Brazil Launches ‘Jogo de Sombras’ Betting Investigation

Investigators suspect that the group established a shell company in Curaçao before Brazil regulated fixed-odds betting. The structure allegedly created the appearance that the platform’s activities were conducted outside Brazil, although companies connected to the group and based in Brazil may have performed the underlying operations.

The inquiry is also examining payment institutions and structured financial transactions used to move funds between Brazil and other jurisdictions. According to the Federal Revenue Service, some money may later have returned to Brazil as payments for services, potentially providing an explanation for the repatriation of funds previously transferred abroad.

Authorities also identified indications that pooled accounts held at fintech companies may have been used to make transactions harder to trace and obscure the ultimate beneficiaries. These allegations have not been established as final findings, and the operation remains an investigation rather than a concluded enforcement decision.

The scrutiny comes during a period in which Brazil has sought to reduce access to unauthorised operators. Earlier in 2026, federal authorities asked Google and Apple to remove unlicensed betting apps from their stores, extending enforcement beyond operators to the digital infrastructure through which betting products reach consumers.

The business group obtained authorisation to operate in Brazil’s regulated betting market from 2025. Investigators nevertheless suspect that betting activity may have been conducted in the country before authorisation and without the required tax payments. They are also examining whether funds used to pay the federal authorisation fee originated from activities conducted before regulation.

The inquiry therefore extends beyond historic offshore arrangements. Federal officials are investigating whether earlier structures were adapted after the regulatory framework took effect to continue facilitating tax avoidance. One issue under review is the possible declaration of fictitious expenses that may have improperly reduced the group’s tax liabilities from the 2025 calendar year onwards.

The scale of the allegations is significant when viewed alongside Brazil’s first full year of regulated betting, during which licensed operators generated BRL37 billion in gross gaming revenue and the Federal Revenue Service collected nearly BRL10 billion in betting taxes. For licensed businesses, the investigation highlights the importance of transparent ownership, documented related-party transactions and auditable cross-border payment flows.

Operation Jogo de Sombras involved 28 Federal Revenue Service officials, ten federal prosecutors, prosecution police and specialist forensic personnel. No arrest warrants were issued. The evidence collected will support further analysis of domestic and international financial flows, possible omitted revenue, the origin of transferred funds and the identity of beneficial owners.

The action follows a separate regulatory intervention in which the SPA suspended 14 licensed betting sites over compliance failures. Although that measure concerned different operators and administrative issues, both developments demonstrate that receiving federal authorisation does not end an operator’s compliance obligations.

Brazilian authorities described Jogo de Sombras as the second major joint operation specifically focused on suspected tax and financial irregularities in fixed-odds betting. Operation Arena, conducted on 13 August, involved 17 search and seizure warrants across five states and a judicial decision allowing the seizure of assets and funds worth up to BRL1 billion.

Alongside the latest searches, the Federal Revenue Service opened 11 tax procedures to examine the identified irregularities. Officials estimate that these proceedings could recover approximately BRL300 million for public funds. The next stage will focus on tracing transactions, testing the commercial basis of declared expenses and determining whether the evidence supports tax assessments or criminal action. For operators and suppliers, the case reinforces the need to retain reliable records that explain every material movement of funds.