Classically, AML areas, there is the figure of due diligence, KYC, a risk-based approach and customer classification including whether the customer is considered a PEP, that is, a politically exposed person.
When visiting the newest Brazilian law that deals with obligations regarding lottery modalities (law 14790/23) there is the mandatory part of the Anti-Money Laundering, which we have an overview of the customer classification and as well as the list of prevented bettors gambling, where within article 26 there is a strict list of people prohibited from direct or indirect participation as bettors.
Among the items, whether they are minors (18 years old), people with influence in the betting market, whether they are considered owners, administrators, directors, managers or collaborators of the operating agent, public agents who can supervise this type of business, people Those who have access to computerized lottery systems or have any influence on the result are prevented from betting.
Here comes the question, are we facing a PEP 2.0 list? Could we call it the PES list, People Exposed to Sports? How to create such a list? A totally organic scenario, in which managers, coaches, trainers and members of the technical committee are prevented from doing so?
Athletes, referees, inspectors from entities organizing competitions or sporting events, as well as people diagnosed with gambling addiction and other people covered by the regulations of the Ministry of Finance are prohibited from betting under penalty of voiding any bet made by these people.
How to have a list like this? There are no companies with this type of capability yet, how do you select people who have this requirement? Will the compliance officer's mission be to educate companies with lists for monitoring and due diligence?
It is not enough to be objective and just make the list, it is worth remembering that the compliance officer must have a subjective understanding and evaluate the company's appetite when it comes to authorizing or not authorizing a client that potentially may not act.
Very different from a person classified as a PEP, which is not an impediment, but rather a limiting factor in the client's risk classification, which is often high risk, requiring evidence for operation X or Y, in this case, the “PES” list. It will be a prohibition at the initial moment, during the onboarding itself, and then comes the need for open compliance, open KYC, so that there is the same equation in all future betting companies to be authorized in Brazil.
The compliance officer must work with the business area, from the outset, to generate the expected success with security in the operation, a perennial and continuous work, with challenges to be overcome.
So, the future of this industry will affect all of us, not only in Brazil, but in Latin America becoming a Hot Spot for gaming and gambling, governance in terms of compliance must be an end-to-end process for all stakeholders, there is much to come yet, once we are waiting for the next steps from the government.
Link to the law: https://www.jusbrasil.com.br/legislacao/2119518911/lei-14790-23
Alison Dorigão Palermo
Director of Compliance for Latin America at NUVEI
