National Association of Games and Lotteries Criticizes Regulatory Pre-2024 Scrutiny, Defending Operators Against Constitutional and Regional Overreach
The National Association of Games and Lotteries (ANJL) has formally challenged recent investigative actions launched by the Federal Revenue Service (RFB) and the Public Prosecutor’s Office targeting sports betting operations in Recife. The association warned that the ongoing inquiries risk establishing a dangerous precedent for selective enforcement and amount to an unconstitutional attempt to impose a retroactive “back door tax” on commercial activities conducted prior to the formal implementation of Brazil’s updated betting framework.
The Pre-Regulation Legal Void and Structural Realities
While fixed-odds betting was legally authorized in Brazil in 2018, the market did not achieve full regulatory implementation until 2024. During the intervening years, betting operators lacked any dedicated economic activity classification within the Federal Revenue Service, and official reporting channels or tax payment mechanisms for domestic betting operations simply did not exist.
ANJL Legal Director Bernardo Freire emphasized the legal impossibility of taxing a market before the creation of a corresponding tax infrastructure:
“How could you pay taxes before regulation? You couldn’t, because there wasn’t even a tax classification. It is impossible to tax that which did not exist.”
Addressing the corporate architecture utilized by operators during the pre-regulation era, Freire noted that many entities established offices overseas while contracting domestic service providers in Brazil. Winnings were typically funneled through international financial institutions and pool accounts, with international transfers subject to standard financial transaction (IOF) taxes. The association contends that while industry-wide structures relied heavily on international channels, they operated within the bounds of the existing legal void rather than engaging in illicit capital laundering.
Federal Revenue Counter-Perspective and Regional Concerns
Special Secretary of Federal Revenue Robinson Barreirinhas defended the scope of the investigations, offering a contrasting interpretation of historical market activity. Barreirinhas stated that operational evidence demonstrates sports betting infrastructure has been active within Brazil for approximately seven years, predating formal authorization by roughly five years, while operating without domestic tax contributions or regulatory oversight.
Beyond legal disagreements over taxation, ANJL raised sharp concerns regarding regional selectivity, questioning why investigations have heavily targeted prominent brands rooted in Pernambuco and Brazil’s Northeast region. The association highlighted the massive economic footprint of the companies under scrutiny, pointing to major corporate milestones such as Betnacional’s recent merger and acquisition transaction, which generated over R$1 billion in taxes, noted as the largest in Pernambuco’s history, alongside roughly 2,000 direct jobs.
Constitutional Guarantees and Due Process
In the wake of the August 28 operations, ANJL issued a formal statement expressing deep concern over potential violations of constitutional protections. The Brazilian association stressed that all investigations must strictly respect core democratic tenets, including the presumption of innocence, the right to adversarial proceedings, and the fundamental right to a robust defense.
While reaffirming respect for competent judicial authorities and due process of law, ANJL expects the contested measures to be thoroughly reviewed to ensure the sector is judged fairly under the legal framework that governed the market during the relevant period.
