No. 13,033 on June 19, allowing Brazil’s betting regulator to order banks and payment firms to freeze accounts tied to unlicensed fixed-odds betting operators within 24 hours and, after administrative and judicial procedures, forfeit those funds to the state.

The Finance Ministry’s Secretariat of Prizes and Betting (SPA) can issue an irregularity report and a blocking notice when it identifies an unauthorized operator. Banks and payment institutions must freeze related accounts, halt new transactions within 24 hours and confirm compliance to authorities within 48 hours. The Central Bank is notified to supervise the measures and the National Monetary Council (CMN) will issue a resolution to set detailed operational procedures.

The decree treats an account freeze as a precautionary measure, not a final penalty. The National Public Security Secretariat (Senasp), part of the Justice Ministry, opens an administrative process in which operators can present a defense. Only after a final administrative ruling can the Attorney General’s Office take the case to court to seek asset forfeiture. Confirmed proceeds are to be routed to the National Public Security Fund and the decree specifies forfeiture cannot override amounts owed to bettors. The measure implements Article 21-A of the 2023 betting law as amended by Law 15,358 and uses authorities granted by the Anti-Faction Law.

Finance Minister Dario Durigan pointed to an operation conducted June 18 that blocked about 50,000 illegal domains and interrupted roughly 350 operators. Durigan noted, “Those operators moved money through 37 financial institutions, mostly fintechs and payment firms with light supervision.” The SPA has worked with telecom regulator Anatel to take more than 50,000 domains offline since late 2024.

A companion regulation, Portaria No. 1,766/2026, makes banks, fintechs and payment firms jointly liable for federal taxes owed by unlicensed operators when they continue to process transactions for them. Under that rule, federal tax authorities and the SPA can pursue the financial institution directly for taxes due from the illegal operator.

The government has taken other actions in recent months. In April the CMN banned non-financial prediction-market contracts, and the Finance Ministry moved to block platforms treated as unlicensed betting. President Lula has expressed support for returning to a full online-betting ban that would require congressional approval and has pledged to fight illegal operators “by every possible means.”

Each asset freeze must still pass through the administrative process and a potential court step before funds can be seized. The CMN has not yet published the detailed rules banks must follow.