Brazil Bans Credit Cards for Online Gambling

Source: Freepik

As January 2025 begins, Brazil starts its new stage for online gambling with the implementation of its long-awaited regulatory framework and among the notable changes is the prohibition of credit card usage for transactions in online casinos and sports betting platforms.

This move, which is part of broader efforts to promote responsible gambling, has sparked discussions about its implications for both operators and players and the ban also reflects a growing focus on fraud prevention and consumer protection, also against unregulated casinos, in the rapidly expanding online gambling sector.

Why Credit Cards Are No Longer Allowed

The prohibition of credit cards for online gambling transactions stems from multiple concerns. Firstly, there is the issue of responsible gambling, since credit cards enable players to wager money they don’t have, leading to impulsive betting behaviors and, often, unmanageable debt.

Brazilian regulators saw this as a major factor contributing to financial instability among citizens, particularly those vulnerable to addiction. By limiting payment options to funds readily available, such as those in a bank account or through instant transfer systems, the government aims to create a safer gambling environment.

Source: Freepik

In addition to promoting responsible gambling, banning credit cards also addresses the risk of fraud. Credit card transactions are susceptible to unauthorized use, identity theft, and other fraudulent activities. By removing this payment method, regulators aim to create a safer ecosystem for online gambling, one that minimizes opportunities for scams targeting both players and operators.

New Payment Methods Under the Regulation

With the removal of credit cards, Brazilian online casinos now rely on alternative payment methods that comply with the new laws and these include:

• Pix: created by the Central Bank of Brazil, this option allows transactions to be completed in seconds. Furthermore, Pix is both efficient and secure, making it an ideal choice for online gambling. It also provides full traceability, which is key to ensuring compliance with anti-money laundering (AML) regulations.
• Debit Cards: unlike credit cards, debit cards only allow players to use funds already in their accounts. This ensures that users cannot gamble beyond their means, aligning with the responsible gambling objectives of the regulation.
• Bank Transfers: while not as instantaneous as Pix, bank transfers remain a trusted option for players who prefer traditional payment methods. They offer enhanced security and transparency, which are critical for maintaining trust in the industry.

In response to recent regulatory changes, platforms such as KTO and Betano have exclusively adopted compliant payment methods like Pix for both deposits and withdrawals. This shift ensures transactions are not only secure but also swift, with transfers at a casino taking as little as five minutes.

This information comes from a survey conducted by ENV Media agency that assessed the 10 most popular betting companies in Brazil. The study found that KTO offers the fastest withdrawal times, typically processing transactions within 5 minutes. Betano follows, taking approximately 15 minutes to transfer winnings to players.

Risks of Platforms Still Accepting Credit Cards

While the majority of reputable platforms have adapted to the new regulations, some may attempt to continue accepting credit card payments, often by bypassing domestic rules through international processing channels. Players should exercise extreme caution when encountering such platforms for several reasons, such as:

• Regulatory Non-Compliance: operators accepting credit cards are clearly violating Brazilian law, which is a red flag for their overall reliability. Engaging with these platforms could expose users to risks such as frozen accounts or denied withdrawals.
• Higher Fraud Risks: non-compliant platforms are more likely to lack robust security protocols, increasing the potential for fraud, data breaches, and unauthorized transactions.
• Exploitation of Players: the very platforms disregarding responsible gambling measures may also engage in unethical practices, such as misleading promotions or unfair game mechanics.

The Broader Goal is Responsible and Secure Gambling

By banning credit cards, Brazilian authorities are not just discouraging excessive gambling but also prioritizing the integrity and security of the online gambling environment. The goal is to ensure that players can gamble responsibly, using funds they already have, while simultaneously reducing opportunities for fraudulent activities that could harm both consumers and operators. This approach reflects a balanced effort to promote the growth of the online gambling market in a way that benefits both casino and player.

For players, adapting to these changes means embracing new payment habits and choosing platforms that align with the legal and ethical standards established by the new regulation. By doing so, they can enjoy a safer, more secure gambling experience while contributing to the long-term sustainability of the industry.