Navigating Brazil’s New Regulatory Landscape

 

On September 13th, Brazil’s Chamber of Deputies approved the government’s gambling bill, one of the final steps in the long journey to regulate online gambling in Brazil.

Bill 3,626/23 is now with the Federal Senate. While online gambling is now legal in Brazil, further amendments will follow.

Whether you’re looking to diversify from existing licensed markets or expand operations into Brazil, navigating the new regulatory landscape is essential. Business models need to be aligned with the new legislation and staff need training and support to ensure they understand their responsibilities.

In this article, I explore the key points of Brazil’s online gambling regulations and how to ensure your business and team can confidently meet the compliance standards.

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Contents

  1. The Evolution Of Gambling Regulations In Brazil
  2. New Regulations: Sports Betting And Online Casino
  3. Ensuring Regulatory Compliance and Responsible Gambling

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1. The Evolution Of Gambling Regulations In Brazil

Almost all gambling activities have been prohibited in Brazil until recently. In fact, gambling as a concept doesn’t exist in Brazilian law. Instead, the terms ‘game’, ‘game of chance’ and ‘bet’ are used to describe these activities.

A general ban on games of chance was imposed in 1941, with state-owned lotteries, horse race betting and, surprisingly, poker being the only legal gambling activities. Poker was exempt from the ban because, under Brazilian law, it’s considered to be a game of skill and therefore, not illegal. For a brief period, in 1990’s and early 2000s, bingo and slot machines were also permitted, but these were later banned.

The opening up of the Brazilian gambling market started in 2015 with the creation of Lotex, a virtual and land-based instant lottery (sweepstake). However, the Lotex privatisation tender has not been successful with the government failing to attract sufficient bidders.

Then, in 2018, a fixed-odds sports betting lottery model was legalised, with the Ministry of Economy charged with regulating this area of law within four years. Political events in 2022 delayed this and now a version of the sports betting law is included in the new bill. Sports betting in Brazil is now categorised as a lottery and regulated as such.

2. New Regulations: Sports Betting And Online Casino

Bill 3,626/23 legalises online casinos as well as sports betting, although fantasy sports will remain illegal due to a specific exemption in the legalisation.

Key points that you should know include:

  • Foreign gambling operators are barred: the proposed law only allows operators incorporated under Brazilian legislation to offer regulated gambling. However, foreign operators may be able to access this market via a local subsidiary.
  • 12% gambling revenue tax: While the headline tax rate is 12%, once additional taxes such as PIS, Gaming Monitoring Fee, COFINS and ISS, are taken into account, it will be nearer to 20-25% tax on gross gaming revenue (GGR).
  • Responsible gambling: Responsible gambling (RG) messaging is a key tenet of the new legislation with operators required to put measures in place to protect vulnerable players and prevent underage gambling as well as other RG responsibilities.
  • No bonus bets: Operators will not be allowed to offer bonus bets, even as part of a promotion, or offer any credit lines to players.
  • Advertising: Only operators with a licence can advertise in Brazil, and ads must comply with the National Council for Advertising Self-Regulation (CONAR) standards.
  • Broadcast rights for sports: Operators are barred from obtaining broadcast rights for sports.
  • Groups barred from placing bets: Operators’ senior leadership teams, regulators, those involved in sporting events and under 18s are all barred from placing bets.
  • National Secretariat for Games and Betting (SNJA): The Ministry for Finance is establishing a new body to regulate the gambling industry in Brazil called the National Secretariat for Games and Betting (SNJA).

Offshore gambling is not regulated in Brazil. The gambling contract between a Brazilian resident and an operator’s website hosted in the country where gambling is legal is legitimate and subject to the operator’s jurisdiction laws. However, the new legislation includes additional payment rules to prevent offshore gambling. Payment providers must be authorised by the Central Bank of Brazil and players will only be able to transfer funds from their betting account to a bank account that has headquarters and administration in Brazil.

3. Ensuring Regulatory Compliance and Responsible Gambling

With Brazil’s new online gambling regulations reshaping the iGaming landscape, it’s imperative for operators to navigate this evolving terrain with care. Below, I explore the key considerations to ensure your team can confidently meet their compliance responsibilities and support your business’ growth strategy in this market.

  1. Regulatory Alignment

The heart of successful operation in Brazil’s iGaming market lies in aligning your business model with the newly minted legislation. Ensure your operations conform to the requirements set forth in Bill 3,626/23.

  1. Staff Training and Support

Knowledge is power, especially when it comes to compliance and responsible gambling. At iGaming Academy we deliver specialist training programme to empower your staff with a comprehensive understanding of their responsibilities. These can be  tailored to your specific markets and national regulations  to ensure your staff get up-to-date compliance training and stay current with evolving regulations.

  1. Responsible Gambling

The new regulations in Brazil place significant emphasis on responsible gambling. Operators must establish robust measures to protect vulnerable players, prevent underage gambling, and fulfil other responsible gambling obligations. Our training modules can help your team develop and implement these critical safeguards effectively. For an overview of responsible gambling, and AML guidelines, click here.

  1. Advertising Compliance

Advertising in Brazil’s iGaming market is strictly regulated and only licensed operators can promote their services. Advertisements must adhere to the standards set by the National Council for Advertising Self-Regulation (CONAR). Make sure your marketing team and affiliates understand their responsibilities to mitigate the risks of fines and increased regulatory oversight.

  1. Language And Culture

Whether creating ad campaigns or gaming websites for Brazilian players, or developing training content for your Brazilian team, it is essential to localise your content to ensure it engages your audience. Brazilian Portuguese is not the same as the Portuguese language spoken in Portugal, so make sure all your content is localised correctly. Localised compliance training resources are critical to ensure employees understand their responsibilities and obligations under the new Brazilian regulations.

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How The Conexus Group Can Help

The Conexus Group supports ambitious companies looking for growth and opportunity at all stages of the organisational lifecycle. We offer a range of complimentary services for iGaming businesses to support their strategic plans. You can find out more here or get in touch to discuss your specific requirements.

I hope you have found this article useful in navigating Brazil’s new iGaming regulations. If you have any questions or need further information, please don’t hesitate to reach out.

Author: Yuliya Khrenova, Head of Compliance & DPO