Brazil's Ministry of Finance (MF) has issued a crucial deadline for betting companies operating in the country. As of October 1, 2024, operators who have not requested authorization from the Ministry's Prizes and Betting Secretariat (SPA) will have their operations suspended. This new mandate is part of a broader effort to regulate the betting industry ahead of the official launch of the fixed-odds lottery market, scheduled for January 1, 2025.
Suspension for Non-Compliant Betting Operators
The new ordinance, SPA-MF Ordinance No. 1,475/2024, was officially published in the Official Gazette of the Unionon September 17, 2024. It sets forth that from October, only betting operators who have applied for authorization by September 30, 2024, will be allowed to continue operating until the end of the adaptation period in December 2024.
This means that from October 1, operators who have not filed their authorization requests through the Ministry’s betting management system, SIGAP, will be considered illegal. These companies must halt their operations and will only be able to resume once they have secured the necessary authorization from the MF.
Brazil’s regulated betting market is set to go live on January 1, 2025, marking a significant shift in the country's gaming landscape. The Ministry of Finance is working to ensure that only companies complying with the newly established rules, including Law No. 13,756/2018 and Law No. 14,790/2023, will be allowed to operate within this regulated framework.
During this transitional period, the Treasury Department will review the first wave of applications submitted by betting companies and determine which operators will be permitted to continue their activities. Approved companies will be required to pay a grant of R$30 million by the end of 2024 to finalize their licensing. Failure to meet these requirements could result in operators being excluded from the market when it officially launches.
The move to regulate the betting sector comes amid increased scrutiny of the industry. Secretary of Prizes and Bets, Regis Dudena, emphasized the importance of these measures in combatting illegal activities within the sector.
“We will maintain the adaptation period until the end of December only for those who have already demonstrated that they want to act in accordance with the law, in accordance with Brazilian rules. Many police operations involving companies that operate in the betting market in a criminal manner have come to light. This was the way we found to not wait until January to start separating the wheat from the chaff," Dudena stated.
The primary goal, according to Dudena, is to protect bettors from companies using the betting sector for fraudulent activities and money laundering. He noted that the industry’s transition period is not an excuse to violate existing laws, such as the Money Laundering Law (Law No. 9,613/1998) and the Financial Crimes Law (Law No. 7,492/1986). The Ministry of Finance will take these laws into account when evaluating authorization requests.
Upcoming Deadline for Authorization Submissions
All betting companies currently operating in Brazil must submit their authorization requests by 11:59 p.m. on September 30, 2024. Companies must also provide detailed information about their trademarks and the websites they operate during the transition period. Launching new market in January 2025, all authorized operators must use a Brazilian domain name, ending in ".bet.br," further solidifying the country's efforts to regulate the sector.
For operators who fail to meet the authorization deadline, there are strict protocols in place. These companies will have until October 10, 2024, to allow their customers to withdraw deposited funds from their accounts. After that date, the Ministry will work with various authorities, including the Ministry of Justice and Public Security, the Central Bank of Brazil, and the National Telecommunications Agency, to ensure that illegal operators are taken offline.
SPA-MF to Monitor Compliance
The SPA, in collaboration with other governmental authorities, will be responsible for monitoring the market and enforcing compliance with the new regulations. Companies that attempt to continue operating without authorization after October 1 will face severe penalties, including potential legal action.
As Dudena highlighted, police operations have already uncovered numerous cases where betting companies were involved in fraudulent activities, including money laundering. He reiterated the government's commitment to quickly addressing these illegal activities before the regulated market officially opens in January 2025. "Our goal is to protect the mental, financial, and physical health of bettors by preventing companies from using sports betting and online games as a tool for fraud and money laundering,” he said.
Brazil’s stringent measures reflect its commitment to establishing a well-regulated betting industry, safeguarding both operators and consumers. As the countdown to the January 2025 launch of the regulated market continues, companies operating in Brazil have until September 30, 2024, to comply with the new rules or risk being left behind. The Ministry of Finance’s emphasis on consumer protection and legal compliance signals a new chapter for Brazil’s betting sector, one aimed at eliminating fraud and ensuring responsible gambling practices.
Source:
''A partir de outubro, Fazenda suspende funcionamento de empresas de apostas que ainda não solicitaram autorização'', Ministério da Fazenda. September 17, 2024.
