Following Brazil’s renewed focus on bringing down illegal betting, both the Brazilian Institute for Responsible Gaming (IBJR) and the National Association of Games and Lotteries (ANJL) backed the measures, describing them as a step forward for legal certainty and market organisation.
Betting, lottery-style products and prediction-style offerings will now not be able to be used as collateral for financial instruments.
Industry bodies argue this closes a potential loophole where operators could repackage gambling as financial products to sidestep Brazil’s licensing regime.
Recent intervention by the National Monetary Council (CMN) has seen Kalshi blocked from trading sporting, political, or entertainment events, with Brazil becoming the latest jurisdiction to blacklist the predictions platform.
IBJR said the move strengthens oversight and prevents the financial system from being used to “circumvent the regulation of the betting sector”.
The group stressed that risk-based products tied to uncertain outcomes should be treated consistently as gambling, regardless of how they are structured or marketed.
The concern is not theoretical. Without tighter rules, trade bodies warn the market could drift to a point where unlicensed or lightly regulated operators gain an advantage over fully licensed lottery and betting providers.
In a recent interview with SBC Noticias Brasil, ANJL leadership echoed the stance around prediction markets in a discussion around illegal activity.
ANJL echoed that stance, framing the decision as a direct response to illegal activity.
“We have to keep evolving, right? This week, I was told that the illegal market is like grass, we have to keep cutting it, and that’s what we’re doing,” said Plínio Augusto Lemos Jorge, President of the ANJL.
“Every day we try, through specialised action, to suffocate and deprive the illegals of their oxygen.”
ANJL: Kalshi pushback a win for the market
ANJL emphasised that if prediction markets are formally allowed in Brazil, they should fall under a dedicated licensing model, similar to existing online betting rules, rather than operating in a regulatory grey area.
This approach has been seen previously in different areas of the US and Europe, while Brazil has been concentrated on an illegal market clampdown for a long period of time.
Despite Brazil’s struggles with the illegal market, Legal Consultant for the ANJL, Bernardo Freire, warned against too much regulation.
“Excessive regulation also hinders progress. Banning things doesn’t help at all,” he said.
“There are international examples that show the limitations of prohibitive models.
“So, any kind of prohibition makes no sense. It’s about studying, analysing, and verifying that the best path is regulation, making the necessary corrections as needed.
“Let’s suppose, for example, that advertising is excessive; then you go there and correct it. It’s necessary to debate based on sound reasoning.”
The debate also highlights the scale of the illegal market challenge. Industry estimates suggest a roughly even split between legal and unregulated financial flows, though user traffic data can skew more heavily toward licensed operators depending on methodology.
Either way, both sides agree the illegal segment remains significant and persistent – an argument which has been bemoaned across the world.
Gambling debate and progression should be normalised
Regulators and operators are increasingly leaning on coordination, including cooperation with telecoms authorities and the use of AI tools, to restrict access to unlicensed platforms, which still won’t lead to a “100% fix”.
Still, stakeholders have acknowledged that enforcement is an ongoing process rather than a one-time fix, and that debate needs to be common practice for the sector.
Pietro Cardia Lorenzoni, Legal Director at the ANJL, concluded: “I think any regulated sector has a responsibility to participate in public debate. Especially our sector, which is complex.
“It’s not like it’s a sector that sells a product or service devoid of any risk. It’s a product that has risk. Compulsive gambling disorder is a reality.
“And we need robust anti-money laundering regulations. So all of this is motivating, even more so since it’s a public service. The point, which is ANJL’s main argument, is that there should be a rational public debate.
“It needs to be reasonable, based on good data, good evidence, and good arguments. And we realise that this is not happening at various times in the Brazilian public debate.
“At various times, we see relevant political actors believing that ending or criticising betting is a universal panacea for all of Brazil’s ills.
“Over-indebtedness, a problem with Brazilian credit, a problem with mental health. And that’s not true.
“Betting is a sector. It’s a relevant sector, worth R$37 billion, but it’s not the biggest, it’s not the most important. And it’s not the universal cause of Brazilian problems.”