From "paradise" to criminal cases: how the crackdown on Brazil’s iGaming market puts CIS operators in Cyprus at risk
Extremely challenging times are approaching for CIS gambling market participants. Recently, they have established operations through Brazil and directly within Brazil.
However, there has now been a sharp turnaround in the online casino and betting market.
Until recently, Brazil was a veritable "paradise" for gambling market participants: online gaming and betting were legalized, operators obtained licenses without difficulty, foreign operators were operating at full capacity, etc. Now this experiment has effectively been curtailed.
On September 25, Brazilian authorities adopted Measure 1394, which prohibits the operation, offering, brokering, and advertising of fixed-odds betting—with the ban also extending to foreign operators. For some players, the next step may be offshore casinos and bookmakers attempting to target Brazilian audiences outside of national regulation.
Brazilian authorities have already begun blocking illegal websites. Following the ban, a government interagency task force blocked 506 resources.
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Federal police are simultaneously investigating schemes involving illegal casinos, money laundering, the transfer of funds abroad, and the use of shell companies.
Criminal charges against the operators’ owners or managers are expected in the near future, after which Brazil will initiate an international search and subsequent extradition.
A significant portion of the Russian-language gambling industry operating in Brazil has settled in Cyprus. However, relying on the island as an automatic protection against Brazilian claims would be extremely risky.
Therefore, the current reshuffling of the Brazilian gambling market is not just a story about the loss of licenses and clients. For operators who, after the ban, decide to continue working with Brazil, but through offshore companies, the main question now becomes different: where does the attempt to preserve business end and criminal activity begin?
