Brazil is ramping up its efforts to regulate the online betting industry, imposing a crucial deadline for betting operators to comply with national laws. Starting October 1, 2024, all fixed-odds betting companies that have not yet requested authorization from the Ministry of Finance (MF) will be suspended from operating within the country. This move is part of the government’s larger plan to launch a fully regulated betting market by January 1, 2025.

October Deadline for Betting Companies

According to Ordinance No. 1,475/2024, published on September 17, betting companies must submit authorization requests to the Prize and Betting Secretariat (SPA) of the Ministry of Finance by September 30, 2024, to continue operating until the end of the year. Companies that fail to meet this deadline will be classified as illegal and must halt their operations starting in October. However, these operators will have until October 10 to ensure that bettors can withdraw their funds before their websites are taken offline.

Companies that have requested authorization but are not yet operational will need to wait until January 2025 to begin their activities, provided they meet all legal requirements. By then, only fully compliant operators, adhering to the guidelines of Law No. 13,756/2018 and Law No. 14,790/2023, will be permitted to function in Brazil’s regulated betting market.

Focus on Fraud Prevention and Consumer Protection

Regis Dudena, the Secretary of Prizes and Bets at the Ministry of Finance, emphasized the importance of protecting bettors and preventing illegal activities within the betting industry. Dudena pointed out that police investigations have already uncovered companies exploiting sports betting and online games for fraudulent purposes, including money laundering.

“We will maintain the adaptation period until the end of December only for those who have already demonstrated that they want to act in accordance with the law, in accordance with Brazilian rules,” Dudena explained. “Many police operations involving companies that operate in the betting market in a criminal manner have come to light. This was the way we found to not wait until January to start separating the wheat from the chaff.”

Dudena further stressed that existing laws, such as the Money Laundering Law (Law No. 9,613/1998) and the Financial Crimes Law (Law No. 7,492/1986), must be upheld during the adaptation period. The Ministry of Finance will scrutinize the authorization requests closely, ensuring that companies involved in illegal practices are kept out of the regulated market.

License Fees and Requirements

The new regulations also impose strict financial and operational requirements on operators. Companies approved to continue operating by January 2025 will need to pay a grant of R$30 million to the Ministry of Finance by the end of 2024. Additionally, these companies must implement comprehensive measures to prevent fraud, money laundering, and abusive advertising, among other regulations.

Starting in January, all licensed companies will be required to use Brazilian internet domains with the “.bet.br” extension. Companies must provide details of their operating trademarks and websites by the end of September to comply with the transitional guidelines.

As of now, 113 companies have applied for licenses through the Ministry of Finance’s Betting Management System (SIGAP). The SPA is reviewing these applications to ensure all technical and legal requirements are met. Operators who continue to operate without authorization beyond the deadline will face legal action and penalties from the SPA and other governmental bodies, including the Ministry of Justice and Public Security and the Central Bank of Brazil.

A New Era for Betting in Brazil

The upcoming regulation marks a significant shift in Brazil’s approach to online gambling. By enforcing a clear deadline for authorization and implementing strict compliance measures, the government aims to create a safer betting environment free from the risks of fraud and illegal activities. The goal is to ensure that companies operating within the market are fully committed to following Brazilian laws and protecting consumers.

As Dudena emphasized, “Our goal is to protect the mental, financial, and physical health of bettors by preventing companies from using sports betting and online games as a tool for fraud and money laundering.”

By the start of 2025, Brazil is expected to have a fully regulated and transparent betting market, benefiting both bettors and the broader economy. The next few months will be crucial as the country transitions toward this new system, with many operators racing to meet the upcoming deadlines.

Source:

A partir de outubro, Fazenda suspende funcionamento de empresas de apostas que ainda não solicitaram autorização, Ministério da Fazenda, September 17, 2024.

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