Brazil Establishes Regulatory Framework for Gambling Operator Licensing with New Ordinance

On May 21, 2024, Brazil’s Ministry of Finance’s Secretariat of Prizes and Betting issued Ordinance SPA/MF nº 827, establishing the regulatory framework for licensing gambling operators. This Ordinance outlines the general rules for the authorization process, specifying the required documentation and applicable deadlines, marking a significant step towards the anticipated launch of Brazil’s regulated gambling market.

The licensing process described in the Ordinance allows for substantial flexibility. It specifies that only legal entities incorporated under Brazilian law as limited liability companies or corporations with headquarters and administration in Brazil can apply for a license to operate fixed-odds betting. The authorization, which is valid for five years, requires a payment of BRL 30 million ($5.82 million). Existing legal entities in Brazil must comply with these new regulations by December 31, 2024.

Licensed operators can manage up to three commercial brands through electronic channels under a single authorization. If operators wish to manage more than the permitted three brands, they must obtain an additional authorization, which entails another fee of BRL 30 million, an additional financial reserve of BRL 5 million, and a further BRL 15 million ($2.91 million) contribution to the share capital.

Companies looking to operate fixed-odds betting in Brazil can now submit their applications. The Gaming Authority has up to 150 days to review the submitted documentation and make a decision. After this period, the Authority will notify the applicant to pay the authorization fee, provide any missing information, or issue a denial.

The Ordinance requires that authorization requests include documentation proving the company’s legal, tax, and labor compliance, as well as its financial and technical qualifications. In cases where a request is denied due to insufficient or fraudulent documentation, the applicant can file an administrative appeal within ten days of receiving the notification, ensuring transparency and accountability.

Entities submitting their authorization requests within 90 days of the Ordinance’s publication are assured that their approval will be published by December 31, 2024, provided they meet all legal requirements. The Ordinance also mandates that authorized operators maintain up-to-date documentation throughout the validity of their authorization, with the Gaming Authority able to request proof of compliance at any time.

This new regulatory framework is designed to streamline the licensing process for gambling operators in Brazil, ensuring compliance and integrity within the industry. Legal entities in Brazil will need to meet these stringent requirements to continue or commence their operations in the expanding gaming market, thereby granting Brazil much-needed control over its gambling sector.

By fLEXI tEAM