Brazil Gambling Regulations: All You Need to Know in 2024

Learn about Brazil’s historic gambling law passed at the end of 2023.

Kris Galloway

Head of iGaming Product, Sumsub

The recent law has changed the game in a country where gambling was generally prohibited since the 1940s.

Let’s explore how Brazil’s gaming, betting and gambling platforms should comply with the new regulations and whether foreign operators can enter the Brazilian market.

Does Brazil allow gambling?

Yes. On December 30, 2023, Law No. 14,790, which mainly regulates ‘fixed-odds betting’, was passed in Brazil.

The new law was prompted for several important reasons:

The growing popularity of iGaming and other games of chance in Brazil
Brazil’s budget missing out on major tax revenue from these games
The need to ensure safety, as unregulated gaming and gambling are more susceptible fraud and money laundering
The need to attract investors and major iGaming brands.

Brazil has been one of the most lucrative gray markets for iGaming operators for a long time. Its appetite for gambling is insatiable, with an estimated 20 million Brazillians eagerly anteing up online.

Kris Galloway

Head of iGaming Product at Sumsub

Who’s affected?

Fixed-odds betting operations related to sport events or virtual online gaming events, including:
- Online games which, according to the law, are “an electronic channel that enables virtual betting on a game whose result is determined by the outcome of a future event based on the random generation of numbers, symbols, figures or objects defined in the game’s rules”.
- Fantasy sports. The law defines fantasy sports as those in which “disputes occur in a virtual environment based on the performance of real people. Exploiting fantasy sports may not require prior authorization.”

Who are the regulators?

National Gaming and Betting Secretariat (Secretaría de Apostas Esportivas), which is still being created
Brazil Ministry of Finance, which will authorize the providers under the new bill.

How to comply with Brazil gambling regulations

Fixed-odds betting operations in relation to sport events and online games are now allowed upon licensing from the Ministry of Finance. The license carries a cost of BR$30 million (US$6.1 million) for a five-year validity period.

Brazil gambling, betting and iGaming operators must be headquartered in Brazil, with foreign operators prohibited from offering regulated gambling. This measure aims to ensure the Brazilian government can collect taxable revenue, with operators subject to a revenue tax. Additionally, operators should consider integrity, responsibility, and honesty standards outlined by the Associação Brasileira de Defesa da Integridade do Esporte’s (ABRADIE) and the Instituto Brasileiro de Jogo Responsável (IBJR).

Further requirements for operators include maintaining a minimum share capital and meeting various technical criteria. Notably, players will benefit from a reduced 15% tax on winnings, a significant decrease from the initially proposed 30% tax.

AML compliance for gambling operators in Brazil

Article 35 of Bill 3,626/2023 stipulates that operators must implement measures to prevent money laundering and terrorist financing, reflecting a strong emphasis on security and structural integrity. This will likely require more reputable gray market operators to refine their policies regarding KYC, as well as efforts to analyze betting patterns and user groups to ensure demonstrable AML efforts are in place. This is particularly important as Brazilian regulators audit licensees going forward. We also anticipate strict rules regarding individuals prohibited from betting, such as those with considerable influence on operators, public employees, sportspeople, and more—all of which must be integrated into the KYC process for many operators seeking to enter the market. Let’s not overlook fraud prevention, a crucial aspect that will gain clarity as legislative details unfold. Nevertheless, it demands attention and must be part of the roadmap for companies aiming to comply with the new Brazilian licensing requirements. While the full playbook remains undisclosed, it’s a safe bet that operators will face a gauntlet of stringent KYC checks, iron-fisted AML rules, and, according to legal whispers, potentially hefty fines for any missteps. It’s a whole new game, and Brazil means business.

Kris Galloway

Head of iGaming Product at Sumsub

Responsible gambling in Brazil

In Brazil, authorized operators are mandated to follow Responsible Gambling protocols. This involves instituting measures to deter problematic gambling behaviors, such as self-exclusion mechanisms and stringent deposit limits. Moreover, operators are urged to foster sustainability, encompassing environmental and social dimensions.

To uphold transparency and ethical standards, authorized operators undergo routine audits. These evaluations, carried out by local regulatory bodies, uphold game integrity, enhancing players’ trust in the fairness and transparency of operations.

Penalties for non-compliance

warnings

fines of up to BR$ 2,000,000,000.00 (two billion Reals)

revocation of the authorization

prohibition of obtaining ownership of new authorization for a maximum period of 10 years

prohibition of participating in bidding that has as its object concession or permission of public services, in the federal public administration, direct or indirect, for a period of not less than 5 years

disqualification to act as a director or administrator and to exercise a position in an organ provided for in a statute or in a social contract of a legal entity that exploits any lottery modality, for a maximum period of 20 years.

How Sumsub can help

Brazilian gambling regulations are still not 100% clear, making it difficult to determine which compliance requirements will be in place. However, Sumsub’s Full-Cycle Verification and Fraud Prevention solution can certainly fulfill KYC/AML, CPF check, and fraud prevention, as well as ensure Responsible Gambling, today.

Sumsub’s Full-Cycle Verification and Fraud Prevention solution allows you to:

Securely onboard new players from over 220 countries and territories in less than 30 seconds
Utilize Non-Doc Verification in jurisdictions where it’s accepted
Set red flags rules to identify vulnerable players and ensure Responsible Gaming compliance
Verify proof of identity and proof of address in any language in under a minute
Onboard age-verified gamers only

Sumsub also prevents all gambling-specific fraud in real-time, including: