Federal Regulation Brings New Era to Brazil Sports Betting
Estimates from the Ministry of Finance indicate that the measure will raise up to R$12 billion per year.
BRAZIL (August 29, 2024) — Starting January 1, 2025, a new era begins for the sports betting market in Brazil. This is the date promised by the federal government for the start of regulated operations of the segment in the national territory.
When the date arrives, it is possible that 113 companies will already have authorization to operate. This is the total number of companies that have shown interest and have already sent the required documentation to the competent bodies.
The so-called “bets” must meet financial and bureaucratic requirements to be able to offer their entertainment services to Brazilians. The requests will be analyzed by the Prizes and Bets Secretariat (SPA) of the Ministry of Finance.
If all companies comply with the rules established in the regulations, according to the ministry, “the Ministry of Finance could raise up to R$3.4 billion this year, just from the payment of concessions.” Other estimates from the ministry also indicate gains of up to R$12 billion per year with the measure.
Regulation
Until this year, regulated operations in Brazil were restricted to a few state licenses, such as in Paraná, one of the pioneers. With national regulation, the trend is for the segment to gain scale.
The law that allowed sports betting in Brazil was approved in 2018, but it was still surrounded by many doubts. In May of this year, Ordinance 827 was issued by the Prizes and Betting Secretariat of the Ministry of Finance (SPA/MF), which consolidated the rules for the start of operations in the sector with authorization from the federal government. With it came a 90-day deadline for the interested company to gather all the documentation and comply with all the financial requirements of the legislation.
NossaBet, a company that already operates in the regulated market of Paraná, was one of the 113 companies that submitted the necessary documentation. “The list of requirements was very extensive, with details on some points and requirements being published through ordinances by the end of July. But we met the deadline and hope to have the license on the first day,” said legal director Luciana Macorin.
For her, the government initiative brings more legal certainty to the sector and also directly benefits sports bettors. “The rules will bring order to a market that is growing every day, but in an unbridled way. Many people believe that it is a market where you can take risks and create a betting site overnight, but that is not the case. And, of course, the one who suffers the most from this is the bettor himself.”
Among other rules, the federal government requires sports betting companies to have proven net worth and a financial reserve to pay prizes and refund balances if any of them face economic problems. In addition, companies will need to direct all their operations and advertising to an audience over 18 years of age.
“Bets will have to work towards responsible gaming, raising awareness about the problems of gambling addiction. They will have support to increasingly combat betting fraud and prevent small groups from taking advantage of the rest,” Macorin added.
+ Jogo do Tigrinho: government wants to create barriers to prevent compulsive betting
Another requirement brought by Brazilian legislation is the obligation for the company to have a Brazilian partner with at least one fifth of the total capital; that is, 20% shareholding.
Next steps
The government has set a 150-day deadline to analyze the documents of the 113 companies interested in operating sports betting in the country. If any supplements or corrections are needed, the bookmaker will have 30 days to do so. Once everything is in order, the deadline for payment of the license fee will be opened, which will be R$30 million for each company.
Any company can still apply for a license to operate sports betting in Brazil. The deadline, which expired on August 20, was for those interested in operating from January 1, 2025.
SOURCE: SBT News.
Tags: Brazil, Brazilian sports betting
