Ordinance 722 didn’t create a barrier, it drew a treasure map for fraudsters. While 90% of operators focus on meeting the bare minimum, organized fraud networks are already exploiting three specific geographic vulnerabilities that basic compliance overlooks, causing an average loss of R$350,000 (US$65,000) per month for mid-sized operations.
The issue isn’t a lack of geolocation technology. It’s that most platforms use it passively — validating the address at registration, checking the IP at login, and that’s it.
Meanwhile, fraudsters operate freely with VPNs, coordinate multi-location attacks, and execute withdrawals before any anomaly is detected. The difference between regulatory compliance and real protection lies in treating geolocation as continuous intelligence, not as a one-time barrier.
Geolocation as a behavioral fingerprint
A user’s location reveals far more than GPS coordinates. It works as a behavioral signature, exposing inconsistencies that conventional data or financial analysis simply cannot detect.
A player who bets regularly in Curitiba and suddenly logs in from Manaus, followed by a withdrawal attempt minutes later, isn’t just changing cities — their account has likely been compromised. But the anomaly goes beyond distance.
Access frequency, time patterns, devices used in each location, and transaction velocity all form a behavioral pattern. When that pattern breaks without reason, fraud is underway.
Operators that build robust geographic monitoring frameworks solve three critical challenges simultaneously: they ensure regulatory compliance, block organized fraud, and protect legitimate accounts from Account Takeover.
Those that don’t are operationally exposed — regardless of how much they invest in other security layers.
The three vulnerabilities that silently drain revenue
Fraudsters don’t improvise. They identify patterns, test weaknesses, and systematically exploit the same three gaps that most platforms ignore.
These vulnerabilities aren’t complex or difficult to understand — they’re just neglected because many operators treat geolocation as a regulatory checkbox rather than an active anti-fraud intelligence layer.
1. VPN and Proxy Masking: The Invisible Fraud Eating Away at Promotions
Commercial VPNs cost less than R$20 (US$3.70) per month. Residential proxies — which simulate legitimate home connections — are even cheaper on underground markets. With these tools, fraudsters can bypass geographic restrictions and operate as if they were legitimate Brazilian users.
The financial damage is direct and recurring:
* Players from restricted jurisdictions access the platform, creating regulatory risk and possible license revocation.
* Up to 15% of acquisition bonus budgets are lost to fraudulent accounts using IP masking. On a R$1 million (US$185,000) budget, that’s R$150,000 (US$27,700) wasted each month on users who will never become real customers.
* Organized groups coordinate arbitrage between platforms, exploiting odds discrepancies through multiple identities with fake locations.
* Collusion schemes involve several “players” who are, in reality, the same fraudster behind different residential IPs.
The problem worsens with rotating proxies, which change the IP with every request — making tracking nearly impossible for systems relying on static blocklists.
Effective detection requires real-time correlation between IP-derived location and device-native data (GPS, cell towers, Wi-Fi), along with technical signals typical of masking: abnormal latency, suspicious network routes, inconsistent browser configurations.
Without this layer, you’re not protected — you’re merely compliant while fraudsters operate freely.
2. Impossible geographic jumps: the definitive account takeover indicator
When data shows movements that violate the laws of physics, there’s no ambiguity — the account has been compromised.
Typical scenario:
* 2:00 p.m.: login from São Paulo
* 2:05 p.m.: withdrawal attempt from Rio de Janeiro
That’s 430 km in 5 minutes — impossible, even by air. Sophisticated fraudsters, however, are subtler:
* 10:30 a.m.: bet placed in Porto Alegre
* 11:15 a.m.: login and profile change from Recife
That’s 3,100 km in 45 minutes. Still impossible — but the wider interval often goes unnoticed in shallow analyses that don’t calculate the physical plausibility of travel.
The reputational cost is immense. Market data shows that a customer affected by ATO costs 5× more to re-engage than to acquire, and 40% never deposit again. The loss isn’t just the withdrawal — it’s the permanent drop in LTV and the negative publicity that affects future acquisition.
Effective Location Jump systems calculate not just distance but feasible travel time using real-world transport modes. They also analyze the type of activity in each location — e.g., logging in followed by changes to sensitive data (password, email, banking info) raises the risk score dramatically and should trigger an automatic lockout.
Response time determines whether you prevent a loss or merely document it. Detecting an impossible jump at login and freezing the account before any transaction = protection. Detecting it after the withdrawal is processed = loss audit.
3. Simultaneous access: when one account operates from multiple continents
There’s no room for interpretation here. When the same account shows activity in multiple cities or countries at once, it’s being distributed among operators within an organized fraud network.
Recurring patterns:
* Active session in Brasília while another login is attempted from Buenos Aires
* Bets being placed simultaneously from São Paulo and Miami
* Balance checks from three distinct IPs on different continents within minutes
This is the modus operandi of professional networks that monetize stolen accounts. Legitimate credentials are sold or rented on the black market and distributed among multiple fraudsters to maximize exploitation before detection. It also appears in “money mule” schemes, where real users rent their accounts for a share of illicit profits.
Detection requires real-time monitoring of all active sessions. Logging the login isn’t enough — the system must continuously track location throughout the session and cross-reference with others on the same account. Any geographically impossible overlap should trigger immediate, irreversible blocking pending manual review.
Protection architecture: what separates compliance from real security
Effective protection requires three layers working in orchestration:
Device-native geolocation
An IP can be masked — a GPS signal can’t. Ordinance 722 demands accuracy for exactly this reason. GPS, cell tower, and Wi-Fi data create a triangulation that’s nearly impossible to fake, even with sophisticated tools.
Continuous checkpoints along the user journey
Fraudsters are patient. They create accounts, “age” them for weeks, and only then attack. That’s why validation must occur at critical points:
* Registration and authentication: first barrier
* Financial transactions: mandatory validation at deposits and withdrawals
* Bet confirmation: verification before the first bet
* Active sessions: revalidation every 30 minutes of continuous use
Temporal and spatial coherence analysis
Location Jump technologies assess the physical feasibility of movement and trigger automated protocols when impossibilities are detected — eliminating reliance on manual review, which is slow, costly, and ineffective at scale.
What differentiates prepared operators from exposed ones
Brazil’s iGaming market is growing fast — regulation advancing, professionalism increasing, competition intensifying. In this environment, two questions separate leaders from survivors:
Does your current architecture detect impossible geographic jumps, simultaneous logins, and proxy masking in real time with automated blocking?
If your answer isn’t “yes — with full orchestration and zero dependence on manual review,” your operation has a critical exposure. And professional fraudsters already know it.
In the end, the real question isn’t whether your operation complies with Ordinance 722 — but whether it can survive what the ordinance doesn’t cover. These three vulnerabilities aren’t theoretical risks; they’re actively exploited gaps disguised as “operational costs” or “marketing losses” in financial reports. The ultimate question is: was your geographic protection layer designed to pass an audit — or to protect your revenue?
Legitimuz
Legitimuz is an identity orchestration platform specialized in the Brazilian iGaming market. It provides continuous geographic monitoring with Location Jump detection, simultaneous access analysis, and real-time VPN/proxy masking identification. The technology combines device-native geolocation, strategic checkpoint validation, and temporal-spatial coherence analysis to protect operators from Account Takeover, organized fraud, and regulatory violations. Developed for mid and large-scale operators that treat geographic compliance as an active asset protection layer — not just a legal requirement.
Mateus Mendes
Legitimuz CTO
