The wheels of progress are turning in the realm of Brazilian betting, as the nation’s Ministry of Finance has elucidated steps towards the implementation of critical regulations for fixed-odds betting. Detailed in an official publication within Brazil’s Official Gazette of the Union, these steps aim to guide the operational aspects of Bill 3,626’s approved regulations. The target is set for the end of July 2024, a date eagerly anticipated by industry stakeholders.
The newly released ordinance institutes the SPA – Regulatory Policy of the Prizes and Betting Secretariat. This entity, operating under the Ministry of Finance, has the mandate to develop and disseminate the forthcoming regulation in accordance with established guidelines. Its primary intentions are to illuminate the legal particulars of the enacted rules and prioritize urgent measures in need of implementation.
According to an official declaration from the Ministry of Finance, “This measure’s main objective is to systematically structure the regulatory agenda for fixed-odd betting in the country and represents considerable progress in the management and supervision of this sector.” The ordinance is credited with offering “legal security, guarantees predictability and efficiency to the regulatory process, and thus solidifies the foundations for a stable and reliable betting environment in Brazil.”
The rollout of the regulation is organized into four distinct stages, each arranged by their level of urgency:
Initially, the regulations to be published will encompass the technical criteria, alongside the payment and security protocols that operators are expected to uphold. Moreover, this stage will unveil the procedures for license applications for those seeking authorization to manage fixed-odd betting services. April is set as the schedule for revealing these specifications.
In the second stage, it is the SPA’s responsibility to publicize policies aimed at thwarting money laundering and terrorist financing, as well as contain the expansion of weapons of mass destruction and other fraudulent activities. Equally crucial in this phase are the rules established to safeguard bettor rights and align with the legal requisites.
The third stage will witness the SPA broadcasting the technical and security prerequisites particular to online gaming. Additionally, this phase will establish protocols for supervising the marketing of gambling activities.
Lastly, the fourth and final stage of regulation release will define procedures relating to the allocation of industry contributions to socially responsible initiatives.
This march towards regulatory clarity comes after a protracted period of anticipation for a definitive framework governing online gambling in Brazil. Hugo Baungartner, VP of global markets at Aposta Ganha, regards the timeline outlined by the Ministry of Finance as practical, contingent upon the harmonious cooperation of other governmental departments. “The schedule is reasonable and doable,” he affirmed. However, he remained cautiously optimistic, citing potential discrepancies in the interpretation of the fixed-odds betting format.
The journey of Bill 3,626 to reach legal affirmation has not been without its challenges. Efforts to exclude igaming from the bill were initially defeated in November, then given the green light the following month, only to have igaming reinstated by the Chamber of Deputies shortly thereafter.
Furthermore, contention ensued concerning the proposed taxation framework for the industry. What was originally an 18% tax on gross gaming revenue (GGR) would have, in practice, amounted to a substantial 30.82% once additional relevant taxes were computed. Relief came in November when revisions brought the rate down to 12%.
With President Luiz Inacio Lula da Silva’s signatory approval of Bill 3,626 in December 2023, there is palpable optimism within the online gaming and sports betting sectors in Brazil, as the country steps into a new epoch where the rules of wagering are clear-cut and the industry is regulated.
