Legal Brazil betting market launches with 14 full licences granted

On January 1, 2024, Brazil officially inaugurated its eagerly awaited legal online betting market, a significant milestone for the country’s gaming industry. So far, 14 operators have successfully secured full licenses, while an additional 52 companies are operating under provisional licenses, required to address certain compliance issues before they can launch.

This regulatory journey began in November 2018 when Brazil’s national congress first approved legislation for online betting, and it was subsequently enacted into law by then-President Michel Temer in December of that year. It wasn’t until late December 2023 that the Chamber of Deputies provided the necessary final approval for the legislation. Following this, the Secretariat of Prizes and Bets (SPA) introduced regulations in 2024 that outlined the criteria operators needed to meet to obtain a license.

The licensing application window opened in May 2024, with operators required to complete their submissions by August 20, 2024, to meet the targeted launch date. Only those entities that adhered to this timeline have received full authorization to operate.

Operators granted provisional licenses are under a 30-day review period, having paid a licensing fee of BRL 30 million (approximately £3.9 million/€4.7 million/$4.8 million). However, many are facing hurdles, such as delays in the certification of their betting systems. Fortunately, these provisional licenses are eligible for a 30-day extension if supported by certification entities that confirm the need for further evaluation.

Current List of Full Licensees

Corporate Name | Brands
– SPRBT INTERACTIVE BRASIL LTDA: Superbet, MagicJackpot, SuperO
– OIG GAMING BRAZIL LTDA: 7Games, Betão, R7BET
– BOOM LTDA: BetBoom
– LINDAU GAMING BRASIL SA: Fazobetaí, Oleybet, Betpark
– MMD TECHNOLOGY, ENTERTAINMENT AND MARKETING LTDA: Rei do Pitaco, Pitaco
– NSX BRASIL SA: BetNacional, Mr Jack Bet
– APOLLO OPERATIONS LTDA: KTO
– GALERA GAMING ELECTRONIC GAMES SA: Galera.bet
– BOA LION SA: BetMGM, MGM
– DIGIPLUS BRAZIL INTERACTIVE LTDA: ArenaPlus
– ALFA ENTRETENIMENTO SA: Alfa.bet
– BLAC GAMES LTDA: SportyBet, LanceBet
– SEGURO BET LTDA: Seguro Bet, King Panda
– A2FBR LTDA: Betting Exchange, FullTBet, BetBra
– A2FBR LTDA: Pinnacle, Matchbook, and Verdinha

Notably, some prominent operators, including PixBet, BetMotion, and SportsBet.io, have not secured licenses. SportsBet.io has even announced the cessation of its operations in Brazil.

A2FBR LTDA’s multiple licenses allow it to operate six different betting brands, each with the capacity for three separate “skins” or platforms.

Regulation Aims to Address Industry Challenges

Brazil’s path to regulatory compliance has not been without challenges, with significant delays in the legislative process attracting considerable criticism within the industry throughout the latter half of 2024. Regis Dudena, the head of SPA, emphasizes that the country is now poised to create a safer environment for bettors following this comprehensive market regulation.

“The nation is taking a pivotal step in addressing potential issues related to the sector,” Dudena remarked regarding the January 1 launch. “This regulatory framework allows for fixed-odds betting to be monitored and controlled at the state level.” He assured that 2025 would start with clear regulations and enforced compliance protocols that will hold operators accountable.

A Golden Opportunity for Operators

KTO, one of the 14 operators granted a full license, expressed enthusiasm for achieving this feat. CEO Andreas Bardun shared on LinkedIn his excitement over the hard work of his team coming to fruition. “Our primary aim was to be among the first licensed operators in Brazil,” Bardun stated. “This accomplishment is a testament to our dedication, and we look forward to delivering a reliable gaming experience to our customers.”

Additionally, Caesars Sportsbook’s “Big Brazil” has received a provisional license and is awaiting final approval. CEO André Feldman aims to leverage Caesars’ extensive experience in global entertainment to engage bettors responsibly. “We are committed to providing a secure environment for our customers while ensuring all regulations are adhered to,” Feldman remarked. “Caesars is a leader in the sector, dedicated to transparency and responsible operation.”

Key Regulatory Requirements for Betting Companies in Brazil

In 2024, SPA unveiled its betting regulations via various Normative Ordinances, establishing crucial rules for legal operators in Brazil:

• All licensed betting websites must utilize a “.br” domain to facilitate easier identification of licensed versus unlicensed brands.
• In order to prevent underage betting, all customers must register using facial recognition technology.
• Money transfers must only be conducted with accounts authorized by the Central Bank of Brazil; both credit betting and cryptocurrency transactions are prohibited.
• Operators will incur a 12% tax rate on gross gaming revenue (GGR), while additional taxes may raise the effective tax rate to approximately 36%, as reported by the National Association of Games and Lotteries (ANJL). Moreover, there will be a 15% tax on player winnings exceeding BRL 2,824.

The ANJL believes these new regulations will help significantly curtail the black market and mitigate the prevailing negative perceptions surrounding betting in Brazil. “Through transparency and strict adherence to these rules, we anticipate a diminished presence of illegal operators, thus offering Brazilian bettors enhanced protection,” the ANJL asserted.

Furthermore, the ANJL commended the Brazilian government’s initiative to issue provisional licenses, describing it as “sensible and fair,” allowing regulatory bodies to manage authorization requests effectively over an extended timeline. “This measure is essential for the continuation of numerous reputable operators, preventing a mass exodus of customers to illegal platforms,” the organization concluded.