Brazil creates procedure to recover more than R$1bn in funds linked to illegal betting

Brazil’s Ministry of Justice has established a formal procedure for seeking the forfeiture of more than R$1 billion in blocked funds linked to unauthorised betting operators, adding a new financial enforcement tool to the country’s campaign against the illegal market.

Brazil has created an administrative framework that could ultimately allow more than R$1 billion in funds associated with illegal betting operations to be transferred to the federal government. The new process is set out in Portaria MJSP No. 1,287/2026, dated September 2 and published in the Official Gazette on September 4.

The measure does not mean that the blocked money has already been confiscated. Instead, it establishes the administrative procedure that authorities must follow before seeking a judicial order for forfeiture. According to the Ministry of Justice and Public Security, the potential amount involved exceeds R$1 billion.

The process will be led by the National Secretariat of Public Security (Senasp), through the Directorate for Management of the National Public Security Fund (DGFNSP). Cases will begin with information and documentation submitted by the Ministry of Finance’s Secretariat of Prizes and Betting (SPA), which is responsible for supervising Brazil’s federally regulated fixed-odds betting market.

Once a case is opened, an investigative commission consisting of at least three public officials will examine the documents and evidence before producing a final report. The interested party will have 15 days to present a defence, submit documents, request evidence and identify witnesses. A first-instance administrative decision can also be appealed within ten days, with the appeal considered by the Minister of Justice and Public Security.

Crucially, an administrative decision in favour of forfeiture will not automatically transfer the money to the government. Cases that continue to meet the conditions for forfeiture after the administrative stage will be sent to the Attorney General’s Office (AGU), which will assess the appropriate court action. The funds can only become property of the federal government following a judicial decision.

Money eventually forfeited will be directed to the National Public Security Fund (FNSP). Senasp will be responsible for proposing how the resources should be used, while the new rules state that, where possible, priority may be given to mandatory fund-to-fund transfers to Brazil’s states and the Federal District. Authorities must also report indications of other possible offences discovered during the process, including criminal matters to prosecutors and police and potential tax liabilities to the relevant federal authorities.

The procedure builds on Decree No. 13,033, adopted in June, which established mechanisms for blocking accounts and interrupting financial transactions connected with unauthorised fixed-odds betting. Financial institutions and payment companies can be required to block accounts linked to irregular operators, with the Central Bank overseeing compliance with the financial restrictions.

For Brazil, the new procedure represents another step in a broader shift from simply blocking illegal gambling websites to targeting the financial infrastructure that keeps them operating. The potential recovery of more than R$1 billion would make the measure significant in fiscal terms, but the final amount transferred to the state will depend on the outcome of individual administrative and judicial proceedings. The larger impact may therefore be deterrence: making it substantially harder for unlicensed betting businesses to operate and retain funds inside Brazil’s financial system.