B2B Approvals, Bonuses Among Unanswered Brazil Questions

February 13, 2024
The big questions regarding Brazil's forthcoming regulated market remain unresolved despite much debate on the key issues at last week's ICE convention.

The big questions regarding Brazil's forthcoming regulated market remain unresolved despite much debate on the key issues at last week's ICE convention.

One of the key questions among ICE attendees was what requirements would apply to B2B suppliers seeking to enter the Brazilian market.

The short answer, according to various Brazilian lawyers present at ICE, is that they will not need a licence. 

At a certain point in the not-too-distant but unknown future, however, suppliers may have to register with the newly minted Prizes and Betting Secretariat within Brazil's Ministry of Finance and have their technology certified.

According to lawyer Udo Seckelmann of law firm Bichara & Motta, the certification process will be outsourced to independent test labs such as GLI, rather than be conducted by the government itself.

Although a regulatory ordinance addressing certification requirements has been promised, it has yet to be published. Furthermore, no ordinances from the new Prizes and Betting Secretariat can be signed until the head of the department is officially appointed. As of right now, that role is presumed to be filled by finance ministry special advisor José Francisco Manssur, who is expected to formally take office on February 20. 

As well as a requirement for operators to have a Brazilian shareholder, another hot topic of discussion at ICE was whether any type of bonus offer would be allowed.

Mark Warrington, legal affairs director at Flutter, warned during a panel discussion that a more liberal interpretation of bonus restrictions will need to be applied to enable effective channelisation rates from the current offshore market.

“We say liberally interpreted because bonuses are going to be one of the key instruments that unregulated operators will use,” Warrington said. “We have to be aware of that now that we are dealing with this restriction. We have to address that point.”

Warrington said he hoped forthcoming regulations would lead to effective restrictions and clarity, as well as “what we would hope is a sensible interpretation” to accommodate bonus offers by regulated operators.

But Pedro Simões, a partner at Veirano Advogados, said that he has long warned that bonuses were not going to be allowed. Brazil has a long history of strong consumer protection, he told Vixio GamblingCompliance, and restrictions on bonuses should not be a surprise to anyone familiar with that.

Brazilian experts at ICE also addressed the ongoing boom in sponsorship deals by betting operators in Brazil, although Seckelmann declared a recent record-breaking deal involving Corinthians to be the pinnacle rather than a sign of things to come.

The São Paulo-based team last month agreed to a record deal with little-known online gambling platform VaideBet, worth a reported R$370m (US$76m) over three years. 

“I think we’ve reached the maximum in terms of market value for sponsorship agreements, and everything that's related to betting in Brazil before the regulation, because I heard some of the operations — their gross gambling revenue — are dropping a bit,” Seckelman said. “So the fever is stable now.”

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