New years are a time of change for many, and, this year, Brazil’s iGaming market is included. Brazil’s national legislature is expected to begin introducing a new regulatory framework for online sports gambling and casinos. With the industry’s rapid growth, it’s important to consider the regulators and what they could mean for your business.
Growth of iGaming in Central and Latin America
With the increased availability and affordability of high-speed internet in Central and Latin America, citizens are now participating in iGaming more than ever before. The rise of smartphone users is also supplementing the industry’s growth as users can participate wherever they’d like.
The proliferation of online gambling in Brazil is so massive that experts are blaming iGaming as the cause of the country’s slowed economic growth. Finance Minister Fernando Haddad described this “pandemic” as the motivation behind the changes in Brazil’s regulation of online gambling.
Introduction of iGaming in Brazil
Brazil’s federal legislature approved legislation for online gambling in November 2018, but it took until December 2023 for the final enactment. In April 2024, Brazil introduced a four-part regulatory framework that included provisions to promote responsible gambling and prevent financial crime, along with a licensing system for operators. This framework was updated in August 2024 with Normative Ordinance no. 1,231 that further promoted responsible gambling with provisions like limiting certain partnerships and requiring profit allocation towards social goods.
As of October 1st, 2024, Brazil’s Normative Ordinance no. 1,475 prohibited all fixed-odds lottery betting nationwide unless the operator it is accredited by a state lottery or is authorized by the Brazilian Ministry of Finance’s Prizes and Betting Secretariat (SPA). Authorized companies are required to pay millions in annual fees to the government and comply with nationalized rules. Providers with foreign licenses are no longer able to participate in Brazil’s iGaming market. After no. 1,475 went into effect, authorities blocked over 2,000 unlicensed online gambling platforms.
Brazil’s SPA has additional regulations that will begin in January 2025.
2025, the Year of Protecting iGaming Consumers in Brazil
iGaming companies and operators that applied for authorization before August 31, 2024 and paid their respective fees will receive market access once it opens. New applicants, however, are not as lucky, as application processing is expected to take up to 150 days.
While those looking to enter Brazil’s booming online gambling industry might not be thrilled about its nationalization and increased restrictions, consumers should look forward to extra protections with new operator restrictions from the SPA. Numerous ordinances are expected to go into effect on January 1, 2025 to ensure operator compliance. These range from operator inspections to mandated consumer age verification to restrictions on celebrity endorsements and promotions.
Additionally, Normative Ordinance no. 1,233 gives the SPA the authority to take action against operators for regulatory violations. This includes warnings, fines, and, ultimately, termination of operating licenses.
What iGaming Operators Need Going into 2025
Online gambling in Brazil has only been legal for almost a year, and its frequent regulatory updates can be difficult for operators to navigate and comply with. With these changes continuing in 2025, it’s important to know what lies ahead for the iGaming industry in Brazil. Companies and operators need to seriously consider implementing these strategies into their platforms to ensure regulatory compliance:
- Age Verification System: Normative Ordinance no. 1,231 requires that online gambling operators prevent customers under the age of 18 from participating in their services. To comply with this regulation, companies should look into comprehensive, widely accessible age verification systems, like Integrity’s IDV-Direct.
- Identity Verification System: It’s not just enough to verify a consumer’s age, as identity fraud is a common issue in online gambling. Your platform needs to quickly verify your customer’s identity to ensure your compliance and their satisfaction. Integrity offers a variety of identity verification services, from document verification (Integrity AutoDoc and Integrity Document) to video verification (Integrity Face-to-Face).
- Consumer Screening: Just because company’s can validate a customer’s identity doesn’t mean that they are in compliance with industry regulations. Participants need to be screened against lists of Politically Exposed Persons (PEPs), players excluded by the Brazilian government, and other global financial watch lists. Integrity AML screens consumer information against financial watchlists and other lists of sensitive information to ensure your compliance.
Brazil has been able to develop and grow its online gaming market by modeling it based on other online gaming success stories. New SPA regulations shouldn’t scare companies or operators away, as they have the potential to ensure customer satisfaction and protection.
Meet the New Year with Integrity
Integrity, a division of Aristotle, offers a waterfall approach to age and identity verification and anti-fraud services to ensure you’re meeting KYC requirements and protecting yourself and your consumer. Click the “FREE DEMO” button in the upper right corner and an Aristotle representative will suggest the proper solution to meet your age verification requirements.