Brazil Publishes Licensing Requirements for Gambling Operators

On 21 May 2024, Brazil’s Ministry of Finance’s Secretariat of Prizes and Betting published Ordinance SPA/MF nº 827, establishing the regulatory framework for gambling operator licensing. This Ordinance lays out the general rules for the authorization procedure, including the required documentation and applicable deadlines, marking another vital step toward the long-expected launch of the country’s regulated gambling market.

The Licensing Process Allows Substantial Flexibility

According to the Ordinance, only legal entities incorporated under Brazilian law as limited liability companies or corporations with headquarters and administration in Brazil may apply for a license to operate fixed-odds betting. The authorization, valid for a five-year term, requires a payment of BRL 30 million ($5.82 million). Existing legal entities in Brazil must comply with these new regulations by 31 December 2024.

Licensed operators can manage up to three commercial brands through electronic channels under a single authorization. Operators can request to operate more than the three permitted brands, requiring an additional authorization fee (BRL 30 million), an extra financial reserve (BRL 5 million), and a further BRL 15 million ($2.91 million) contribution to the share capital.

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

Brazil Regains Control over Its Gambling Industry

The Ordinance specifies that authorization requests must include documentation proving the legal, tax, and labor compliance, as well as the financial and technical qualifications of the company. If a request gets denied due to insufficient or fraudulent documentation, the applicant may file an administrative appeal within ten days of receiving the notification, ensuring transparency and accountability.

Entities that submit their authorization requests within 90 days of the Ordinance’s publication are guaranteed to have their approval published by 31 December 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 aims 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 burgeoning gaming market, giving the country much-needed control over its gambling sector.