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Companies will have to prepare carefully in order to fully capitalise on this multi billion-dollar opportunity. 

A long-anticipated gambling licensing ordinance from Brazil’s Ministry of Finance has finally come, teeing up a multibillion-dollar regulated market to officially open by 2025 by allowing operators to apply for licences to legally offer sports betting and online gaming in a country of more than 200m people. 

According to our , Brazil’s online sports betting and gaming market could reach US$4.9 billion in annual revenue within five years, with the regulated market becoming one of the largest in the world and surpassing the likes of Australia, France and New Jersey. Thus, it’s unsurprising that as Brazil opens its doors to a regulated gambling market, stakeholders are keen to understand the new lay of the land as it continues to evolve rapidly.

How far Brazil’s gaming market has come 

After enacting in 2018 to legalise fixed-odds sports betting, Brazil’s slow pace of implementation has moved up several gears since legislation was enacted in late December to expand the regime to also include online gaming and set the stage for a national licensing system.

In recent weeks, officials at the new betting secretariat within Brazil’s finance ministry have started to release a series of implementing regulations covering payments and financial transactions, detailed technical requirements for betting systems, as well as gambling licensing criteria.

Much more is to come for Brazil's gambling regulations, however, with at least seven more regulatory ordinances still planned in order to map out rules and requirements on responsible gaming, casino games, anti-money laundering and enforcement, among other areas.

High barriers to entry

From the law and the initial regulations, it is already apparent that the Brazilian regulated market will certainly not be a light-touch one with low barriers to entry. 

On top of paying an upfront fee of R$30m (approx. US$6m) for a five-year licence, operators will also have to meet minimum capital requirements that also set a high bar. Brazil’s initial technical rules are highly detailed when it comes to data centres and storage, geolocation and ID verification, among various other areas. The supporting documentation required to apply for a licence is also extensive and - in some aspects - unique.

Time is also of the essence as, per the licensing ordinance, only those operators that apply within 90 days are assured of receiving an answer on their application in time to receive a licence before new legal prohibitions on operating or facilitating unregulated betting are now due to take effect. 

Unanswered questions abound

With the licensing process open, several critical policy questions remain unanswered by Brazil’s betting and gambling law and the initial set of regulations.

One such question is what is meant by a “Brazilian” in relation to the requirement for each operator to have a Brazilian that owns at least 20 percent of their share capital. As things stand, the Ministry of Finance has not specified if the “Brazilian” must be an individual or if it could be met via a legally incorporated company.

Public comments by Brazilian officials have also led to lingering doubts over the scope of online casino games that will ultimately be allowed in the regulated market, on the basis that all games must fit within a legal definition of a fixed-odds bet. Another area of uncertainty is what forms of bonuses and incentives will be allowed for Brazilian bettors, despite a general prohibition set by the law.

As the regulatory framework continues to evolve, stakeholders must stay informed to navigate this dynamic environment effectively.

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To help you gain a clearer understanding of these developments, , Betting on Brazil: Preparing For the Regulated Market, to listen to the views of an expert panel including:

• Luiz Felipe Maia, Founding Partner at Maia Yoshiyasu Advogados
• Rafael Marchetti Marcondes, Legal Director at IBJR & Chief Legal Officer at Rei do Pitaco

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