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Brazil’s government has committed to a new implementation timeline for online betting that will see a licensing decree published as soon as this month, but critical policy questions on online casino games and other areas potentially unanswered until the middle of the year.
Ordinance no. 561/2024 was published by the Ministry of Finance’s Secretariat for Prizes and Bets on Wednesday (April 10), establishing a formal “regulatory policy” for the new secretariat and mapping out a timeline for a series of 11 specific ordinances that will implement the federal licensing regime established by December’s Law 14.790.
The secretariat has already released one regulatory ordinance governing independent certification bodies and the next steps will be further decrees due this month to address permitted payment methods, betting systems and the licensing process.
According to Wednesday’s ordinance, the forthcoming licensing decree will address the “rules, conditions and opening” of the authorisation process, although it does not specify when exactly that process will open or when operators can expect to go live in the regulated market.
The three forthcoming regulatory ordinances due to be published by the end of April will then be followed by seven others released in three phases through to the end of July.
Wednesday’s ordinance from the new secretariat ends the period of silence that had shrouded Brazil’s implementation process since a senior finance ministry advisor and presumed regulator-in-waiting announced an aggressive timeline at the ICE expo in London in February, only to then leave his role in government just a few days later.
Sources said the latest announcement was most likely made to reassure the industry that the government was still committed to a timely implementation process. However, sources also cautioned that the deadlines included in the ordinance are non-binding and the key next step is still the appointment of a chief secretary to lead the new secretariat who will ultimately have to sign off on the regulations.
The latest ordinance is still a welcome step, said Udo Seckelmann, a gaming law expert with the firm of Bichara e Motta Advogados in Rio de Janeiro.
“There has been a lot of uncertainty regarding, first, the subject of all the ordinances that will be published by the regulator and, second, when the ordinances will be published. The timeline is a good way to show the market what to expect and when, so the stakeholders can be prepared,” Seckelmann told Vixio GamblingCompliance.
By outlining which types of regulations will be released and in which order, Wednesday’s ordinance also offers some clues as to when the industry can expect to receive answers to a series of burning policy questions that were left unanswered by Law 14.790.
The licensing ordinance due this month is largely expected to update an initial version released in October before the new federal law was finalised. But it may also specify whether the legal requirement for licensed operators to be at least 20 percent owned by a Brazilian requires a local investment partner, or whether it can instead be met simply by applying via a Brazilian subsidiary company.
Another key question regarding the range of online casino games to be permitted in Brazil may not be answered until June, however, when an ordinance addressing technical requirements for online games is scheduled to be released.
Law 14.790 strictly allows online casino games under the guise of “fixed-odds bets” on “virtual online gaming events”, and the finance ministry’s former senior advisor caused discomfort through a series of public statements earlier this year that certain jackpot-based games or crash games were not expected to fit within those definitions.
It is also conceivable that clarity over whether certain forms of bonuses will be allowed in Brazil may have to wait until July when an anticipated ordinance addressing responsible gambling and advertising is expected.
Law 14.790 expressly prohibits all forms of bonuses or advance offers for placing a bet, but industry advocates are angling for free bets and other retention bonuses to be permitted via loyalty programmes that could be made available to established customers.
The full timeline for the forthcoming regulations as outlined by Ordinance no. 561/2024 is:
Phase 1 (by the end of April)
- Certification laboratories: already addressed by Ordinance no. 300/2024 in February, establishing requirements and procedures relative to the recognition of certification bodies for betting systems and live casino studios.
- Payment methods: establishing general rules to be observed in payment transactions involving licensed operators.
- Betting systems: establishing technical and security requirements for the betting systems used by operators.
- Licensing: establishing rules, conditions and opening the authorisation process for the operation of fixed-odds betting in Brazil.
Phase 2 (May)
- Anti-money laundering (AML): establishing policies, procedures and controls to prevent money laundering, terrorist financing and other types of fraud related to betting.
- Rights and responsibilities: establishing the set of rules to be observed by authorised operators to comply with their legal obligations and guaranteeing the rights of bettors.
Phase 3 (June)
- Online gaming: establishing technical and security requirements for online games that may be offered by operators.
- Regulation: establishing rules and procedures for the monitoring and oversight of fixed-odds betting.
- Enforcement: establishing procedures for the application of administrative sanctions.
Phase 4 (July)
- Responsible gambling: Establishing regulations for actions to promote responsible gambling, specifically the measures, guidelines and practices to be adopted to prevent pathological gambling, rules for the monitoring and prevention of financial hardship of bettors and supplementary rules on responsible advertising.
- Social beneficiaries: establishing procedures for the transfer of revenues to beneficiaries from tax revenue as established by Law 13.756 of 2018.
Meanwhile, in a separate development on Wednesday, Brazil’s Senate formally convened a special commission (CPI) to probe concerns of match-fixing and integrity related to sports betting.
The Senate special commission, which follows a similar and ultimately inconclusive investigation held in the lower house of Congress last year, will involve 11 senators with legendary former Brazilian footballer Romário assuming the key role of rapporteur.
The investigation is expected to address allegations of spot-fixing that have plagued Brazilian football in the absence of regulation. Still, it will be closely watched by industry stakeholders given Rio de Janeiro senator Romário will be able to recommend specific and policy reforms for the Senate’s approval via his report, which could potentially be applied to the incoming regulated market.
As legislation to regulate sports betting and online gaming was being considered last year, Senate sports committee chairman Romário recommended policy restrictions to ban betting on yellow cards, corners and certain other events.
Additional reporting by Talia Samuelson.
