Brazil's Ministry of Finance issued a decree on Thursday that sent chills down the spine of illegal gambling platforms. Decree No. 1,766 officially established the joint liability of financial and payment institutions for taxes owed by unlicensed gambling operators—this is not a warning, it is effective immediately. The operational path is extremely specific: the Awards and Gambling Secretariat (SPA) and the Federal Revenue Service issue a joint notice, and the bank or payment institution receiving the notice must restrict related transactions within 24 hours, or else pay the taxes for the illegal platform. On the same day, the decree also reached out to advertising and promotion—any individual or legal entity that advertises or promotes for illegal gambling, without prior notice, is directly held jointly liable. Tightening both lines at the same time is like choking the gray market from both the financial channels and customer acquisition channels.
24-hour countdown: Not a suggestion, but a mandatory enforcement
The core mechanism of Decree No. 1,766 is the implementation of the tax joint liability clause in Supplementary Law No. 224/2025, Article 6. The content of the joint notice is detailed into four mandatory items: the company name and CNPJ registration number, records of identified illegal payment transactions, the name of the financial institution where the payment account is located, and any other information that can help target the objective. Once these four pieces of information are complete, the countdown begins—transactions must be cut off within 24 hours, and if not executed on time, the financial institution will be jointly liable for tax collection with the illegal operator, and this will be formally established through administrative tax procedures, while ensuring the rights of the parties to a hearing and full defense.
The essence of this mechanism is to shift the enforcement chain from "chasing illegal platforms" to "chasing those who provide channels for illegal platforms." PASA's official website previously noted that regulatory layers in several African countries are also discussing the role of payment institutions in combating illegal gambling—the approach of cutting off PayBill for over 50 unlicensed platforms in Kenya last year follows the same logic. However, Brazil has refined the legal level to an immediately executable granularity, and the 24-hour limit completely invalidates delay tactics such as "still studying" or "internal approval."
Advertisers can't escape either: No need for prior notice, directly pursued
Another easily overlooked but lethal clause in the decree points to advertising and promotion. Individuals or legal entities that have advertised for illegal gambling will be directly held jointly liable for tax collection, without prior notice. This contrasts sharply with the financial end's "notify first, then pursue after 24 hours"—indicating that legislators have a lower tolerance for illegal gambling's customer acquisition channels than for payment channels. In other words, the cost of posting an illegal gambling advertisement might be higher than processing a payment transaction for it.
This decree is essentially a foundational-level strike launched by Brazil against the gray area more than a year after the establishment of the licensed market. Legal operators have already invested in high licensing fees, tax burdens, and compliance costs, while illegal platforms offer more tempting payout conditions with zero compliance costs—if the routes for payments and advertising are not blocked, the competition will never be fair. Decree No. 1,766 provides a manual for blocking these two routes from a legal perspective, and it remains to be seen whether the enforcement side can keep up with the legislative side's determination.
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This article is from "PASA-Global iGaming Leaders," a gambling industry news channel:https://t.me/pasa_news
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