English
PortugueseExciting times are ahead for Brazil’s gaming industry! The Ministry of Finance (Ministério da Fazenda: Secretaria de Prêmios e Apostas – SPA) has been continuously rolling out important updates over the last couple months, bringing us closer to understanding the requirements for this fully regulated market. Here is a breakdown of what you need to know about these regulatory updates and how they impact operators and players.
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New licensing opportunities
The SPA has issued an ordinance that opens the door for operators to apply for operating licenses. This move is a significant step towards launching Brazil’s fully regulated sports betting and igaming market, which is anticipated to go live before the end of the year. Operators who act quickly and submit their applications within the next 90 days will be advantaged, receiving their licenses ahead of the market launch. First mover advantage will help operators securing their market share.
Enhanced technical standards
Alongside the new licensing opportunities, Brazil’s Ministry of Finance has also introduced Ordinance No. 722/2024, outlining technical standards that operators must meet to obtain licensing. These standards focus on areas such as geolocation, KYC, and identity verification.
Here’s a closer look at what these entail:
Geolocation compliance and fraud prevention
The new technical ordinance mandates a number of critical measures to ensure that consumers are physically located in Brazil when wagering, in addition to combating fraud:
Operators must identify and block attempts to manipulate location data using tools like remote desktop software, rootkits, and virtualization. This must be done by verifying a player’s location before the first bet placement and dynamic re-geolocation every 30 minutes thereafter. Geolocation insights are incredibly valuable for combatting fraud and money laundering. Location data enables operators to create a location profile, allowing them to detect anomalies earlier that may be indicative of fraud.
Identity verification
- A bettor’s identity must be verified before account creation, including CPF verification and facial recognition.
- Only players over the age of 18 can register for an account. Any discrepancies between the provided information and official documents will result in denied registration.
- Operators must ensure bettors are not on any exclusion lists.
- Access to betting systems requires a username/password or biometrics.
- Re-authentication is necessary after 30 minutes of inactivity. Multi-factor authentication, including facial recognition, is required for password recovery and unlocking accounts after suspicious activity.
Introducing these technical standards highlights the regulator’s proactive stance to protect the market against fraud and other financial crime risks. By embedding rigorous requirements into its regulatory framework, the SPA is not only prioritizing player safety but also striving to uphold market integrity. This commitment ensures a secure, fair, and transparent gaming market.
(July 2024) Anti-money laundering updates: Compliance essentials
On July 12th, the SPA issued its Anti-Money Laundering (AML) Ordinance for gaming, set to take effect on January 1, 2025, alongside market opening. These regulations require gaming operators to implement robust AML programs to ensure the integrity of their operations and combat financial crime.
Operators will be required to establish risk profiles for players, by collecting, verifying, and validating their information based on associated risk levels. This process requires continual updates and reassessments of risk to address any changes in a player’s risk profile.
To meet these new standards, operators must actively identify, block, and report suspicious activities to the Financial Activities Control Council (Coaf), the federal body overseeing Brazil’s AML regulations across all sectors.
This includes identifying unusual betting patterns such as rapid fund movements, unverifiable information, and attempts to withdraw funds without playing. They must also monitor for unauthorized account use and flag high-risk profiles, including politically exposed persons (PEPs) and individuals from high-risk jurisdictions as defined by FATF or Brazilian tax authorities.
These AML regulations complement Brazil’s broader regulatory framework by ensuring robust oversight and enforcement, reinforcing the commitment to a secure and transparent gaming environment.
How can GeoComply help with your Brazilian market entry?
GeoComply’s market-ready solutions ensure smooth compliance with the regulatory requirements. We’re turnkey-ready to provide solutions covering geolocation, KYC, AML and fraud detection, and other authentication capabilities:
- With GeoComply’s industry-leading location compliance detection, you can meet location requirements with unmatched precision, reducing friction and boosting revenue. Detect suspicious activities and minimize risk with every online interaction.
- Choose IDComply for a streamlined age and identity verification process tailored to the Brazilian gaming industry. Our solution ensures compliance with KYC and anti-money laundering regulations, delivers a seamless user experience, and boasts the highest pass rate in the industry to minimize customer friction.
- Leverage OneComply to help you expedite licensing processes, swiftly expand into new markets, and cut down on legal and labor costs.
