Today marks a significant advancement in Brazil’s regulation of online gaming and sports betting as the Prizes and Betting Secretariat (SPA) along with the ministry of finance unveiled new regulatory measures. Published in the Official Diary of the Union, these directives form part of Normative Ordinance No 615. This rollout is the first of a four-phase strategy designed to implement the recently ratified Bill 3,626, also known as Law 14,790, which President Luiz Inacio Lula da Silva approved in December 2023.
The ordinance stipulates a stringent framework for the operation of Brazil’s online gaming and sports betting market, with new payment, technical, and security regulations set to take effect. A notable aspect of the new regulation is the restriction on payment methods; traditional forms such as credit cards, cryptocurrency, cash, payment slips, and cheques are now banned. Instead, all transactions, including bets, withdrawals, and payouts, must occur through electronic transfers between accounts that are specifically authorized by the Central Bank of Brazil. Furthermore, operators are prohibited from accepting payments from accounts not registered in the bettor’s name or from third parties.
In addition to financial transactions, the ordinance also demands transparency and accountability in operations. Operators must not act as intermediaries between players and other operators, although institutions authorized by the Central Bank may hold transactional accounts for operators under certain conditions. This ensures that bettors can receive owed prize amounts within a stipulated window of 120 minutes after winning.
To foster responsible gambling, operators are now required to provide players with virtual accounts displaying extensive details of their betting activities. These accounts will show the player’s betting history for the past 36 months, the total value of open bets, and their financial balance. There are strict prohibitions against operators offering remuneration on any accounts held by the player.
Risk management is another crucial component of the new regulations, with operators needing to maintain a financial reserve of at least R$5 million, held in federal public bonds at an authorized financial institution. This reserve is separate from the operators’ other accounts, ensuring that liquidity risks are appropriately managed.
These regulatory changes, effective immediately, highlight Brazil’s commitment to creating a safe and regulated environment for online gambling. The next steps in the ministry of finance’s agenda include the SPA publishing its fraud policies, which will cover anti-money laundering and counterterrorist financing, among other security aspects. The subsequent phases will introduce monitoring procedures for gambling advertisements and finalize with guidelines on allocating industry contributions to socially responsible causes by the end of July.
This comprehensive approach signifies Brazil’s efforts to fully harness and regulate the potential of its igaming and sports betting markets, setting a robust framework that ensures both industry growth and consumer protection.
The digital transformation in Brazil’s betting sector also paves the way for the adoption of the most innovative technologies across various domains, from payments and loyalty programs to KYC (Know Your Customer) practices. As the industry grows increasingly reliant on digital solutions, the potential for technological advancements in these areas is immense. Saar Alfia, the CEO of Connectika, underscores this potential: “Brazil presents a burgeoning opportunity for innovation in payment solutions, driven by a rapidly growing digital economy and an increasingly tech-savvy consumer base. With a complex regulatory landscape and unique market dynamics, Brazil requires a nuanced approach to financial technology that respects local customs and legislation.” This perspective highlights the critical role that tailored financial technologies will play in adapting to and thriving within Brazil’s unique market conditions.
