Brazil is on the brink of a significant transformation in its online gaming landscape, thanks to the recently published Normative Ordinance No. 1,207 in the Official Gazette of the Union. Released on Wednesday, July 31, the ordinance establishes a comprehensive framework of technical requirements for online gaming platforms seeking a betting license in Brazil. As the initial 90-day window for license applications draws to a close, the ordinance provides clarity for operators eager to enter the Brazilian market.

Despite the approaching deadline, only five applications have been submitted so far, but industry experts anticipate a surge in interest now that the rules have been finalized. Hugo Baungartner, CCO of Aposta Ganha, remarked that this ordinance is expected to “be the catalyst for the majority of operators to apply.”

Key Regulations for Online Gaming

The Prizes and Betting Secretariat (SPA) has been rolling out regulations since April, with a four-phase rollout concluding at the end of July. Among the new regulations, credit cards and cryptocurrency have been banned for wagering, and a 15% tax will be imposed on player winnings over BRL 2,824 (approximately $547.25).

Normative Ordinance No. 1,207 allows a variety of games, including online slots, card games like blackjack and poker, roulette, and crash games. However, all games must adhere to strict guidelines. Crash games, for instance, must be entirely random and not offer prizes based on skill. The rules stipulate that the prize multiplier’s maximum and minimum values must be clearly displayed, along with the frequency of increases.

The ordinance also sets a minimum Return to Player (RTP) rate of 85% for each game, ensuring that the advertised top prize can be won at least once in 100 million plays. Notably, the Fortune Tiger game, despite recent controversies involving social media promotions, is allowed under the new regulations.

Focus on Security and Player Protection

The ordinance emphasizes the need for strict security measures and responsible gambling practices. Game providers must obtain official certification from an SPA-recognized entity, ensuring that their games meet all technical and safety standards. Certification must be revalidated whenever “critical components” are changed, and operators using third-party platforms must present an integration certificate.

To ensure fair play, all game outcomes must be determined by random events. Online gaming platforms are required to provide a detailed payout table showing all potential winning combinations before players place bets. The tables must be transparent and fair, avoiding misleading information.

Live gaming studios must have a designated location with robust physical security controls. The ordinance mandates continuous surveillance with unobstructed views of all live games, and the footage must be retained for at least 90 days to ensure compliance with rules and procedures.

Thiago Balieiro, vice-president of people and performance at Sorte Online, highlighted the industry’s commitment to responsible gaming, stating that companies are focusing on “anti-money laundering programs” and “prevention of addiction to gaming.” He added, “There are a lot of structures, and I think the regulation is really focusing on this to avoid all the problems that gaming addiction can cause in the population.”.

Source:

Latest ordinance in Brazil gives green light to online games, igamingbusiness.com, August 1, 2024.

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The leading provider of regulatory and business intelligence, powering the global payments and gambling industries, Vixio Regulatory Intelligence, released a new report, highlighting the potential of the online gambling sector in Brazil. Released just in time for the start of the ICE 2024 convention in London, the new Brazil Online Outlook report analyses the potential of the iGaming vertical in the country.

In its report, Vixio delves into the online gambling regulations in Brazil, analyzing strategic processes related to compliance and licensing. Vixio’s report also explores the competitiveness of the iGaming sector in the country along with possible growth opportunities through lotteries or advertising.

Notably, Vixio predicted the possible development of the Brazilian online gambling sector. The company’s report estimated the iGaming vertical in the country may generate $3.7 billion by its third year of operation. Moreover, by year five, the online gambling sector in Brazil is estimated to generate a staggering $4.9 billion.

Back in December, lawmakers in Brazil added a provision for online gambling as a part of legislation that seeks to legalize sports betting in the country. This marked an important step, paving the way for the possible legalization of iGaming activities.

The Success of the Market Is Contingent on Its Regulation

Yet, according to Vixio, the success of the online gambling market is subject to a number of conditions that are yet to be determined. For example, if iGaming operators need to ink deals with local partners the market’s attractiveness may be impacted. A major factor is also the taxation of online gambling, along with license and other fees that may apply for iGaming operators. Whether or not Brazil’s online gambling sector would permit bonuses or other incentives is also imperative when it comes to the attractiveness of the sector.

Mike Woolfrey, Vixio’s CEO, revealed that the market in the country has been a focus for the company over the last 15 years. He said that it is expected that many companies are thrilled to enter the online gambling market in the country, considering the “series of false starts in terms of expansion of land-based casinos and bingo halls over recent years.”

James Kilsby, Vixio’s chief analyst and a co-author of the report, spoke about the importance of the online casino legislation in Brazil. He explained that this legislation “should enable Brazil to realize its potential as a major market on a global scale, with the country set to join the UK and Italy among the largest regulated online gambling jurisdictions in the world while surpassing the likes of Australia, France and New Jersey in the near-term.” Finally, Kilsby outlined that the regulation of the sector will play an important role in its growth and attractiveness.

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The data, technology and broadcast partner that helps connect sports, betting and media, Genius Sports, announced a new long-term extension of its exclusive data partnership with Brazil’s National Basketball League (LNB). The recently announced partnership extension comes ahead of the new basketball season set to launch on October 21, 2023.

The collaboration sees Genius Sports, which is currently the partner of more than 200 basketball federations and leagues across the globe, deliver FIBA LiveStats across all LNB competitions. As a result, the company will be capturing and distributing data such as play-by-play statistics that cater to different sports-focused platforms. As an integral part of all LNB live broadcasts, Genius will also distribute this data to sports betting operators across the globe, powering their live betting offerings.

Another important side of the extended partnership involves safeguarding the LNB from integrity threats and betting-related corruption. Genius will continue to monitor LNB’s competitions and flag match-fixing or other integrity threats. Back in 2016, the company agreed to provide its educational services and 24/7 bet monitoring system for LNB. The complex monitoring system analyses betting odds and market movements, highlighting suspicious betting patterns and activities.

“As one of the largest basketball leagues in Latin America, we’re delighted to extend our partnership with LNB.“

Guilherme Buso, senior account executive at Genius Sports

Guilherme Buso, Genius Sports’ senior account executive, acknowledged that the company is excited to extend its collaboration with LNB, one of the largest basketball leagues for the Latin American region. He spoke about Genius’ innovative technology that will continue to safeguard LNB competitions and tackle integrity threats. Finally, Buso said that the collaboration will help the distribution of official data that powers the global betting and sports vertical.

“This key strategic business partnership between Genius Sports and the National Basketball League helps us achieve a range of commercial goals.“

Rodrigo Franco Montoro, president of the National Basketball League

Rodrigo Franco Montoro, LNB’s president, spoke about the long-term partnership extension, explaining that it complements multiple League goals. He added that the LNB and Genius share a DNA for innovation, explaining that the collaboration will help expand the reach of live game data. Finally, Montoro praised Genius’ capabilities to distribute information and data securely.

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Brazil’s provisional measure No-1182 lays the groundwork for a nationally regulated betting market. However, the planned tax increase of 18% for licensed operators caused significant concern. The IBJR argues that such harsh measures would place unsustainable burdens on law-abiding operators, driving consumers to unregulated and dangerous alternatives. 

Unsustainable Taxes Can Hurt the Regulated Market

The IBJR is Brazil’s premiere organization committed to promoting responsible gambling practices and advocating for a balanced and fair regulatory environment. The authority has been a staunch proponent of the country’s decision to legalize its sports betting market, giving players safe wagering options. However, the organization has repeatedly criticized the shortcomings of Brazil’s upcoming legislation, outlining lawmaker oversights.

Most recently, the proposed 18% tax hike elicited more harsh criticism. The Institute argues that such a significant increase could hinder Brazil’s nascent sports betting industry, hampering its growth and competitiveness with gray market operators. Such a tax burden could cause reduced investments in technology, marketing, and customer support, hurting the regulated sector.

This burden concerns all companies in the segment… as it will impact the entire economic chain derived from the sports betting sector.

Andre Gelfi, IBJR president

According to the Institute, a higher tax burden on licensed operators could increase betting odds and reduce payout rates for players. Such measures would prompt bettors to seek more attractive alternatives in the gray market, where they face almost non-existent protections from fraud or problem gambling.

Brazil Has Achieved Substantial Progress

The IBJR emphasizes that the government should prioritize responsible gambling initiatives and player protection measures instead of imposing burdensome tax rates. By fostering a safe and transparent gambling environment, Brazil can cultivate a thriving and sustainable sports betting industry while safeguarding its citizens from potential harm associated with excessive gambling.

Brasil’s new legislation delivers on that regard, giving regulators and authorities the necessary tools to tackle match-fixing and illegal gambling. The updated regulations also explicitly prohibit people under 18 and other vulnerable groups from wagering, protecting them from unsustainable financial losses. The IBJR’s in-depth familiarity with Brazil’s ongoing gambling challenges and the state of its sports betting sector makes its advice invaluable in creating effective regulations.

While President Lula da Silva’s provisional measure aims to establish a comprehensive regulatory framework for sports betting in Brazil, it is evident that the proposed tax increase requires further consideration and revision. Ensuring the development of a robust and responsible gambling industry requires policymakers to engage in dialogue with industry experts, operators, and responsible gaming advocates, seeking a middle ground that fosters growth and safeguards consumers.

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Global leaders in sports betting have joined forces to establish a new entity in Brazil, the Brazilian Institute of Responsible Gaming (IBJR), seeking to contribute to the ongoing discussion and development of the gambling market in the Latin American country.

‘Collaborate with All Sectors of Society’

The establishment of the new body focused on responsible gaming comes ahead of the upcoming regulation of the sports betting market which is technically called “fixed odds betting” in Brazil. The Federal Government is expected to introduce a new regulatory framework based on law 13.756/18.

Elected president of IBJR, André Gelfi, outlined the new body’s mission “to collaborate with all sectors of society that want to learn more about the industry and understand how it can be harmoniously integrated into the Brazilian economy, as it has in other countries.”

We want to help build a safe regulatory environment for customers while financing the public sector, and creating a sustainable operating environment for companies.

André Gelfi, president of IBJR

Gelfi then noted that IBJR members have seen successful and not-so-successful regulatory regimes and accumulated enough expertise in the field to help the government define the rules for the national market.

With bet365, Flutter Entertainment, Betsson Group, Betway Group, Yolo Group, Netbet Group, KTO Group, and Rei do Pitaco as founding members, the newly-established IBJR has representation from operators active in more than 100 countries.

Sensitive Aspects Require Responsible Treatment

Speaking about markets with successful regulation, Gelfi added that in these countries, “sports betting is seen as a source of entertainment that helps preserve the integrity [of the] sport,” adamant that “the sector’s sensitive aspects, such as compulsive gambling and money laundering,” should be addressed “in a forceful, logical and responsible manner.”

And while the country’s continental dimensions are considered a challenge for regulation, the IBJR believes the size of Brazil should not be viewed as a constraint and is eager to provide a meaningful contribution to the technical aspects of regulation based on the comprehensive experience and global expertise of its members.

“No other country has enjoyed such a favorable environment for the construction of a successful regulation that can be an example for the world,” Gelfi continued, urging the government to use “aspects of countries that have successfully regulated and adapt them to the local reality,” certain that the availability of clear and demanding compliance rules will set the local market on strong footing.

The legal director of IBJR, Rafael Marcondes, commented on the importance of regulation, comparing Brazil with the US as both countries legalized sports betting in 2018. Unlike in the US, where “regulation has been happening quickly… and bringing positive results, … Brazil has fallen behind, allowing the proliferation of companies that are not committed to responsible gaming, which jeopardizes the credibility of the market without providing minimum guarantees to consumers,” Marcondes concluded.

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The newly formed non-profit organization pledged to ensure the future integrity of Brazilian sports by uniting all industry members under a single goal. ABRADIE plans to assess the current situation, identify potential issues, propose recommendations and present the government with an action plan. The organization hopes to encourage meaningful reforms, ensuring a safe and secure betting environment.

Brazil Is Yet to Implement Proper Regulations

The Brazilian government has recently been under substantial pressure to update the country’s sports betting regulation following a series of match-fixing scandals. The lack of proper regulatory oversight means offshore operators reign unchecked, and consumer protections suffer. Brazilian leagues also face significantly higher risks of match-fixing and fraud, putting additional pressure to introduce a solution.

To the rescue now comes ABRADIE, a non-profit organization formed in collaboration with operators Entain, Genius Sports, Rei Do Pitaco, and law firms Bichara e Motta and Maia Yoshiyasu Advogados. Their substantial experience and industry presence will help the new body pave the way toward improved integrity in sports and associated betting.

Improved Sports Integrity Is Vital to a Healthy Market

ABRADIE already has a plan of action, starting with consultations with authorities, operators, and other industry members to assess the current integrity measures. The organization will also focus substantially on education for players and match officials, but its primary goal remains the early detection of suspicious betting behaviors. Genius Sports CCO Chris Dougan stressed the importance of collaboration and expressed optimism regarding ABRADIE’s future impact.

We look forward to working with regulators, members of law enforcement, operators, sports leagues, and other key stakeholders to prevent fraud and protect the integrity of sports.

Chris Dougan, Genius Sports CCO

The sports integrity body’s other founding members were equally as eager, reiterating their commitment to creating a well-regulated and governed Brazilian market. Rei do Pitaco chief legal officer Rafael Marchetti Marcondes noted that a sustainable sports betting market depended heavily on functioning responsible gaming practices. He added that adequate regulations would benefit all parties involved.

Cases that could jeopardize the reputation of the sport… must be monitored and punished, as all stakeholders in the betting market lose out to fraudulent and criminal attitudes.

Rafael Marchetti Marcondes, Rei do Pitaco chief legal officer

ABRADIE enters the scene during a critical time for the Brazilian sports betting market. Despite the complicated political situation, the country continues to make tentative progress toward sports betting legalization. The introduction of a new integrity body should hopefully provide the necessary impetus for the government to introduce proper gambling legislation and reap the benefits of a healthy and regulated market.

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