Steadying the ship in LatAm’s largest market

Until August 20, 113 companies had applied for authorization to operate sports betting in Brazil. This number exceeded market estimates and could yield up to R$3.4bn (US$200m) to the Brazilian Ministry of Finance this year, solely from license fees. For the first time in recent years, both Brazilian and foreign players recognize that regulation is a crucial step for the development of this activity in the country and have the necessary confidence to make substantial investments. After this initial milestone, 2025 has become a key moment for the sector. From January 1, all the regulations published in recent months by the Secretariat of Prizes and Betting of the Brazilian Ministry of Finance (SPA/MF, in the Portuguese abbreviation) will take effect. It is expected that all operators who do not obtain the proper authorization and fail to comply with the rules outlined in the regulation will be appropriately penalized and banned from operating in Brazil. These sanctions apply not only to simple rule violations, such as operating exclusively on websites with the domain ‘.bet.br,’ but also to guidelines related to advertising, payment transactions and anti-money laundering policies.

Therefore, in this complex chain of involved agents, in addition to the operators currently adapting to the new regulatory landscape of the sector, financial and payment institutions, marketing companies, influencers, football teams and technology companies must seek information to adjust; and avoid being held accountable or exposed, each to varying degrees, due to their partnerships.

The recent publication of the latest regulations by the SPA/MF marks the conclusion of the 2024 Regulatory Agenda for this topic. Together with other previously announced norms, the purpose is to structure the fixed-odds betting market in Brazil, ensuring legal certainty and consistency for all stakeholders, including the real target audience: the bettors.

Until the publication of the Brazilian Federal Law No. 13,756/2018, sports betting – whose growth had already been observed in other countries – was considered gambling, which classified it as a criminal offense subject to imprisonment and fines under the Brazilian Law of Misdemeanors. According to this law, the following are considered gambling: games where winnings and losses depend exclusively or mainly on luck; bets on horseraces outside of racetracks or authorized locations; and bets on any other sports competition.

With the establishment of these bets as a lottery modality, which is a public service, fixed-odds betting has become expressly permitted by law. However, the absence of specific regulation created a regulatory void, leading to various uncertainties for all parties involved. As a result, a clear trend emerged with the exponential growth of companies engaging in this activity within Brazil through platforms based abroad, operating without paying taxes despite the substantial sums involved. This situation further confused bettors who naturally lacked visibility into these nuances, as the websites were easily accessible, and the companies widely promoted by marketing agents and sports-related entities. It is worth noting that as early as 2023, a scenario had already emerged where all Serie A football teams in Brazil were sponsored by betting companies.

Now, with the enactment of Federal Law No. 14,790/2023 at the end of last year, along with various ordinances issued by the SPA/MF, there are concrete guidelines that represent a true regulatory milestone for the sector.

Regulations package

With the publication of Ordinance SPA/MF No. 561/2024, which established the SPA/MF’s Policy and Regulatory Agenda, the Brazilian fixed-odds betting market has undergone an intense phase of regulation. Throughout this year, more than 10 regulations have been issued, each functioning as a chapter that constructs the regulatory framework for this expanding sector.

These regulations cover a wide range of essential topics for the market, including standards for obtaining authorization and conducting payment transactions, as well as technical security requirements for betting systems and online games. They also include strict guidelines for preventing and combating money laundering and other frauds, detailing procedures for supervision, administrative sanctions and social allocations. Most importantly, they reinforce the protection of bettors’ rights and promote responsible gambling.

The regulation regarding online games, one of the most anticipated by the market, defines aspects that were uncertain after the law was enacted. The main debate centered around whether games commonly known as online casinos would be allowed, and it became clear that there is room for the use of these games – including those similar to Fortune Tiger, very popular in Brazil – as long as they are adapted to the new regulatory guidelines. Among the key rules requiring adaptation, operators must include a payment table indicating potential winnings before placing bets, and these potential winnings cannot be changed after the bet is placed. Additionally, operators must distribute a minimum of 85% of the amount collected from bets as prizes to users.

This means that the legality of the Fortune Tiger will still depend on operators obtaining the necessary authorizations to regularly offer these games and ensuring compliance with the new regulatory rules. It is worth noting that, given the existence of many similar platforms, assessing validity and necessary adaptations will require an evaluation of each specific case.

Furthermore, the regulation specifies which activities will be classified as online games and which should be excluded from the scope of regulation (such as fantasy sports, multiplayer games and skill-based games like poker). There is also specific reference to the possibility of operating games commonly known as slot machines, card games and roulette. The regulation emphasizes that offering online bets in physical establishments, even by equipment, will not be permitted. Additionally, operators cannot offer games in the same betting system that are not subject to regulation and authorization by the Ministry of Finance.

Another regulation that has been widely debated in the sector pertains to payment methods. As, among other guidelines, there are specific rules for the payment of prizes within 120 minutes and strict KYC regulations to be followed by operators, financial and payment institutions have been overcoming their resistance to the sector and seeking deeper understanding to become compliant.

For bettors, the rules and guidelines on responsible gaming, aimed at preventing pathological or abusive gambling, are also noteworthy. Considering the potential disorders associated with gambling, clear conditions for communication, advertising and marketing activities are essential to protect bettors and promote a safe and sustainable entertainment environment. Furthermore, to ensure compliance by operators, the new regulations detail what constitutes an administrative sanction, the sanction process, the penalties applicable for non-compliance, and how monitoring and supervision of these activities will be conducted by public authorities.

What’s next?

As there is a licensing fee to be paid, in addition to taxation, and considering the large number of companies currently operating in the sector, it is not possible to rule out the risk that many of these companies, which are currently in regulatory limbo, may choose not to pursue regularization in Brazil. However, in a contrasting trend, companies that have been seeking the much-desired operational certainty in Brazil – including notably recognized foreign players – are likely to view this investment as the starting point for a promising business.

Therefore, the many companies that have opted for or will opt for regularization have until December to adapt to the new technical and economic criteria for offering games and bets, as well as to formalize and implement all contracts and partnerships that drive their activity. We also expect input from relevant Brazilian entities for this framework, such as the Central Bank, PROCON, and the National Advertising Self-Regulation Council (CONAR).

Furthermore, it is expected that effective oversight and enforcement by both consumer protection agencies and involved public authorities will be an ally and a key component of this paradigm shift. From a market perspective, global trends support the expectation that these sports bets will become even more popular with increased rule transparency and the assurance of trust and safety for bettors.

The regulations issued by the Ministry of Finance reflect international best practices in the sector and aim to ensure legal certainty for a market that has been growing exponentially and operating in Brazil without clear rules. 2025 will be a true testing ground for the effectiveness of this new regulatory framework, which may even lead to changes and improvements in the existing rules.

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