Brazil banks crack down on fraudulent payments to illegal betting
The Brazilian Federation of Banks (Febraban) announced the implementation of strict guidelines for closing accounts used in fraud and for blocking financial flows linked to illegal betting. The move aims to standardize the procedures of financial institutions in the face of suspicious operations related to the iGaming ecosystem, in line with the growing regulatory pressure in the country. The focus prioritizes risk mitigation in instant payments, wallets, and gateways used by unauthorized operators. With this decision, the Brazilian banking sector seeks to close operational gaps that have historically been exploited by scam networks and unlicensed gaming platforms.
According to the disclosed guidelines, banks must apply reinforced criteria for the offboarding of clients repeatedly associated with transactions incompatible with their profile, signs of fraud, or links to betting outside the regulated framework. The measures include the standardization of internal processes to record evidence, notify clients, and report suspicious operations to the competent authorities, in addition to strengthening the monitoring of transfers channeling funds to unauthorized sites. The document also promotes coordination mechanisms with payment institutions and fintechs to prevent the reopening of accounts or the reactivation of payment routes used by the same beneficiaries. On the operational level, a risk-based approach is emphasized, with deeper KYC and AML controls and the use of internal blocking lists and counterparty verification.
Febraban, which brings together the country’s main financial entities, has been a central actor in adopting best practices in security, fraud prevention, and standardization of procedures in the banking industry. The federation coordinates with the Central Bank of Brazil on compliance issues and the evolution of the instant payment system, such as PIX, to increase the ecosystem’s resilience against financial crimes. In the recent past, the guild has promoted campaigns and protocols to mitigate mass scams and digital identity theft, a vector also exploited by clandestine operators. The new guidelines fit into this history of initiatives but with an explicit focus on the intersection between banking, payments, and the online betting segment.
The Brazilian regulatory context has hardened since the enactment of Law 14,790/2023, which established the bases for regulating fixed-odds betting and online gaming, and delegated to the Ministry of Finance, through the Secretariat of Prizes and Bets, the issuance of technical and compliance regulations. In parallel, the infrastructure for preventing money laundering and terrorist financing requires financial institutions to perform transactional monitoring, report suspicious operations, and implement due diligence policies coordinated with COAF. The Central Bank of Brazil, for its part, has strengthened guidelines for payment institutions and supervises the responsible use of PIX against fraudulent schemes, including traceability and preventive blocks when appropriate. In this environment, Febraban’s guidelines function as a bridge between the legal framework and operational execution on the front line of payments.
For the iGaming sector, the implications are direct: licensed operators will benefit from a cleaner and more predictable payment route, while unauthorized sites will face greater friction in processing deposits and withdrawals. Payment providers, acquirers, and fintechs will need to reinforce their onboarding and merchant monitoring models, applying risk segmentation specific to gaming and betting, and verifying the regulatory status of each operator. Affiliates and marketing networks will have to review commercial agreements to ensure traffic is referred only to brands with permission, mitigating exposure to banking blocks. At the same time, banks will need to balance reducing false positives with the duty to report, establishing clear and traceable appeal channels for legitimate clients whose activity is confused with high-risk patterns.
In the future, greater technological integration is expected between banks, payment institutions, and authorities, with lists of authorized and unauthorized operators accessible via APIs for real-time validations. The Secretariat of Prizes and Bets should continue publishing complementary rules and licensing schedules, which will facilitate the creation of whitelists for the payment industry. A strengthening of cross-border cooperation to curb the use of offshore gateways and evasion structures is also foreseeable, in line with trends observed in Europe and Latin America. As Febraban’s guidelines consolidate, the market will tend toward greater formalization, with reinforced investment in compliance technology, behavioral analysis, and strong authentication—elements that will be competitive differentiators for operators and PSPs seeking sustainable scale in the Brazilian market.
Tags: Brasil, Febraban, Illegal betting