How is Brazil’s gambling sector responding to underage gambling?

The rise of on-line playing amongst minors in Brazil highlights a serious flaw within the public debate as not all platforms function below the identical guidelines. Bauab argues that youngsters entry betting websites by way of unlawful platforms, not regulated ones. Since January 2025, regulated operators have been required to implement strong identification verification mechanisms. Taxpayer quantity validation, doc assessment, facial recognition and proof-of-life verification are a few of them.

Based on him, research that deal with the market as a single entity find yourself distorting the difficulty by failing to differentiate between authorized and unlawful operators. This distinction, he argues, is essential to understanding why minors are nonetheless in a position to place bets. At licensed firms, the KYC course of robotically rejects registrations from customers who’re underage. Within the underground market, nonetheless, a self-declaration of age, or typically not even that, is usually adequate.

Black market can generate greater than BRL40 billion a 12 months

Bauab argues that the know-how accessible as we speak already supplies efficient instruments for stopping fraud and unauthorised entry. Facial biometrics, OCR, cross-referencing with official databases, danger evaluation, machine intelligence, and deep-fake detection make it rather more troublesome to aim to avoid the programs of regulated operators. Information exhibits that 70% of the regulated market undergoes verification by Legitimuz and that the approval charge within the KYC funnel reaches 98.6%, with the youngest demographic concentrated within the 18–24 age group.

Based on Legitimuz’s co-CEO, the true essential subject lies outdoors the regulated atmosphere. Estimates counsel that the unlawful market might generate greater than BRL40 billion ($8 billion) yearly, along with accounting for a good portion of the bets positioned within the nation. He advocates for a coordinated response involving the federal government, regulators, know-how firms, monetary establishments, faculties and households. The measures embody the widespread blocking of unlicensed web sites, enforcement of the Digital Youngsters and Adolescents Statute (ECA), consciousness campaigns, and monetary restrictions on unlawful operators.

The conclusion is that the safety of minors relies upon not solely on technological innovation, but additionally on collaboration between the private and non-private sectors to close down the black market and strengthen the credibility of the regulated atmosphere.

Underage playing in Brazil – Guilherme Bauab

It’s no secret that minors in Brazil attempt to entry on-line playing platforms in artistic methods. Latest trade surveys point out that as much as 11% of Brazilian youth—particularly these between the ages of 10 and 17—have managed to position bets illegally. Whether or not out of curiosity, the phantasm of straightforward cash, or the affect of social media content material, the very fact is that youngsters have been circumventing boundaries that ought to be sturdy sufficient to cease them.

We’re coping with a weak viewers that ought to not have entry to those platforms below any circumstances. And this paints a troubling image for these of us who struggle this every day in our operations. Simply as vital as discovering the solutions is asking the precise query: how are these minors managing to position bets?

However earlier than we search for the reply, we have to make clear an important level.

Not all betting web sites are the identical

Research on minors betting on playing web sites spotlight an actual and regarding development. Nevertheless, the issue with these research is that they deal with the playing ecosystem as a single entity. They don’t distinguish between regulated platforms—which function below the supervision of the Secretariat of Prizes and Bets (SPA) and are required to conduct rigorous identification verification – among the many 1000’s of unregulated platforms that merely don’t confirm anybody. And making that distinction is essential.

Beginning in January 2025, all licensed operators in Brazil are required to carry out full KYC: validation of the taxpayer quantity in opposition to official databases, doc verification, and facial recognition with a proof-of-life examine. If the information or biometrics point out the consumer is a minor, the registration is robotically rejected. There isn’t any “I’m over 18” button, often known as an “age self-declaration,” that grants entry. What exists is know-how—and cutting-edge know-how at that.

When surveys present that as much as 30% of 16 and 17-year-olds use the web to avoid age verification mechanisms, one other query arises. However circumvent what, precisely? A generic self-declaration of “I’m 18” from a back-alley betting website, or a facial biometrics course of with liveness detection from an operator that genuinely cares concerning the security of its customers?

White paper on the profile of Brazilian gamblers

It’s essential to know the distinction between those that simply wish to make a revenue, with out giving a second thought to the particular person on the opposite finish of the smartphone, and people firms that actually take consumer safety severely.

To offer a sensible instance (warning—spoiler alert): subsequent week, throughout the second version of Legitimuz Day—an occasion that may deliver collectively the private and non-private sectors for discussions related to the betting trade in Brazil and world wide—we are going to launch a white paper on the profile of the Brazilian bettor. It presents a singular portrait, primarily based not on self-reported data however on information verified on the time of registration (27 million registered taxpayer numbers and over 400 million identification verifications per 12 months), cross-referenced with official Legitimuz databases and enriched with monetary indicators.

Listed below are some findings that present context for the dialogue, given the ban on minors at regulated betting retailers. The youngest age group within the pattern is between 18 and 24 years previous and accounts for twenty-four.6% of all bettors within the nation. However essentially the most vital determine is the KYC approval charge: 98.6%.

Briefly: when 70% of Brazil’s regulated betting market goes by way of Legitimuz’s verification course of, we’ve got not solely the size to say what works, but additionally the accountability to level out what wants to enhance. And what wants to enhance isn’t within the regulated betting sector—it’s outdoors of it.

Know-how on the entrance traces of this battle

The KYC necessities mandated by Brazilian laws are at present among the many strictest on the earth for the betting trade. These embody facial recognition with proof of life, doc verification in opposition to Brazilian Inner Income Service databases, and cross-checking of economic information to make sure monetary viability (Ministry of Finance Ordinance No. 1,143/2024), monitoring of politically uncovered individuals and Bolsa Família (Brazil’s major federal social welfare and conditional money switch programme) beneficiaries. All of this takes place earlier than the primary deposit is made. And simply as vital: the foundations talked about are important for maintaining minors from making an attempt to create betting accounts.

And one of the vital vital methods to maintain them at bay is to make use of the perfect know-how accessible. Let’s take Legitimuz’s options for instance. Given the greater than 400 million liveness checks we carried out final 12 months—every in below 30 seconds—making an attempt any type of identification fraud is an terrible process.

Verification in milliseconds

With LegitFace (a facial biometrics module that includes clever liveness detection throughout three safety ranges), age verification isn’t only a checkbox. It’s a technological barrier that features detection of deepfakes, injection assaults, and spoofing. It’s validated by extensively recognised worldwide certifications corresponding to iBeta. A minor below the age of 16 merely can’t move by way of this course of utilizing a selfie that doesn’t match the offered doc.

LegitDoc, our doc verification module, performs high-precision OCR, that includes clever doc evaluation and cross-validation with the Inner Income Service. If the doc submitted belongs to a minor, it’s robotically rejected. LegitCheck, our background examine platform, in flip, queries dozens of databases concurrently in milliseconds: taxpayer quantity, AML/CFT sanctions, PEPs, demise information, monetary information, credit score danger, and company affiliations. Once we cross-reference estimated revenue, credit score scores, and deposit patterns, we are able to detect not solely discrepancies but additionally any inconsistencies that point out identification theft or indicators of cash laundering by third events.

And eventually, LegitDevice: our machine intelligence operates as a silent layer previous to any biometric verification—checking geolocation, detecting VPNs, proxies, and Tor, analysing machine fingerprints, and figuring out suspicious browsers.

Briefly, cutting-edge know-how makes life very troublesome for minors who attempt to circumvent regulated operators.

Whereas the applied sciences to deal with this problem exist already and work (very nicely) for operators who observe the foundations, the opposite aspect of this battle is dependent upon the authorities. It’s estimated that the unlawful betting market generates revenues that would exceed BRL40 billion per 12 months—probably greater than the regulated market itself. There are literally thousands of web sites working with no licence, with out KYC, with out taxation, and with none entry controls. And these are the primary gateways for minors to position bets. Moreover, it’s estimated that as much as 51% of all bets positioned in Brazil have been made on unlawful websites; or that 78% of bettors can’t distinguish a authorized website from an unlawful one. Or that 46% of the general public has already positioned bets on unlawful websites.

However maybe the federal government’s greatest incentive to broaden its efforts lies within the public coffers. Unlawful betting leads to annual losses of as much as BRL10.8 billion to the general public coffers within the type of uncollected taxes.

Coordinated entrance

The very fact is that combatting unlawful betting requires a coordinated effort amongst regulators, the market, and the tech sector. Step one is apparent, but it surely must be said. The SPA must step up its efforts to dam unlawful operators—one thing it’s already doing, however at a tempo that is still inadequate given the amount of websites that pop up each week. In the meantime, ANPD (Brazil’s Nationwide Information Safety Company) must carefully monitor compliance with the current Digital ECA (Youngsters and Adolescents Statute), which, since March of this 12 months, prohibits self-declaration as the only real mechanism for age verification. Lastly, large-scale academic campaigns, notably on social media, highlighting the dangers and hurt to which these younger individuals are uncovered may have a big affect.

On the know-how aspect, regulated operators are already main the way in which. Biometric verification, automated doc validation, and proof-of-life checks make it nearly unattainable for a minor to create an account and place bets.

However we have to transcend onboarding: steady conduct monitoring, periodic re-verifications, and alerts for uncommon exercise assist establish accounts which will have been opened utilizing another person’s data.

Consciousness campaigns additionally play an vital function—bettors want to know that an unlicensed betting website doesn’t assure payouts, doesn’t defend their information, and has no dedication to accountable gaming. Moreover, initiatives concentrating on mother and father and faculties should make it clear that curiosity (the primary motivator for accessing betting websites, in keeping with analysis) shouldn’t be innocent when it leads an adolescent into an unregulated betting atmosphere.

Know-how suppliers must take a stand

One other key space is collaboration with cost suppliers. Banks, fintech firms, and Pix operators can (and may) make it harder to conduct transactions and limit monetary flows with platforms not authorised by the SPA, in addition to block transactions by minors with betting platforms.

And eventually, the know-how supplier ecosystem itself must take a stand. KYC, anti-fraud, and age verification options that at present serve the regulated market ought to feed into intelligence databases that assist establish patterns of criminality and help authorities in mapping these platforms.

Dedication to credibility

Within the coming days, to additional this dialogue, we may even launch a podcast devoted to the Digital ECA, that includes consultants in digital legislation, information safety, and regulation, together with those that helped draft the laws. This dialogue goes past compliance. It addresses how age verification serves as a protecting infrastructure for your complete Brazilian digital economic system.

The iGaming ecosystem as an entire—operators, know-how suppliers, regulators, and civil society—should proceed to deal with the safety of minors not as a bureaucratic obligation, however as a non-negotiable dedication that underpins the credibility and way forward for the regulated market in Brazil.

Anybody who desires to know what’s coming subsequent—and who’s main this dialog— is aware of the place to search out us.

Guilherme Bauab is co-CEO of Legitimuz, a Brazilian identification verification and fraud prevention platform.

Legitimuz is a Brazilian IDtech firm specialising in identification verification and fraud prevention. Utilizing proprietary know-how, the corporate combines contextual information, Clever Liveness Detection, and machine intelligence to establish conduct that signifies fraud earlier than it escalates—with out affecting reliable clients.

It has over 150 shoppers, processes greater than 400 million verifications per 12 months, and operates at a capability of 25 liveness checks per second. Dedicated to governance, LGPD (Brazil’s Normal Information Safety Act), and information safety, it holds ISO/IEC 27001, iBeta, and GLI certifications, and has already prevented over R$ 100 million (USD 20 million) in fraud.