Brazil Sets End-2024 Deadline for Online Gambling Licenses

Brazil’s New Regulatory Framework for Online Gambling: Operators Given Deadline to Obtain Licenses

Brazil’s New Era of Gambling Regulation

Imagine a world where online gambling is fully regulated, ensuring player safety and market integrity.

Brazil’s Ministry of Finance has introduced a transformative ordinance, setting the stage for a regulated online gambling market. This move is set to reshape the landscape, providing clear guidelines for operators and enhancing protections for players.

Learn about the new regulations, the criteria operators must meet, and the timeline for compliance. Understand how these changes aim to create a safer, more transparent gambling environment in Brazil.

Dive into the details of the ordinance and discover what it means for the future of online gambling in Brazil.

Brazil Operators Have Until End of 2024 to Obtain Licenses

Brazil’s online gambling landscape is undergoing a significant transformation. Operators currently active in Brazil’s grey market environment have until the end of 2024 to obtain regulatory authorisation under a new ordinance published by the Ministry of Finance. This move marks a pivotal shift towards a fully regulated market, aiming to ensure player protection and market integrity.

New Ordinance Sets the Framework

The Ministry of Finance’s Prizes and Betting Secretariat (SPA) published Ordinance SPA/MF nº 827 on 21 May. This ordinance outlines the comprehensive rules and conditions for operators seeking to obtain a licence to operate online gambling in Brazil post-regulation.

The new laws allow operators who have been active in Brazil’s grey market—including some of the largest global operators—to apply for formal authorisation. Any operator that continues to operate beyond the 1 January 2025 deadline without the necessary authorisation will face significant regulatory penalties.

Five Key Criteria for Authorisation

To receive authorisation from the SPA, operators must meet five stringent criteria:

1. Legal Qualifications: Operators must demonstrate compliance with Brazilian legal requirements.
2. Tax and Labour Compliance: Businesses must show adherence to tax obligations and labour laws.
3. Suitability: Operators must prove they are fit and proper to hold a gambling licence, including showing no history of criminal activity or financial misconduct.
4. Economic-Financial Conditions: Companies must demonstrate financial stability and the ability to maintain operations.
5. Technical Standards: Operators must adhere to technical standards that ensure the integrity and fairness of their games and betting systems.

Ensuring Player Protection and Market Integrity

The Ministry of Finance emphasized that these criteria were established to protect players and ensure that businesses have robust corporate governance structures capable of addressing the challenges of the gambling industry.

“These regulations are designed to foster a safe and fair gambling environment, protecting players and ensuring the integrity of the market,” the ministry stated.

Physical Presence and Compliance Requirements

Operators must also establish a physical presence in Brazil and implement effective Anti-Money Laundering (AML) and Counter-Terrorism Financing (CTF) policies. Additionally, they must have responsible gambling (RG) systems, betting integrity programmes, and adhere to good advertising practices.

If these criteria are met and the substantial licence fee of R$30 million (€5.38 million) is paid, operators will be authorised to offer up to three brands to consumers for a five-year period.

Streamlined Application Process

Under normal circumstances, the application process would take 180 days. However, during this transition period, Brazil will allow a shortened 90-day process to expedite the initial round of licensing. The SPA anticipates issuing the first authorisations by the end of the second half of 2024.

Multi-Stage Implementation Plan

The new ordinance is part of a multi-stage process outlined by the SPA to establish a comprehensive framework for the regulated market. The ministry has detailed that this will culminate with the final regulations being issued in July.

The Path Forward for Operators

For operators, the path forward is clear but challenging. Meeting the stringent criteria will require significant investment and commitment to compliance. However, the rewards are substantial, as obtaining a licence will allow operators to legally tap into Brazil’s burgeoning online gambling market.

A New Era for Brazilian Gambling

This regulatory overhaul represents a new era for online gambling in Brazil. By moving away from the grey market and into a regulated framework, Brazil aims to enhance player protection, ensure market integrity, and generate significant revenue for the state.

Industry Reactions

Industry stakeholders have expressed a mix of optimism and caution regarding the new regulations. While the stringent criteria and high licence fees pose challenges, the potential for a stable and regulated market is seen as a significant positive development.

“This is a major step forward for the Brazilian gambling industry,” said an industry analyst. “The regulations will create a level playing field and ensure that only reputable operators can participate in the market.”

Conclusion: Embracing Change and Moving Forward

The introduction of Ordinance SPA/MF nº 827 marks a significant milestone in the evolution of Brazil’s online gambling market. By setting clear guidelines and establishing a robust regulatory framework, Brazil is poised to create a safer, more transparent, and ultimately more profitable gambling environment.

Operators have until the end of 2024 to comply with the new regulations and secure their licences. Those who meet the stringent criteria and invest in compliance will be well-positioned to thrive in this new era of regulated gambling in Brazil.

As the market evolves, continued collaboration between regulators, operators, and stakeholders will be essential to ensure the success of this ambitious regulatory overhaul.