Minas Gerais court orders refund in sports betting pyramid scheme

The Court of Justice of Minas Gerais (TJMG) has ordered a man in Varginha to return R$ 20,000 to a client after determining that his sports betting operation was actually a financial pyramid scheme.

The victim had invested the funds based on promises of fixed monthly returns of 60% in the first month and 30% in subsequent months. When the operator ceased communication after the first payment deadline, the victim sought legal recourse.

While a lower court initially dismissed the case as an unenforceable gambling debt, the 11th Civil Chamber overturned the decision. Judge Mônica Libânio Rocha Bretas ruled that the promised returns were “absolutely disconnected from any market reality” and that the scheme was a disguised financial pyramid. The court emphasized that such schemes are null and void, requiring the return of funds to prevent unjust enrichment.