Brazil Mandates Joint Liability for Financial Institutions and Advertisers in Illegal Betting Crackdown

2026-06-19

Brazil's Ministry of Finance has enacted Ordinance 1,766, immediately imposing joint tax liability on financial institutions and advertisers that facilitate or promote illegal betting. Financial entities must block transactions within 24 hours of notification, while advertisers face liability without prior notice, all in an effort to curb unlicensed gambling operations.

Brazil’s Ministry of Finance has introduced significant new measures targeting illicit gambling operations, establishing joint tax liability for financial entities and advertisers. Published this week, Ordinance 1,766 outlines the responsibilities of institutions that either facilitate financial transactions for or promote unauthorized betting activities, effective immediately. The primary objective is to curb clandestine operations and suppress the market for unlicensed fixed-odds betting.

Under the new administrative order, financial institutions and payment service providers are now accountable for taxes owed by online betting and gaming companies operating without a federal license. Upon receiving formal notification from the Ministry of Finance, these entities must block any identified transactions related to illegal betting within a strict 24-hour timeframe. Failure to comply will result in them being held liable for the outstanding taxes.

The notification process for financial and payment institutions will be a joint effort by the Secretariat of Lotteries and Betting (SPA) and the Special Secretariat of the Federal Revenue Service of Brazil. These notices will precisely identify the non-compliant legal entity, including its business name and CNPJ, detail the specific financial transactions involved, and name the financial or payment institution holding the account receiving the funds.

Expanding its scope beyond financial facilitators, the ordinance also extends joint and several liability to any individuals or legal entities involved in advertising or publishing promotional materials for illegal betting operations. For this group, a crucial distinction is made: no prior notice will be required before they are held accountable for promoting unlicensed betting websites.

This regulatory update solidifies provisions from Article 6 of Complementary Law No. 224/2025, specifically addressing tax liability concerning unauthorized fixed-odds betting. The liabilities cover not only taxes on the betting operations but also the payment of net winnings to bettors. The formalization of tax liability will occur through administrative tax proceedings, guaranteeing the right to a fair hearing and a full defense for all parties involved.