The Brazilian government has taken a decisive step in regulating its betting industry, approving 71 federal licenses for online operators as the country moves toward launching its regulated market on January 1, 2025. Regis Dudena, head of the Secretariat of Prizes and Betting (SPA), confirmed the progress during a December 10 meeting, noting that these operators have satisfied most requirements laid out by the Ministry of Finance.

Strict oversight and regulatory progress:

Of the 114 companies that applied for licenses earlier this year, 71 have been authorized to proceed, with 16 already paying the R$30 million (US$5 million) concession fee. These payments have generated a total of R$480 million (US$80 million) for the Ministry of Finance. Companies must meet additional requirements, such as securing financial reserves and system certification, to finalize their licenses.

“Seventy-one companies have already been notified by the Ministry of Finance,” Dudena stated, as reported by Games Magazine Brazil. “They have 30 days from the date of notification to comply with these final requirements.”

The SPA’s rigorous approach includes taking down illegal operators. Since the October 1 application deadline, over 5,000 unauthorized websites have been removed, with further action expected in collaboration with law enforcement and telecommunications agencies.

The SPA remains vigilant against illicit activity during the transition period. Dudena highlighted that some applicants continue to operate illegally, often exploiting regulatory gaps. For instance, certain companies exceeded domain limits or utilized fake CPFs (Brazilian Individual Taxpayer Registrations) for operations.

“From January 1 onward, all companies operating in Brazil will be national entities established under Brazilian law,” Dudena explained. “We will know who the shareholders are, who the ultimate beneficiaries are, and who the executives are.”

The ministry is also addressing concerns over advertising aimed at minors. One incident involved a soccer team’s under-17 squad being sponsored by a betting company. Upon notification, the company withdrew the sponsorship.

A clear path to licensing:

The licensing process, which began in May, requires companies to submit documents verifying their financial integrity, criminal records, and other compliance measures. After an initial review, approvals are further scrutinized by the Ministry of Sports for sports integrity compliance. The Ministry of Finance then finalizes the process by requiring certification of betting systems and payment of the concession fee.

Notable operators like Superbet have already achieved milestones, such as securing an eCOGRA certification for compliance in cybersecurity, fair play, and anti-money laundering measures. This certification positions them at the forefront of Brazil’s regulatory landscape.

While many operators are advancing through the regulatory framework, others have opted out. Such high-profile names as Betway and Vera&John have withdrawn, citing profitability concerns. However, global leaders like Flutter Entertainment see Brazil as a promising market. Analysts predict Flutter could grow its market share from 10% to 25% within five years.

Despite progress in the online space, legislation for land-based casinos and bingo halls continues to face delays. The Senate recently postponed voting on a key bill, pushing discussions into 2024.