The regulation of the billion-dollar sports betting market in Brazil has generated a series of doubts regarding the scope of the measures being taken by the government. Therefore, the lecture of the Secretary of Prizes and Bets of the Ministry of Finance, Régis Dudena, at an event held last Friday (7th) in São Paulo by FAS Advogados in cooperation with CMS, was enlightening.
Dudena highlighted important procedures for companies interested in applying for their licenses and explained that the focus of the agency (in terms of oversight and sanctions) is on the operators, while other players in the betting ecosystem are essential for the regular compliance with the conditions imposed by the regulation.
Betting operators interested in licensing to operate from 2025 have until August 20th to submit their applications. The Secretariat guarantees the issuance of licenses by the end of the year to operators who meet the required conditions, but Dudena clarified that errors or alterations by the operators that require re-evaluation by the Secretariat could impact or even cause the loss of this deadline.
Dudena emphasized that the Ministry will treat all companies equally and that by the end of July 11th ordinances will have addressed different aspects of the operation of the activity. Another point the Secretary clarified was regarding SPA's role in overseeing activities parallel to betting platforms, such as their advertising or payment services.
The Secretary explained that the Ministry of Finance agency will limit itself to monitoring and applying sanctions strictly within its remit. As a result, the platforms must still be monitored by other government institutions, such as the Central Bank, and are also subject to regulation by the National Council for Advertising Self-Regulation (Conar).
The event, titled " Regulatory connections: bets and technologies in debate," was attended by representatives from major betting companies, financial and payment institutions, and advertising agencies who filled the law firm's auditorium. The government's interest in regulation is largely driven by the need to tax a market that moves billions annually.
However, it also represents a recognition of an important economic activity for job creation and the protection of bettors' rights, who need to be safeguarded. Distinguishing "the wheat from the chaff" is another crucial factor in this process, which also aims to curb fraud, scams, and even financial crimes such as money laundering.
Another point of uncertainty was the requirement for betting companies to maintain a financial reserve of R$ 5 million (US$ 940k). Additionally, companies in the sector will also need to have a transactional account and a proprietary account to provide greater financial security for the ventures. These requirements help to enhance the credibility and security of the model and also aim to ensure that bettors receive their winnings. Companies will also need to have a minimum net worth of R$ 30 million (US$ 5.6m).
Regis Dudena also mentioned that payment restrictions, in cash, help to control financial flows.
Fernanda Meirelles, a partner in the Media and Gaming area of FAS Advogados, commented, among other considerations, on the risk of regulation excessively hindering the market and disrupting the operation of a productive and promising activity.
"The next ordinances will be published by the end of July, which will give companies that intend to meet the initial 90-day deadline less than a month to understand and assess the complete scenario of obligations and rights," the lawyer stressed.
The Secretary acknowledged that the Ministry is racing against time to implement the regulation, which prevents public hearings from being held, due to the sector having been without this regulatory framework for five years. However, he stated that over the next three years, the rules can be reviewed as flaws or needs for improvement are identified.
Source: GMB
