How Online Gaming Disrupted Brazil’s Unstoppable Mafia Lottery System

Taiza Carine da Costa experienced her initial exposure to wagering when she was merely 9 years old.

Raised in the dilapidated outskirts of Rio de Janeiro, her godparents would send her down the street, a handful of coins in hand, to bet on a beloved lottery that, while unlawful, has been an integral aspect of Brazilian life for over a hundred years.

This practice remained with her and, as an adult, she began wagering daily on the game, where players stake bets on animals represented by various numbers. Much like countless Brazilians, whenever she envisioned an animal in her dreams, she interpreted it as a cue to bet on the lottery, referred to as “jogo do bicho” — or animal game — in Portuguese.

“If I dream, I wager,” declared Ms. Costa, 37, a vendor of clothing.

However, recently, Ms. Costa has been drawn to another form of gambling that is available at her fingertips 24/7: a virtual slot machine that offers substantial rewards if she can match three symbols.

Tigrinho, or Little Tiger in Portuguese, replicates a well-known Chinese slot game and has led the surge as mobile betting applications have skyrocketed in popularity since Brazil permitted digital gambling in 2018. Ms. Costa engages with Little Tiger every day, and her gambling habits — along with her losses — have escalated as a consequence. She believes that she has lost approximately $80,000 over the past two years on the app.

“It’s challenging to quit,” she remarked.

Online gambling options, ranging from digital casinos to soccer bets, have ignited a sensation in Latin America’s largest country, prompting a heated discussion — similar to what is witnessed globally — regarding how to regulate the flourishing industry and protect low-income individuals who frequently accrue debts or lose substantial portions of their limited earnings through wagering.

The gambling craze is also posing a threat to Brazil’s animal lottery, which has connections to violent gangs and has been an unwavering part of popular culture since its inception in Rio de Janeiro in the 1800s and its subsequent proliferation across the nation.

Although numerous attempts to crack down on the lottery and the criminal organizations overseeing it have failed, the traditional game now seems to be facing an existential crisis as fewer Brazilians are willing to physically place bets with a local bookmaker.

Digital substitutes — offering larger jackpots and endless opportunities — now accumulate more than $23 billion in bets annually, roughly ten times that of the animal lottery, according to the Legal Games Institute, a nonprofit organization that analyzes gambling in Brazil.

While the traditional game has six draws each day, online gaming is continuous.

“The Brazilian gambler now possesses a casino in his pocket,” stated Magno José Santos de Souza, the president of the institute.

Conversely, the animal lottery, “hasn’t been able to rejuvenate its supporter base,” remarked Luiz Antônio Simas, a historian from Rio who authored a book about the game.

The game originated in the 1890s by a baron aiming to attract more visitors to his newly established zoo in the Vila Isabel district of Rio. Individuals who purchased admission tickets were entered into a raffle, with an animal drawn at the conclusion of each day.

The lottery quickly surpassed the zoo in popularity, and similar wagering games began emerging throughout the city. Fearing that this game would adversely affect government lotteries, authorities prohibited it three years after its inception.

However, the advancement of the lottery was inevitable. Before long, bookmakers taking bets outside taverns and newsstands became a common sight across Brazil, with the game reaching even the farthest reaches of the Amazon rainforest.

By the 1970s, the animal lottery had transformed into a multimillion-dollar enterprise instigating violent conflicts among Rio’s criminal factions, as they vied for control over territories. The gambling overlords eventually divided the city — and the country — into zones.

To safeguard their illegal ventures, lottery moguls bribed judges, politicians, and police officials. In the working-class neighborhoods of Rio, they endeared themselves to the public by sponsoring local soccer clubs, financing extravagant Carnival parades, and distributing Christmas gifts.

“They crafted this playful, enjoyable facade,” remarked Fabio Corrêa, a public prosecutor in Rio de Janeiro heading a task force against organized crime. “They aimed to cultivate an image of benevolent citizens.”

Through the years, the authorities made repeated efforts to dismantle the mafia-controlled lottery, and in 1993, they achieved a significant victory: A judge sentenced 14 lottery leaders to six years behind bars. However, not long after, many of the game’s most influential kingpins were released, free to grow their dominions.

On a recent afternoon in the Vila Isabel area, the birthplace of the animal lottery, three bookmakers — each operating from different corners — accepted bets from regular clients. Few appeared to be younger than 50.

“I always gamble on the pig or the tiger,” stated Germano da Silva, 71, a retired advertising professional. Reaching into his wallet, he revealed an old ticket that netted him $450 the previous week. “My children are unfamiliar with how to play,” he noted. “Whenever they wish to place a bet, they come to me.”

For newcomers, the rules of the lottery can appear overwhelming. Participants wager on combinations of two-, three-, or four-digit numbers, each associated with one of 25 animals, ranging from a cow to a monkey. Bets start at mere cents, but payouts can soar into the thousands of dollars.

Most players in the animal lottery, however, are not placing bets with the intent of becoming wealthy, according to Mr. Simas, the historian. “They desire to win a little cash for a beer at the day’s end,” he commented. “Engaging in the game is part of the street culture.”

In Brazil, a profoundly superstitious nation, wagers in the animal lottery have historically been inspired by dreams, lucky animals, or significant life date events such as birthdays, funerals, or marriages.

“Each individual has their preferred play,”said Nena Coelho, a 60-year-old administrative assistant who was wagering on the canine, motivated by a stray that had followed her companion home.

Although most forms of gambling, such as casinos and slot machines, are prohibited in Brazil, legislators have approved digital games but postponed the creation of definitive regulatory guidelines. Specialists suggest that this delay has paved the way for countless unregulated platforms, some of which are deceptive, to inundate Brazil.

This reflects the experiences of nations like the United Kingdom and the United States, where lawmakers, eager to secure tax revenues, hastily legalized digital gambling but subsequently found themselves scrambling to enforce regulations, stated Lia Nower, head of the Center for Gambling Studies at Rutgers University.

“Most legislators aren’t truly aware that this could be potentially addictive,” Ms. Nower expressed.

Digital games became an immediate sensation in Brazil, a country with 203 million residents and some of the highest internet usage rates worldwide. Platforms claiming to offer a swift escape from poverty quickly soared in popularity among low-income individuals in a nation characterized by significant inequality.

Bright and playful, the apps were frequently endorsed by social media personalities who informed followers they could win tens of thousands in cash on sites that were later revealed to be manipulated. (Some were eventually apprehended, accused of deceiving fans into gambling on unauthorized platforms.)

Brazil’s authorities estimate that nearly 25% of the population has commenced online gambling over the past five years. Brazilians are currently wagering approximately $3.5 billion monthly, with sports betting constituting a significant portion in soccer-obsessed Brazil, according to data from the nation’s central bank.

In a bid to bring the industry under regulation, Brazilian officials initiated the enforcement of a new law this month mandating betting firms to pay a fee and adhere to federal regulations concerning fraud, responsible advertising, and money laundering.

The animal lottery is still prohibited, but the transition to digital betting has created new channels for revenue.

Lottery officials are reportedly utilizing legitimate betting platforms to launder money accumulated from illicit enterprises like the animal lottery, according to authorities.

“They are infiltrating the digital domain,” Mr. Corrêa noted. “They wish to impart an appearance of legality to activities that, ultimately, are illegal in origin.”

Yet, even as many transition away from the animal lottery, some are still reluctant to part ways.

Matheus Resende, 30, recalls his father instructing him on how to calculate probabilities and formulate bets. “He’s the encyclopedia of the animal lottery,” remarked Mr. Resende, a beverage marketer from Rio.

Currently, Mr. Resende is among millions of Brazilians placing digital bets on soccer matches. Nevertheless, he has an affection for the animal lottery and, each week, he visits his local bookmaker as well.

He is aware of the game’s criminal associations, he claims, but he feels a sense of loss witnessing its decline.

“It’s a family legacy,” he stated. “So there’s a certain nostalgia tied to it.”