Proposed betting ad restrictions could blur lines between legal and illegal operators, Grupo Esportes' exec warns

Efforts to tighten advertising rules in Brazil’s betting sector risk undermining enforcement by making it harder for consumers to distinguish licensed operators from illegal ones, a senior industry executive said, as policymakers debate new restrictions.

Hugo Baungartner, Chief Business Officer of Grupo Esportes Gaming Brasil, said proposed limits under Bill 3.563/2024 could have unintended consequences by reducing the visibility of authorized operators without curbing demand.

“If we don't have advertising, how are we going to separate the legal from the illegal? Without it, the bettor loses the reference point to identify who is legal,” he stated, as reported by BNL Data.

His remarks come as regulators also consider changes to the market structure, including extending oversight to the business-to-business segment.

According to Baungartner, proposals under discussion at the Prizes and Betting Secretariat would require licensing across the supply chain, covering services such as games, KYC tools, payment systems, CRM platforms, and responsible gaming technologies. He called the measure strategic in combating the illegal market.

“Within the operation, there are several integrated services, such as games, KYC tools, payment methods, CRM platforms, and responsible gaming systems. The regulation of this ecosystem requires that everyone operate with a license, local structure, and regulatory compliance,” he concluded.

The comments were made during the IAB Brasil Masterclass held on Tuesday, where Baungartner appeared alongside Ricardo D'Ottaviano, Fernanda Meirelles, and Fernanda Maia to discuss post-regulation developments and the challenges of consolidating the framework.

He argued that concerns about the sector’s integrity are still influenced by conditions that existed before formal oversight was introduced. “That period created the perception that the sector lacked rules. The 2025 regulation came with a high standard,” he stated, adding that stricter controls are effective when focused on protecting vulnerable groups and supported by data.

At an operational level, Baungartner described an industry built on layered verification and monitoring systems. He said betting products are subject to multiple audits, including system certification, random number generator validation, and return-to-player checks, in line with practices seen in established markets such as Las Vegas, Monaco, and Macau.

He also pointed to active safeguards within platforms designed to mitigate harm. "We have platforms that track the user's journey, with alerts, suggestions for pauses, and setting limits. These are active protection mechanisms that are already part of the operation," he stated.

The Interactive Advertising Bureau Brasil, which hosted the event, promotes technical standards and best practices across digital advertising. Grupo Esportes Gaming Brasil is part of the EGB Group, a Recife-based technology and entertainment company that has been a member of the organization since January 2026.

Esportes Gaming Brasil operates under a license issued by the Ministry of Finance through SPA/MF, covering its brands Esportes da Sorte, Onabet, and Lottu, which operate nationwide.