Brazil’s Black Market on the Offensive Following Lula’s Ban on Gambling

According to the Bet Legal platform, the recent events in Brazil have catalyzed the illegal gambling market, with more than 415 new illegal gambling websites arriving in the market since Friday, September 25, when Brazilian President Lula da Silva announced Provisional Measure 1,394. Black Market Operators Pounce on Opportunity of Banned Legal Gambling Provisional Measure 1,394 is the President’s unilateral and abrupt decision to effectively kill the gambling industry in Brazil, banning all forms of online wagering with immediate effect. While the decision entered into effect immediately, blocking operators from accepting new customers, there is a 120-day window during which Congress must ratify the measure in order for it to become permanent. The illegal gambling market has not skipped a heartbeat, seizing the opportunity, and 415 new illegal betting sites have been identified by the survey conducted in partnership with Iron Security in just a few days following the measurés announcement. Criticism of President Lula’s measure has been ample, with the National Association of Games and Lotteries (ANJL) stepping forward to warn the President’s office that the measure did little to actually address the risk of illegal gambling, which is only likely to thrive without a regulated market to serve as a counterweight. Commenting on the development, ANJL president Plínio Lemos Jorge stated that the black market would only take advantage of the newfound opportunity and expand its offer proportionately. The ANJL estimates that at least 30 million gamblers will now be left with no alternative other than to turn to the illegal gambling market. Illegal Websites Taken Down – But Operators Adept at Setting up Mirror Domains Following the announcement of the new measure, the government wanted to demonstrate that it is aware of the potential issue, and the Ministries of Justice and Finance took down 506 websites in the immediate wake of the measure’s announcement. However, this may prove a poor way to address the issue at hand, as black market operators have had years of experience dealing with ISP blocks, with most of them running mirror domains or having backup copies set up only to offer them to their players once a website is taken down. The windfall from Lula’s decision is significant, although most experts estimate that a permanent disruption is not likely, as Congress is not going to just rubber-stamp the President’s measure, taken without consent from lawmakers. Regardless, Brazil’s iGaming and sports betting market has already taken a hit, with licensed operators set to lose from the measure – no matter how long it lasts.