According to Brazil’s latest nomenclature ordinance, gaming operators must obtain a license by 2024. If not, they will be penalized from January 1, 2025.
The Official Diary of the Union of Brazil published Normative Order 827 on May 21, which outlines the conditions for sports betting and gambling licences.
The “adjustment” period begins, and gaming operators in Brazil will have to conform with the new regulatory framework by 31 December 2024. Priority will be given to applications that are submitted by companies within 90 days after the release of Ordinance 827.
Authorised operators will be granted a licence lasting five years, once a BRL30m (PS4.6m/EUR5.4m/$5.9m) fee is paid, and able to offer gambling via three skins.
If you fail to obtain a license by the deadline, penalties will be applied from January 1, 2025.
Are you able to meet the deadline for Brazil’s sports betting?
This ordinance is part of a process that the Ministry of Finance has been working on to complete regulations.
Some sources claimed that the government intended to grant licences by the end of this year, with the plan being to start in January 2025. Others argued the timeline set out was too aggressive, and expected delays. Originally, the ordinance defining how operators should apply was expected to be released in April.
One lawyer acknowledged that the time frame was “daunting” after the Ordinance. The Ministry, however, believes that it’s achievable. They added. Supported by a larger headcount at Secretariat of Prizes and Bets.
They explained, “I expect to see a significant increase in workforce in the coming weeks at the authority to meet the target deadline.” This has happened in industries like finance.
What are the requirements for Brazilian sports betting licences and online gaming licenses?
The applicant must have its headquarters in Brazil. The foreign company will be allowed to apply, provided that a Brazilian holds at least 20 percent of its share capital in the local subsidiary.
Experts are unsure of how this arrangement will actually work in the real world. One lawyer expressed disappointment at the lack of information about this requirement and asked for more guidance from Ministry.
The operator would have to establish this setup before applying for a license, since any mergers, splits or changes in corporate control will prompt a review of a licensing by the Secretariat of Prizes and Bets.
How can operators obtain a Brazil gambling licence?
Companies must submit documentation to prove they have the legal right to be in Brazil. This includes identification forms and registrations for entities that control them. The Central Bank of Brazil must certify that the company has complied with payment regulations.
Businesses will be required to submit a certificate of registration to pay taxes in the country from the Special Secretariat of Federal Revenue (SSFR) and the Attorney General’s Office of the National Treasury.
The criminal records of all key personnel, including financial beneficiaries, must be clean. This means that there should not have been any convictions for embezzlement, tax fraud, or bankruptcy.
What will applicants for Brazil gambling licences need to prove in order to show their financial stability?
The successful applicant must also provide proof of financial reserves of BRL5m. A projected cash flow of the two next financial years, signed by the finance director or an equivalent is required to demonstrate how the company expects to expand in the market.
The launchers will be charged a gross revenue tax of 12% and an inspection fee per month on a sliding-scale from $10,000 up to $390,000.
What is the minimum technical requirement for Brazilian gaming license applicants?
As outlined by Ordinance 722, published earlier in the month, technical certification is required for betting systems.
The ordinance outlines the requirements for offshore datacenters. This ordinance outlines the provisions for datacentres hosted offshore.
This ordinance includes the requirement for testing centres, but this could result in yet another bottleneck in the regulatory process. The sheer number of applications could slow the testing process, even though Gaming Laboratories International is certified. In January, 134 local and international operators responded to a call for expressions.
Next steps in Brazil’s gaming licensing process
The SPA will announce its technical requirements and processes to monitor industry advertising by June 30th, according to the 4-step process outlined in April by the Ministry of Finance.
By the end of this month, final rules will govern how contributions from industry will be allocated to causes that are socially responsible. It is expected that funds will be paid into a central bank account and then distributed among a variety of government agencies, charities and other socially responsible causes.
