Betting firms preparing to take on Brazil need to place high value on payments – an integral part of the online betting and gaming product, playing a key role in the customer relationship and compliance, among other areas.
With market launch imminent, many European companies such as Entain, Flutter Entertainment and Kaizen Gaming are looking to set up shop in what is set to be one of the world’s biggest sectors. However, these companies will have a big payment consideration onboard, that being Pix.
In a recent conversation with SBC, James Kilsby, Vice President Americas and Chief Analyst GP at VIXIO, discusses the different regulatory conditions operators must expect – and more importantly adhere to – when entering Brazil. The national payments system, Pix, should be front-and-centre for bookmakers.
Kilsby remarks: “Pix has in a very short time become the widely adopted method for payments in Brazil and has already proven to be transformative in the development of the unregulated online gambling market in recent years.
“Pix would be the default payment channel for Brazilians regardless, but the fact that credit cards will not be allowed as a payment method for regulated online betting sites also makes it even more important.”
It is undoubtable that Pix is a standout success story for the Central Bank of Brazil. Launched as the country’s national instant payments platform in 2020, it has now surpassed debit and credit cards as Brazil’s most widely used payment method.
The Central Bank is now eyeing up an expansion of Pix into other markets, with interest apparently gaining interest in Europe – specifically Italy – and Asia. The growth of Pix and its use in Brazil, and potentially other markets, cannot be underestimated.
Operators have noted this, however. In an interview with Payment Expert ahead of the SBC Summit Rio, Entain’s VP of Regulatory Affairs and Responsible Gaming, Martin Lychka, noted the importance of Brazil, whilst also commenting on other areas, like AML.
As Brazil edges closer to betting market launch, the country’s regulated framework on gambling has become clearer. The industry has seen the establishment of a regulator, the Secretariat of Awards and Prizes (SPA), to govern the sector, as well as sports integrity provisions, although AML provisions have not yet been outlined.
He says: “In general, Brazil’s regulators are – not surprisingly – drawing influence both from the regulations and standards or established international markets, as well as from existing rules and requirements that apply to other regulated industries in Brazil.
“Specific requirements on AML are yet to be outlined, but it should be noted that Brazil already has a sophisticated AML regulatory framework that applies to banks and other businesses; fixed-odds betting is likely to become an extension of that.
“Still, in other related compliance areas, such as geolocation, Brazil’s regulations appear to have been informed by those of other markets, including the US.”
While AML clarity is still needed, SPA has unveiled a number of other ordinances for prospective licensed gaming operators. The full ordinances are due to be announced in July, and will cover areas such as ID verification and transactions.
In addition to payments, the SPA has also unveiled new ordinances around IT security, as noted above. The regulator is developing requirements around preliminary provisions, technical measures and the supervision of IT technology systems.
“The technical ordinances released to date by the SPA are highly detailed and generally set a high bar,” Kilsby continues. “Some of the requirements are more unique to Brazil; others are borrowed from standards put in place across various global jurisdictions.
“But overall they amount to a regulatory and compliance regime that is set to be burdensome from a technical perspective, and the cost of complying with these should not be underestimated by operators and suppliers who expect to enter the market.
“We also are yet to see other ordinances that will likely establish equally important technical requirements related to online casino-style games, monitoring systems and responsible gaming.”
Read the full interview with SBC News HERE
