SPA reveals companies operating in Brazil during transition period

The deadline for operators to submit federal betting license applications in Brazil was 30 September, marking the end of a critical phase in the transition to a regulated gambling market. The Secretariat of Prizes and Bets (SPA) has since revealed the list of brands that are permitted to continue operations until the official launch of legalized betting on 1 January 2025.

As of 1 October, Brazil enters a transition period during which 89 licensed operators will be active in the market. This period precedes the full rollout of the regulated gaming landscape, providing an opportunity for these entities to establish a foothold.

When the 30 September deadline arrived, a total of 181 applications were logged in Sigap, Brazil’s comprehensive betting management system. Each operator was required to inform the SPA of the brands they plan to operate under and the domains they will use for the transition period.

Ultimately, only those operators who were already active in the market prior to the deadline remain eligible. Consequently, the number of active companies has been narrowed down to 89. Each of these operators has paid the BRL 30 million (~£4.2 million/€5 million/$5.5 million) license fee, which permits the use of three branding “skins” per application. As a result, these operators will be able to operate a total of 193 brands up until 31 December 2024.

This list features major international entities such as Kaizen Gaming-owned Betano, Bet365, and Betsson, alongside prominent local brands like EstrelaBet, Aposta Ganha, and Rei do Pitaco. Notably, NSX Group’s Betnacional, Mr Jack Bet, and Pagbet are also included; additionally, Flutter Entertainment’s recent announcement of acquiring a 56% stake in NSX for $350 million underscores the strategic investments being made in this burgeoning market.

Implications for Excluded Brands in Brazil

Brands not included in this list now face a significant sanction: they will be barred from operating. However, they are granted a 10-day period to allow existing players to withdraw their funds. Beginning 11 October, the National Telecommunications Agency (Anatel) will take on the responsibility of blocking sites that are now deemed illegal.

Initially, enforcement measures were expected to commence post-market launch; however, the introduction of Nominative Ordinance No 1,475 has expedited this action to begin as of 1 October.

This deadline has sparked diverse opinions within the Brazilian gaming industry. SPA’s leader Regis Dudena expressed that the move will enhance security for both consumers and reputable companies aiming to operate within legal frameworks. “This measure provides greater security for society and for companies that want to operate properly in Brazil,” Dudena stated. “With this, we protect the mental and financial health of players.”

Potential Challenges from Rio Ruling

Contrary to the expedited enforcement, a ruling from the Supreme Federal Court (STF) on 1 October has introduced potential complications regarding the blocking of non-compliant sites. The STF granted a preliminary injunction to the Rio de Janeiro State Lottery (Loterj), allowing Loterj-licensed brands to continue operations despite their absence from the federal licensing list.

Federal betting regulations No 1,225, No 1,231, and No 1,475 were declared “incompatible” with Loterj’s Accreditation Notice 001/2023, which permits accredited entities to provide public lottery services for a term of up to five years. The suspension of these ordinances means that the Ministry of Finance may face delays in executing site blocks as they await an appeal from the attorney-general’s office challenging the STF’s decision.

SPA Releases State Licensee List

In conjunction with the federal applicants’ list, the SPA has also published a register of companies that have successfully obtained state-level licenses. The SPA previously requested state regulators to communicate details regarding the brands and domains of new state licensees.

These entities are authorized solely to operate fixed-odds betting within their respective state jurisdictions. A total of six state-sanctioned companies were documented, with five situated within the state of Paraná. Among them, Embralote, licensed in Maranhão, joins Paraná-licensed competitors like Betplay and Pixbet, the latter of which has filed for a federal license for three of its brands.

Role of the SPA During the Transition Period

The SPA is now tasked with processing an extensive number of applications as the regulated market gears up for its go-live date on 1 January 2025. At the conclusion of the transition period, the SPA will publish a comprehensive list detailing which companies and sites will be permitted to operate in the legal nationwide market; only those fully compliant with the regulations established during the four-stage rollout will be eligible.

The SPA’s immediate focus will be on the 113 applications received before the 20 August deadline, which guarantees expedited processing for these initial requests by the end of the transition period.

As the industry prepares for its legal transformation, operators that have submitted applications but have yet to commence operations will be permitted entry into the market upon approval of their requests. The SPA has indicated that there are no further deadlines for applications, allowing entities to apply at any time. The SPA will devote up to 150 days to evaluate each application from the date of submission via Sigap.