Eduardo Ludmer, head of legal at BetMGM, has expressed concern over how the BRL 2.3 billion collected in licensing fees is being allocated, as Brazil continues to face growing challenges in tackling the illegal betting market.
Brazil’s National Telecommunications Agency (Anatel) is reportedly facing a shortage of funding to support its efforts in blocking illegal betting websites.
According to a report by Folha last week, Anatel lacks both the financial resources and personnel needed to enforce blocking orders issued by the Secretariat of Prizes and Bets (SPA), the country’s gambling regulator.
A recent report reveals that Brazil’s National Telecommunications Agency (Anatel) is struggling to enforce site-blocking orders due to budget constraints. The agency has reportedly been affected by federal spending cuts, a situation expected to worsen with a wave of civil servant retirements anticipated in 2026.
This funding shortage poses a serious challenge for Brazil’s newly regulated online betting market, which continues to grapple with the persistent presence of illegal operators. Eduardo Ludmer, Head of Legal at BetMGM, has raised concerns about the allocation of resources, questioning where the approximately BRL2.3 billion (US$416 million) collected in licensing fees has gone. A portion of these fees was intended to support enforcement efforts against the black market.
“You cannot lack resources to enforce the law,” Ludmer told iGB. “Everything ties back to government spending. Public expenditure in Brazil has reached unprecedented levels. Public services, despite significant funding, often fall short. It feels like our industry is not just covering administrative costs, but also shouldering the burden of record-breaking government spending and debt.”
Despite the constraints, Anatel’s Head of Enforcement, Gesiléa Teles, told Valor International that the agency has blocked over 15,000 illegal websites since the market launched. However, Anatel president Carlos Baigorri continues to push for broader enforcement powers to strengthen the agency’s capabilities.
Betting an easy target for government’s economic plans
Brazil’s licensed betting market was recently shaken by a sharp increase in the tax rate on operators’ gross gaming revenue (GGR), rising from 12% to 18%. The 50% increase was introduced through a provisional measure issued on 11 June.
Under Brazilian law, Congress now has 120 days from the date of publication to decide whether to approve the measure and make the higher tax rate permanent.
The government is aiming to eliminate the national budget deficit by the end of 2025. While earlier plans involved increasing the financial transactions tax, political pressure forced a revision of that approach. However, the new alternative—targeting the betting industry—has sparked its own controversy.
Eduardo Ludmer, Head of Legal at BetMGM, suggests that the betting sector is being used as a convenient revenue source to meet budgetary goals, particularly given the political climate and criticism the industry continues to face.
“They’re going after what they perceive as the easier target,” Ludmer said. “They know there are many politicians, especially in the opposition, who are critical of the betting industry.”
He also pointed out the growing complexity of operating in Brazil's regulated market. “Navigating the political nuances and regulatory environment is becoming increasingly difficult in this sector,” he added.
Tax rise could propel illegal betting in Brazil
In reaction to the recent tax increase on licensed betting operators, the Brazilian Institute of Responsible Gaming (IBJR) has expressed concern that the illegal gambling market could expand its share from 50% to 60%, as players seek to avoid higher costs.
The IBJR believes raising the tax burden on compliant operators may prove counterproductive. “The path to greater tax collection isn’t through penalising legal businesses, but by actively cracking down on illegal operations and protecting consumers through effective regulation,” the organisation stated.
Meanwhile, enforcement efforts face increasing strain. Brazil’s National Telecommunications Agency (Anatel), tasked with blocking illegal betting sites, is reportedly struggling with limited resources. Despite calls from Anatel president Carlos Baigorri for greater authority, its current capacity appears insufficient.
Without stronger enforcement, the illegal market is poised to remain a major challenge—undermining both licensed operators and the broader goals of Brazil’s regulated betting framework.
