TLDR
- Brazil’s Federal Revenue Service launched Operation Conto da Sorte on June 23, targeting illegal betting
- The scheme involved 37 companies and an estimated BRL50 billion ($9.7 billion) in financial movement
- 14 search and seizure warrants were executed across Pernambuco, Ceará, and São Paulo
- Up to BRL145 million in assets were frozen by court order
- The fraud originated from irregular company accreditation by a municipality in Rio Grande do Norte
Brazil Raids Illegal Betting Network Moving $9.7 Billion
Brazil’s Federal Revenue Service launched Operation Conto da Sorte on June 23, targeting a large illegal betting network across multiple states.
The operation was carried out alongside state Public Prosecutors’ offices and revealed a scheme involving 37 companies with an estimated financial movement of BRL50 billion, or around $9.7 billion.
Finance Minister Dario Durigan confirmed the details and stated the government has a zero-tolerance policy toward illegal betting.
Authorities executed 14 search and seizure warrants in the states of Pernambuco, Ceará, and São Paulo. The focus was on gathering documents, digital media, and verifying the real structure of the companies involved.
A court also ordered the freezing of up to BRL145 million in assets. Those funds may be used to compensate for damages caused by the illegal activities.
Shell Companies and Front Men at the Center of the Scheme
Investigators found that the group created dozens of companies involved in gambling, betting, and payment processing.
Many of these companies were transferred to third parties who lacked the financial capacity to run them. Some of those individuals were even recipients of emergency government aid, while the scheme’s actual leaders kept control of the money.
Several companies did not physically exist at all. They were used only to move money through the banking system.
Investigators identified money laundering, tax evasion, purchase of real estate with illegal funds, and failure to transfer net betting revenue as required by law.
How the Fraud Got Started
The scheme began after the City Hall of Bodó, a municipality in Rio Grande do Norte, created an autonomous agency called LOTSERIDÓ.
That agency started accrediting betting companies outside of proper legal channels. Even after LOTSERIDÓ was shut down, the companies continued operating without authorization from Brazil’s Secretariat of Prizes and Bets (SPA).
The case reached the Supreme Federal Court, which ruled that municipalities do not have the authority to authorize gambling or betting operations.
Finance Minister Durigan said the operation is part of a broader push to strengthen partnerships with Public Prosecutors’ offices.
The Federal Revenue Service stated it will keep working to combat fraud involving shell companies, tax evasion, and unpaid taxes.
Operation Conto da Sorte is described as one of the largest actions ever taken against illegal betting in Brazil, with a scheme that reached across the country.
The government said this operation is the first serious step in combating illegal betting and will be expanded to protect the legal iGaming market in Brazil.
