Brazilian Betting Operators Must Comply with New AML Rules Before 2025 Licensing Regime

Operators seeking a Brazilian betting license have been informed that they must comply with new anti-money laundering (AML) regulations before the new licensed regime begins in January 2025. Brazil's Ministry of Finance has issued an ordinance outlining the AML responsibilities for operators, requiring compliance by the end of this year. Currently, only two groups—Superbet and Betano—have applied for a license during the 90-day application window that closes next month.

Ordinance SPA/MF No 1,143, according to the ministry, is based on international guidelines for preventing and combating money laundering, financing of terrorism, and the proliferation of weapons of mass destruction. Under these new rules, betting agents must implement policies for identifying and classifying the risk of customers who wish to register. This requirement extends to all parties involved in the operation of fixed-odds betting agents, including employees and suppliers. The ordinance also mandates that betting agents report suspicious transactions to Brazil’s financial intelligence unit (COAF).

Operators are required to assess the compatibility between a bettor’s economic and financial capacity and the operations associated with them. Additionally, they must verify the status of any politically exposed persons (PEPs) and their close associates in accordance with COAF rules.

The money laundering ordinance represents the second major development in Brazil’s four-step process towards finalizing regulations for regulated betting and gaming. The first step, published in May, outlined the technical, payment, and security requirements for licensees. However, this regulatory process appears to be behind schedule. The technical ordinance was released in May, a month after the ministry’s initial April deadline. The AML rules, originally due for release in May, were delayed, leaving licensees still awaiting technical and security standards for online gaming and further details on monitoring gambling advertising. Processes for allocating industry contributions to socially responsible causes were supposed to be published in July, completing the regulatory framework.

Despite the current slow pace, a rush of Brazilian license applications is still anticipated. Gaming operators active in Brazil must secure a license by the end of 2024 to avoid penalties starting January 1, 2025. This timeline was established in plans published in May, which initiated an "adjustment period" for compliance with the regulatory framework for sports betting and igaming. Companies that submit their applications within 90 days of the release of Ordinance 827 will be prioritized for assessment.

Authorized operators will receive a license valid for five years upon payment of a BRL30m (£4.6m/€5.4m/$5.9m) fee and will be permitted to offer gambling services through three skins. Although only two groups have applied so far, industry stakeholders expect a surge in applications once the final regulations are published. Hugo Baungartner, Chief Commercial Officer of Aposta Ganha, emphasized the importance of the new rules for providing clarity, stating, “They’re making sure labs that are approved for the Brazilian market know exactly how to certify the games included in the ordinance.”

By fLEXI tEAM