Brazil - online gambling regulations

Online gaming entertainment is flourishing, with more and more new gambling markets being established across the globe. Brazil is among the many who have opted to open its doors to legal gambling activity. There’s a range of regulatory requirements, and not all forms of gambling are embraced with open arms.

In this guide, we go through all the latest developments and changes in gambling laws in Brazil.

History of gambling in Brazil

Brazil is making history with the new gambling law passed at the end of 2023. It goes without saying that this law has caused massive change, finally bringing regulated gambling to a country where it has been mostly prohibited since the 1940s. It’s a new day for gambling in Brazil!

Before 1941, gambling was embraced and considered a form of entertainment. However, with the introduction of the Criminal Contravention Act of 1941, all games of chance were banned. Then, in 1946, President Eurico Gaspar Dutra updated the policy banning all forms of gaming. Leaving all casinos without permits and seeing all gambling venues close down one by one.

For decades since then, poker has been the only legal game in Brazil, as it is seen as a game of skill, not chance. Though, even with the ban in place, Brazilians continued to enjoy betting activity. Then, in 1971, there was some light and liberalisation with the legalisation of Loteria Federal, the state-owned lottery. Shortly after, we saw the allowance for non-commercial bingo and horse racing.

Even with the rise of online gambling, the government seemed to be dragging its feet with legalisation. The main argument is that the restrictions only focus on gambling operators within the country. This means that offshore operators targeted the nation and raked in profits.

With gambling basically unregulated in Brazil for over eight decades, a big change came when the Chamber of Deputies approved a bill for regulated sports betting. Bill 14,790 was written into law on December 30, 2023.

What brought the change?

Now that Brazil has voted to legalise gambling, there are various reasons Brazilian officials moved towards regulation, including a growing interest in iGaming and other forms of games of chance.

While these forms of gaming entertainment are unregulated, Brazil is missing the opportunity to rake in tax revenue. By adding regulations on these games, the government can benefit from the revenue operators gain.

This also gives them the opportunity to attract investors and some of the major iGaming brands. Brazil has been a grey market proving to be quite lucrative, and considering over 20 million Brazilians are partaking in online gambling in international online casinos, a regulated market is beneficial to all.

What about sports betting?

Sports betting is legal in Brazil and licensed and regulated by Brazil's Ministry of Finance's Secretariat of Prizes and Betting (Gaming Authority).

Earlier this year, the authority published Ordinance No. 827/2024, which gives an outline of all the general rules fixed-odds betting operators are expected to follow if they hope for legalisation.

With these new regulations in place, all operators wishing to operate legally must meet the requirements and deadlines per the legislation. Furthermore, the ordinance states that only companies with headquarters and administration in Brazil can apply for a license. The license will be valid for five years and cost BRL 30 million. All entities legally operating in Brazil are expected to comply with these new regulations.

Applications submitted within 90 days of the publication of the Ordinance are considered a priority, and approvals are guaranteed by December 31, 2024, if all the legal requirements are met. Furthermore, all documentation must always be kept up to date, and proof of compliance can be requested at any time. If the companies fail to get their license by 1 January 2025, they risk penalties.

Current regulations

The four-stage process of developing and releasing the new regulations for Brazil betting was announced and addressed in four stages throughout 2024.

President Luiz Inacio Lula da Silva signed Bill 3,626 into law in December 2023, marking the start of a new era for online gaming and sports betting in Brazil.

The bill has been met with many setbacks. There were attempts to remove iGambling from the bill, which luckily got rejected in November, only to be approved by December 2023. It’s good that we quickly saw it being re-added by the Chamber of Deputies.

As in most cases, there was a lot of controversy regarding the proposed tax rate, which was set at 18% of gross gaming revenue (GGR). It was initially proposed to be around 30.82%, but it was lowered even more to a well-rounded 12%.

The Brazilian Ministry of Finance currently has the authority to authorise access to providers. The newly established National Gaming and Betting Secretariat (Secretaría de Apostas Esportivas) will regulate the gambling market.

Types of legal gambling options in Brazil

While games of chance have been under a ban for a long time, big changes are happening within the gaming market. Let’s take a closer look at the forms of gambling that are legal in Brazil.

• Fixed-odds sports betting is legal and regulated online and in land-based establishments.
• Fantasy sports are not currently regulated, but they are considered legal in Brazil.
• Lotteries are legal, but the state-owned bank Caixa Econômica Federal has a monopoly over all lotteries in Brazil.
• Poker is considered a game of skill. It is legal, but it remains unregulated.
• All horse racing activities are legal and regulated by the National Coordinator Commission of Horse Breeding.
• There is an allowance for non-profit bingo activity, but it is tightly regulated.

Thanks to the latest legislation changes, we look forward to online slots, table games, and other online casino game variants being legally accessible to Brazilians. Locals will also have access to crash games, although the requirements state that they remain random and that player skills do not impact outcomes.

These games must also clearly display the minimum and maximum value of the prize multiplier and the frequency of increase. They are also required to have a minimum return-to-player percentage of 85%.

Responsible Gambling in Brazil

All licensed operators are required to implement responsible gambling measures as per legislation. This means players can rest assured that platforms will feature a range of tools and options to assist in controlled betting. This includes deposit limits, loss limits, and self-exclusion mechanisms.

Regulated operators will undergo routine audits to ensure they keep up with the requirements and that players can enjoy secure, fair gaming. Any non-compliant platforms will face penalties starting with warnings and fines of up to BR$ 2 billion Reais. Stricter punishment also includes revoking authorisation and a possible ban on applying for a new license within 10 years.

Normative Ordinance No. 1,231 states that operators must be diligent in developing their betting systems and choosing their advertising and marketing. The primary objective is to create a safe environment where players can participate in responsible gambling while the government combats the rise of gambling addictions.

Is gambling taxable in Brazil?

The Brazilian gambling industry has a 12% gross gaming revenue tax for regional operators. There is also a monthly inspection fee, which can range between $10,000 and $390,000.

In terms of player betting activity, some taxes apply. Any player winning above $547.25 will be subject to a 15% tax. Any winnings below this amount are tax-free but should still be declared.

The future of gambling in Brazil

While some land-based gaming activities are still prohibited, sports betting platforms and online casinos can apply for licensing. It’s a new season for Brazil which introduces plenty of fixed-odds betting.

With AI, blockchain, and other advanced technologies, players will enjoy an enhanced betting experience and ensure that market integrity stays intact. Some of the biggest issues at the time are the possible gambling problems that may arise and the impact the activity may have on addiction and mental health problems.

For now, we eagerly await the arrival of 2025, as the new year will welcome Brazil's new regulated gambling market, leaving players to enjoy top-rated online casino sites and better and safer gameplay.