Regulation of gambling in Brazil: pros and cons

On the Brazilian gambling market

In Brazil, legal gambling has been limited for decades due to a ban dating back to the 1940s. However, this changed with the enactment of the Act at the end of 2023, marking a significant shift in the country’s approach to regulating the gambling sector.

Who shall be affected by the Act?

The impact of the Act extends beyond just operators and regulators. It affects a wide range of stakeholders, including consumers, investors, and the broader business ecosystem.

Operators now have access to a regulated and safer gambling environment, with protections to prevent exploitation and promote responsible gaming practices.

On entering the sphere

Approved operators can obtain five-year licenses, allowing them to operate up to three brands per licensed company. Betting operators are required to pay a fee of 30 million BRL (5.91 million USD) and obtain a license. 

In Brazil, to engage in gambling activities, a company usually needs to be locally registered. This is due to the government’s desire to control and regulate the gambling sector at the national level. Having a local company will facilitate the process of interacting with regulators, tax authorities, and other control bodies.

Obtaining a gambling license in Brazil involves various requirements, and specifics can change as the legislative framework evolves. 

Key requirements include:

1. Local Company Registration: Register as a Brazilian company, complying with local corporate laws.
2. Financial Stability: Demonstrate financial stability and sufficient capital, providing financial statements.
3. Background Checks: Owners and key employees must pass background checks for criminal records.
4. Technical Compliance: Ensure gambling systems meet technical standards for fairness and integrity, including software audits.
5. AML Policies: Implement robust anti-money laundering measures, adhering to international standards.
6. Responsible Gambling: Promote responsible gambling through self-exclusion programs and betting limits.
7. Tax Compliance: Meet all Brazilian tax obligations, including payments and filings. Operators are taxed at 12% of their gross gaming revenue. Including other taxes that companies normally pay in Brazil, the total tax burden for gambling operators can exceed 30% of their gross gaming revenue​. Player winnings are also subject to a tax of 15%
8. License Fees and Taxes: Pay significant fees for obtaining and maintaining the license, which can be substantial. Additionally, there are ongoing taxes based on revenue, which must be regularly paid to the authorities. 

The law also sets forth guidelines for the authorization and operation of fixed-odds betting, contingent upon approved companies adhering to various policies and procedures. 

Conclusion

Brazil’s regulated sports betting market presents significant opportunities but demands meticulous planning, financial investment, and adherence to comprehensive regulations to ensure a sustainable and ethical gaming environment.

Brazilian gambling regulations are still not 100% clear, making it difficult to determine which compliance requirements will be in place.

If you need a gambling license in Brazil, contact SBSB Fintech Lawyers. We have been specializing in FinTech and Crypto and Gambling projects since 2013, providing tailor-made solutions for each client, taking into account the company’s business model. We will help you choose the most appropriate type of license and prepare the necessary documents to legalize your gambling business and obtain a gambling license in Brazil in accordance with the law, providing full legal support.