Lula Signs Decree to Freeze Illegal Betting Funds as Brazil Widens Three-State Raids

President Luiz Inácio Lula da Silva signed a decree on Friday, June 19 that lets Brazil's Finance and Justice ministries freeze the bank accounts and digital assets of unlicensed betting operators, the sharpest escalation yet in a campaign that already runs in parallel with the country's maturing regulated market. Flanked by Finance Minister Dario Durigan and Justice Minister Wellington César Lima e Silva, Lula posted video of the signing to his official Instagram account. The legal base is the new Anti-Faction Law (Lei Antifacção), which lets the state immediately freeze assets, bank accounts and crypto holdings of companies suspected of links to organized crime. Once due process is complete, the seized money goes to the National Public Security Fund (Fundo Nacional de Segurança Pública) to fund police intelligence, a financing loop that turns gambling enforcement into a revenue source for the agencies running it.

The decree is one of four moves landing in the same week, and they reinforce each other. The operational mechanics are spelled out: when the Secretariat of Prizes and Bets (SPA), the Finance Ministry gambling regulator created in 2024, identifies an unlicensed operator, it issues an auto de constatação documenting the illegal activity, then notifies banks and payment firms to freeze existing balances and halt new transactions within 24 hours. Institutions must confirm compliance within 48 hours. Brazil's central bank is notified at the same time to supervise execution, and a National Monetary Council (CMN) resolution will set the operational rules for blocking the accounts. The Justice Ministry's National Public Security Secretariat (Senasp) then runs the administrative case, notifying the targeted party so it can contest the freeze, with the right to a full defense preserved. "The decree makes it possible for funds linked to illegal bets to be redirected to actions under the Brazil Against Organized Crime program," Lima e Silva said.

Durigan put hard numbers on the scope. "Today we blocked 50,000 illegal sites. We identified roughly 350 operators that are blocked," he said, adding that the next phase targets 37 financial institutions that moved illicit funds. He framed the goal in blunt terms: that anyone "who mobilizes the population's money illegally no longer goes unanswered." The domain figure tracks SPA enforcement that has run since October 2024 under a technical cooperation deal with telecom regulator Anatel, which has blocked more than 50,000 illegal domains, removed 780 social profiles and 306 posts promoting irregular betting, and pulled 190 unauthorized apps. On the consumer side, SPA's centralized self-exclusion platform, live since December 2025, has logged more than 650,000 self-block requests.

The raids and the money trail

The decree did not arrive cold. A day earlier, on Thursday, June 18, Brazilian authorities ran Operation Conto da Sorte, a coordinated cross-state action sanctioned by the Federal Revenue Service and led by the Rio Grande do Norte Public Prosecutor's Office, with prosecutors and police in Pernambuco, São Paulo and Ceará. Officers executed 14 search and seizure warrants, hitting six individuals and seven properties, and seized passports, documents, electronic devices, firearms and roughly R$30,000 (about US$5,400) in cash. SBC Noticias reported an additional R$145 million (about US$26 million) in assets collected. The targets allegedly sit behind a network of 37 companies that processed billions of reais through illicit gambling, many registered under "straw owners," people on welfare or otherwise unable to own a business, used as a facade while the real operators moved money through shell companies and fake addresses. No arrests had been made as of Thursday.

The network traces back to a licensing fraud. SPA, the only body that can issue a federal gambling license, flagged LOTSERIDÓ in 2025, a lottery and regulatory agency that the municipality of Bodó set up in July 2024 and that began handing out gambling licenses it had no authority to grant. Brazil's Supreme Court revoked those authorizations and LOTSERIDÓ was shut down in October 2025, but the companies it had "licensed" kept operating without SPA approval. Official Bodó records show at least one company moved R$4.6 billion (about US$835 million) through its accounts. Durigan put the full scope higher: "There was a movement, at first, of R$50 billion (about US$9.1 billion), due to these 37 companies that operated illegally in the country, and these 14 search and seizure warrants will allow us to determine the exact amounts." The probe also found malicious code inserted into ".gov.br" and ".edu.br" sites to redirect search traffic to illegal platforms.

The fourth piece is fiscal. The Finance Ministry published Resolution MF No. 1.766/2026 in the Diário Oficial da União, in force since Tuesday, June 17, establishing tax liability for those who prop up illegal betting. Financial and payment institutions that process transactions for unlicensed operators, plus the individuals and companies, including digital influencers, brands and advertisers, that promote them, become jointly and severally liable for the taxes owed on the illegal activity and on net prize payouts. SPA and the Federal Revenue Service (RFB) give notified parties 24 hours to take restrictive measures, formalized through an administrative tax procedure with a right to defense. Plínio Lemos Jorge, president of the National Association of Games and Lotteries (ANJL), backed the resolution: "Holding accountable the actors who contribute to the spread and financial sustenance of illegal operations is fundamental to weakening the clandestine market and encouraging bettors to migrate to regulated and supervised environments." He also cautioned that the fight is open-ended: "What works today may stop being effective tomorrow."

What it means for affiliates and operators

For the regulated market, the squeeze on illegal supply is the point. Brazil's licensed sector generated about R$37 billion (US$7 billion) in GGR in its first year after launching on January 1, 2025, taxed at 12% of GGR, and the black market still runs at scale: an LCA study commissioned by the IBJR estimates illegal play at 41% to 51% of total betting, worth R$26 billion to R$39 billion a year, and the IBJR pegs annual tax leakage at R$10.8 billion. Cutting that down lifts the licensed operators that paid R$30 million each for a federal license, which is why ANJL is cheering rather than complaining.

For affiliates and marketing partners, the exposure is direct. Resolution 1.766/2026 names influencers, brands and advertisers as jointly liable for taxes on the illegal activity they promote, extending the joint-and-several liability principle the SPA already applied to operators' affiliate content earlier in 2026. Promoting an unlicensed brand in Brazil now risks a tax assessment, not just a takedown notice, and the legal counterparty list narrows to the federally licensed operators alone. The enforcement playbook here, domain blocking plus payment chokepoints plus criminal referral, mirrors the coordinated takedowns other jurisdictions have run against offshore syndicates, and the precedent in Brazil itself is concrete: the LOTSERIDÓ scheme was caught in 2025, its licenses voided by the Supreme Court, the agency closed in October 2025, yet the companies kept operating until this week's raids, which shows how long unlicensed flows persist after a paper shutdown.

What comes next is enumerated. The CMN resolution must still codify the account-freezing mechanics, Senasp will open administrative cases against the first batch of targets, and Durigan has flagged the 37 financial institutions as the next phase. Conto da Sorte, in the finance minister's words, is "one of the operations that will keep happening in the country." Brazil's Sports Ministry separately launched a responsible-gambling awareness campaign timed to the World Cup, pushing bettors toward licensed platforms.