Brazil issues rules for bettors’ migration to the legal market

Brazil’s New Regulatory Framework for Online Gambling: Ensuring Safe Migration of Player Data and Funds

A recently implemented ordinance in Brazil outlines the critical processes for migrating bettors’ account funds and data to the newly established regulated online gambling market, set to launch on January 1, 2025. This pioneering step, encapsulated in Normative Ordinance No 1,875, was published in the Official Gazette of the Union on November 26 and establishes the groundwork for a secure transition for players moving from unlicensed to licensed operators.

As it stands, up to 93 operators and 205 brands await license approvals from the Secretariat for Regulatory and Licensing of Activities (SPA). Upon receiving these approvals, which are anticipated shortly, operators will be obliged to pay the requisite licensing fees prior to reintroducing their services under full compliance. The migration of player data and funds can only proceed through operators authorized to conduct business during this transitional phase.

A critical component of this migration process is that bettors must actively consent to the transfer of their accounts and data once their chosen operator receives licensing. This necessitates the use of facial biometrics for identity verification, alongside registration of a bank account with a payment institution recognized by the Central Bank of Brazil.

If a bettor declines the transfer of their funds to a newly authorized platform, or if the operator they previously engaged with fails to secure a license, the bettor’s funds must be returned by December 31.

Navigating the Data and Funds Migration for Licensed Operators

Operators keen on migrating player data must submit a formal request to the SPA by December 13. This request must be endorsed by the same legal representative who signed the company’s initial license application and can only be submitted once the BRL 30 million (approximately £4.1 million/€4.9 million/$5.2 million) license fee has been accepted by the regulator.

The SPA has a maximum of 15 days to approve or deny the request, although this period can be extended by an additional 15 days if further information is needed. Operators are responsible for providing a comprehensive list of participating bettors, all of whom must grant their consent for their data and funds to be migrated to the new licensed platform.

Bettors will have until March 31, 2025, to access their accounts on unlicensed platforms to withdraw their funds or consent to their transfer to a licensed operator. Importantly, from January 1, 2025, users will be prohibited from placing bets or accessing operator products until their data and funds have been successfully migrated.

Any unclaimed funds by June 30, 2025, will be redirected to national initiatives, including charities and the Student Financing Fund (Fies), as well as the National Fund for Public Calamities and Civil Defense (Funcap).

Withdrawal Timeline for Bettors from Unlicensed Operators

Operators that fail to secure authorization for conducting business in the regulated Brazilian market are prohibited from transferring bettor data and funds. Furthermore, companies that do not request or receive approval for migration will also be barred from this process.

In such instances, resources from bettors’ accounts must be transferred back to a deposit or payment account that the player previously registered. Reimbursements may occur through the most recently used bank account with the operator during the transition period from October to January.

If the aforementioned means are not viable, entities are required to approach bettors to provide details of an authorized bank account by March 31, 2025. The SPA will retain the authority to requisition information from companies that fail to return funds to bettors, thereby enabling efficient monitoring and regulatory oversight, which may result in potential sanctions for non-compliance.

This comprehensive regulatory approach not only safeguards player interests during the transition to a licensed market but also aligns with global best practices in the gambling industry, enhancing the integrity and trustworthiness of Brazil’s burgeoning online gambling sector.