The legislative framework for Brazil’s forthcoming regulated gambling sector is becoming clearer by the day with new requirements for payment authorisations outlined this week.
Brazil’s Secretariat of Awards and Prizes (SPA) has published the ‘Normative Ordinances’ for payments. Betting and gaming operators active in the emerging market will have to abide by these requirements when conducting financial transactions.
Deposits, withdrawals and prize payments can only be made via electronic transfers. Payments and prizes need to be paid to customers within a 120-minute window, beginning at the end of the sporting event.
This will place a heavy emphasis on the use of Pix, Brazil’s national instant payments system, as well as Available Electronic Transfer (TED), debit and prepaid cards, and Central Bank (BACEN) authorised general bank transfers.
Operators will not be able to accept deposits via cash, bank slips, cheques or cryptocurrencies. Meanwhile, any form of credit card transaction is explicitly prohibited for both bookmakers and payment service providers (PSPs).
Regarding payment providers, any PSP servicing operators must be registered and accredited with the Central Bank and not by any third party service. Lastly, customer incentives such as bonuses and free bets are also banned.
As a result of the abovementioned 120-minute payment window requirement, operators are obliged to implement policies for managing exposure to liquidity risks to prevent businesses from fulfilling daily business activities.
SBCNoticias (Brazil) explained: “Licensed operators of the Brazil Bets market must establish methodologies for calculating exposure limits that foresee processes to measure, monitor, and mitigate exposure to liquidity risk and have a contingency plan for additional resource sources. However, the stated policy will need to be reviewed and approved annually by the SPA’s administration.”
The Brazilian betting market is set to be one of the largest in the world, with the country home to the globe’s seventh largest population and eighth largest economy by GDP, with a strong sporting culture also present.
Brazil’s President, Lula da Silva, signed the betting legislation – Law No. 14.790 (Betting Law) – into federal law in December 2023, shortly before New Year. The law approved the creation of a federal betting market subject to various requirements, although some areas such as payments were not yet outlined at that time.
The SPA was subsequently formed as the regulatory body for Brazilian betting, under the political remit of the Ministry of Finance. The regulator aims to implement the payments requirements within six months, with overall market launch planned this year.
Ahead of market launch, a plethora of betting operators are preparing for Brazil launch, including factoring in various payments considerations such as adopting to Pix and abiding by the country’s AML and KYC requirements, as explained by Entain’s SVP of Regulatory Affairs and Responsible Gaming Martin Lycka in an interview with Payment Expert earlier this year.
