Sports Betting, E-cigarettes and the Illusion of Prohibition

The debate over banning online betting in Brazil is resurfacing at a sensitive moment in the public discourse, marked by simplistic solutions to complex issues.

In this article, Thiago Iusim, founder and CEO of Betshield Responsible Gaming, analyzes the parallels between the electronic cigarette market and the ‘Bets’ sector, highlighting how attempts to eliminate an activity by decree tend to push it into informality.

According to him, the Brazilian experience shows that prohibition does not eliminate markets — it merely reduces the State’s ability to control them and increases risks for consumers.

Brazil has seen this movie before.

There is a magic solution that always seems to return to public debate, especially in election season, whenever an issue becomes politically inconvenient: ban it.

The logic is seductive. In the political narrative, the issue disappears. In real life, it simply moves elsewhere.

E-cigarettes make that point painfully clear.

Vapes have never been authorized in Brazil. They have been officially banned since 2009. In theory, they should not exist. In practice, they are everywhere, sold through social media, messaging apps, marketplaces, street vendors, and small retail shops, with no sanitary controls, no effective oversight, and no real guarantee of origin.

Prohibition did not eliminate the market.

It only eliminated the possibility of surrounding that market with rules.

A recent CNN report on the surge in e-cigarette seizures helps show the scale of the problem. Brazil did not get rid of vapes. It simply pushed the market into an environment where the state lost the capacity to control it.

The state banned it. Organized crime applauded.

That experience helps explain the current debate around online betting in Brazil.

Bets existed long before Law 14,790/2023. For years, Brazil lived with an active market operating online and from abroad, with no local tax collection, no regulatory oversight, and no effective consumer protection tools.

The activity did not emerge because of the law. The law emerged because the activity already existed.

Regulation was the rational response. It was the way to bring an already existing market into a controllable framework, with licenses, concession fees, user identification, anti-money laundering requirements, advertising rules, and player protection mechanisms.

And yet, just eighteen months later, public debate is once again flirting with the same simplistic solution applied to vapes: the fantasy that prohibition would make the activity disappear.

By now, Brazil should know better.

In the case of betting, the country had chosen a different path: regulate in order to control. Protect consumers. Protect the broader economy.

To now return to prohibition as a response to a market that already exists would be more than a regulatory mistake.

It would be a historical contradiction.

Or perhaps simply the most comfortable expression of a certain kind of public moralism that would rather push an activity into the shadows than acknowledge its existence.

In political discourse, prohibition can sound like victory.

In practice, it often functions as morally comfortable packaging for rushed and politically convenient decisions.

This is nothing more than electoral fantasy. And this time, no one will be able to say they did not know how the story would end.

Thiago Iusim
Founder and CEO of Betshield Responsible Gaming