Brazils Ministry of Finance’s Regulatory Framework Released For Sports Betting

Brazil regulators have released the publication of Ordinance No. 827/2024 by the Ministry of Finance’s Secretariat of Prizes and Betting (Gaming Authority). These regulations sets out how fixed-odds betting operations in the country will work.

The Ordinance stipulates that only legal entities incorporated under Brazilian law as limited liability companies (sociedade limitada) or corporations (sociedade anônima) with headquarters and administration within Brazil may apply for authorization to operate fixed-odds betting. This authorization will be granted for a five-year term, subject to a payment of BRL 30 million and a limit of up to three commercial brands that can be exploited through electronic channels under the authorization.

Existing legal entities in Brazil must comply with the new rules by December 31, 2024, ensuring a level playing field for both new entrants and established players in the market.

The Ordinance outlines a comprehensive set of documentation requirements that applicants must fulfill to obtain the necessary authorization. These include:

1. Legal Qualification: Companies must present corporate documents, identification of controllers, holders of qualified participation, administrators, and ultimate beneficiaries, as well as registration of financial institutions or payment providers that will offer financial services to the operator.
2. Fiscal and Labour Compliance: Applicants must provide fiscal and labour certificates issued by federal, state, and municipal authorities to demonstrate compliance with tax and labour obligations.
3. Integrity: The Ordinance requires the submission of statements regarding the company’s and individuals’ reputation, the lawful origin of resources, and clearance certificates, including criminal records and disciplinary history.
4. Financial Qualification: Applicants must provide a clearance certificate related to bankruptcy or judicial recovery, financial statements for the last two fiscal years, proof of a minimum financial reserve of BRL 5 million, full payment of the minimum share capital of BRL 30 million, and a minimum net worth of BRL 30 million.
5. Technical Qualification: Applicants must present a technical certificate for the betting system issued by a laboratory recognized by the Gaming Authority, a statement confirming the adoption of internal control policies and procedures, evidence of knowledge and experience in gaming, a description of the customer support structure, and proof of registration with Consumidor.gov.

The Ordinance allows operators to request additional authorizations to operate more commercial brands beyond the prescribed limit of three per authorization. In such cases, the betting operator will need to make an additional payment for the authorization fee (BRL 30 million), establish an additional financial reserve (BRL 5 million), and contribute an additional BRL 15 million to the share capital.