Brazil Banned Credit Cards and Crypto for Betting Operators

Brazil has just made a big step towards making gambling sector more organized and regulated. The country has banned the use of credit cards and cryptocurrency, disallowing operators to accept those methods from bettors. What would be the outcome of such regulation, and how the local market feels about these rules? Keep reading to find more.

New Rules Coming into Effect

New rules in Brazil are set up by Regulatory Policy of the Prizes and Betting Secretariat (SPA) and the ministry of finance on 18 April. The official document is Normative Ordinance No 615.

The new policy comes right after the first phase of four-stage regulation disclosed by the ministry of finance. This is also connected to the implementation of Bill 3,626, famous like Law 14,790, signed by President Luiz Inacio Lula da Silva back in Dec 2023. This first phase will last by the end of April which will be followed by related regulations around payments and security.

Prescription of the Rules

As per new regulation, there are certain obligations that both bettors and operator have to follow if they want to provide services in the Brazilian market. One of the most important instructions is that payments via crypto, credit cards, payment slips, and cash are not allowed. Moreover, all bets and related transfers could be executed only through operators’ and users’ accounts which have been endorsed by Central Bank in the country.

It is also mentioned that betting operators cannot allow payments from third parties. There is also an order about banning any kind of intermediary service between the operator and player. As for the payments earned, players should get them within 120 minutes.

Increasing Awareness of Habits

Going forward with new rules in Brazil, operators are obliged to set up a virtual account for their bettors. Such accounts should entail more details about users and their habits, which will also lead to better management of financial details.

When it comes to structure of these accounts, those will include details about player’s betting history over the last 36 months, the full number of open wagers and the total balance. However, brands are not allowed to approve compensation on bettors’ accounts.

It is also worth mentioning that operators have to manage liquidity risks. One of the related measures is taking care of setting a financial reserve at the minimum amount of R$5m (£765,915/€895,350/$953,597). The amount must be kept at a financial institution approved by the Central Bank of Brazil as federal public bonds.

Source:

“Credit cards and crypto banned under Brazil payment rules”, igamingbusiness.com, April 18, 2024.