Brazil Enforces Authorization Deadline for Betting Companies

Brazil's Ministry of Finance (MF) has set a critical deadline for betting companies active in the nation. As of October 1, 2024, any operator that has not applied for authorization with the Ministry's Prizes and Betting Secretariat (SPA) will be required to suspend operations. This directive is a significant part of the plan to regulate the betting industry ahead of the launch of the fixed-odds lottery market, expected on January 1, 2025. The latest ordinance, SPA-MF Ordinance No. 1,475/2024, was published in the Official Gazette of the Union on September 17, 2024. According to this, only operators who submit their authorization requests by September 30, 2024, can continue operating through the adaptation period ending in December 2024. From October 1, companies failing to apply through the Ministry's betting management system, SIGAP, will be deemed illegal and must halt operations until they gain the required MF authorization.

Transition Period and Compliance Measures

As Brazil's regulated betting market aims for a January 1, 2025 launch, the Ministry of Finance emphasizes that only legally compliant operators, adhering to laws like Law No. 13,756/2018 and Law No. 14,790/2023, will function within this framework. During the transitional period, the Treasury Department will review applications to determine which companies can continue their operations. Approved entities need to pay a R$30 million grant by the end of 2024 to secure their licensing. Non-compliance could lead to exclusion when the market officially opens.

This regulatory push arises amidst greater scrutiny of the betting sector, with Regis Dudena, Secretary of Prizes and Bets, highlighting the necessity of these measures against illegal operations. "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.

Upcoming Deadlines and Enforcements

All betting companies in Brazil must file their authorization requests by 11:59 p.m. on September 30, 2024. Operators need to provide detailed information about their trademarks and the websites they use. From January 2025, authorized operators must also adopt a Brazilian domain name ending in ".bet.br," reinforcing regulatory efforts. For those who miss the application deadline, strict protocols demand they allow customers to withdraw funds by October 10, 2024. After this, various authorities, including the Ministry of Justice and Public Security, the Central Bank of Brazil, and the National Telecommunications Agency, will work to disable illegal operators.

The SPA, together with other governmental bodies, will oversee compliance, imposing severe penalties for unauthorized operations post-October 1. Dudena underscored the government's commitment to combating fraudulent activities in the betting sector: "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."

Source: ''A partir de outubro, Fazenda suspende funcionamento de empresas de apostas que ainda não solicitaram autorização'', Ministério da Fazenda. September 17, 2024.