Betano Calls for Increased Enforcement Against Illegal Operators in Brazil
Betano, currently a leading operator in the Brazilian market, is facing ongoing challenges from illegal operators. Ioannis Spanoudakis, Director of Regulatory Affairs at Kaizen Gaming (Betano’s parent company), is advocating for stronger enforcement measures.
Despite the excitement surrounding the launch of Brazil’s regulated online gaming sector earlier this year, concerns persist about the prevalence of the black market, according to Spanoudakis.
He emphasizes the need for increased enforcement to ensure licensed operators can thrive in a fair environment.
Betano was among the first to apply for a license in Brazil last year and is considered a top operator in the regulated market.
Betano’s Early Challenges
Like other licensed operators, Betano has encountered initial hurdles, including adhering to stringent Know Your Customer (KYC) requirements while competing with a significant illegal market. The licensing process has been described as costly and complex, presenting barriers to entry.
Despite the intention that the licensing process would protect players and curb the black market, illegal operators remain active.
Earlier this year, industry experts estimated that the illegal market still accounted for a substantial portion of the country’s monthly gross gaming revenue (GGR).
Spanoudakis asserts that the large black market remains a primary challenge for licensed operators in Brazil.
“Online gaming is a rapidly growing industry that must operate responsibly. A key aspect of this is eliminating the black market and encouraging players to transition to the legal ecosystem.”
He also points out that the proliferation of illegal operators deprives the government of significant tax revenue that could be reinvested in public services, such as prevention and treatment programs.
Despite these ongoing concerns, Spanoudakis acknowledges the progress made since the Brazilian market’s launch.
“Combating the black market will be a complex and lengthy endeavor due to the large number of unauthorized operators,” Spanoudakis states.
“However, many players have already begun transitioning from unregulated platforms to licensed legal operators, which is a positive sign for the future of the Brazilian market.”
Did Regulatory Delays Benefit Brazil?
Brazil’s journey to regulating online gaming involved significant delays, with approximately five years passing between the initial legislation’s approval by the National Congress and its final sanction by the Chamber of Deputies.
Spanoudakis believes this delay allowed Brazil to leverage international experience and best practices, establishing a “comprehensive and largely complete regulatory framework.”
“While the country was relatively late in regulating the market, the delay provided an opportunity to learn from more mature jurisdictions and adopt proven strategies,” he explains.
“Authorities consulted with international operators and responsible gaming experts to shape their regulatory framework.”
KYC Requirements: A Double-Edged Sword
As part of the new framework, the Special Secretariat of Prizes and Betting (SPA) introduced a series of stringent KYC restrictions for operators.
Betano now requires customers to submit their full name, date of birth, and CPF (Brazilian individual taxpayer registry number) upon registration.
Betano then conducts a thorough identity and age verification process, utilizing public and private databases, as well as mandatory facial recognition technology.
Integrating the facial recognition technology process has proven to be one of the biggest challenges, according to Spanoudakis.
“In addition to a high level of technical sophistication, the procedure also demands a seamless user experience to avoid issues during onboarding,” says Spanoudakis.
While KYC requirements are considered “essential” by Spanoudakis, they have also impacted the competitiveness of licensed operators in Brazil compared to the black market, where players do not face the same level of scrutiny.
“Legal operators are investing heavily in robust verification systems, facial recognition technology, and compliance infrastructure, which can create a more complicated and time-consuming onboarding experience,” adds Spanoudakis.
“Meanwhile, offshore operators often offer instant access without identity checks – making them accessible even to minors and vulnerable groups – and creating an illusion of convenience.
This highlights the need for stronger enforcement against illegal operators and public awareness campaigns to help users understand the value of a safer and compliant betting environment.”
Concerns About Over-Regulation and Impacts on the Black Market
Spanoudakis expresses confidence in the current regulatory framework, believing it to be among the best not only in Latin America but worldwide.
His confidence also stems from the SPA’s avoidance of overly restrictive measures seen elsewhere, at least for now. However, with the Senate’s recent approval of new advertising measures, such as restrictions on gambling advertisements and a ban on celebrity endorsements, Spanoudakis emphasizes the importance of balanced regulation.
“Over-regulation can drive players away from licensed operators and push them towards the black market, which undermines the objectives of regulation in the first place,” he says.
Despite the market’s initial challenges, Spanoudakis believes that the arrival of international operators demonstrates Brazil’s attractiveness as a market, as well as the value of the SPA’s regulatory structure.
“There are still challenges, but we recognize that Brazil is undergoing a complete market transformation, and it will naturally take some time for all the elements to fully settle,” concludes Spanoudakis.
“There is a shared understanding among most stakeholders, including operators, authorities, and customers, that a solid regulatory environment is essential for the sector’s long-term growth and effective consumer protection.”
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