Could you share some details about your experience in the iGaming industry?
I began working in the iGaming industry two years ago. It's a very exciting industry - I love the dynamic nature of the stakeholders, the fast-paced business environment, and the excellent opportunities available. I am currently working as the Head of Innovation and iGaming at SM Legal Firm.
Our legal office has a specific department focused on the needs of clients in the iGaming industry, gaming agencies, service providers, and more. We are a full-service firm specializing in the sector, and we offer tailored legal advice across all areas of law relevant to iGaming in Brazil. Our top lawyers bring extensive experience in both iGaming and all areas involving corporate law.
Currently, my role is to lead our iGaming projects. Our team is committed to informing clients about Brazil's complex legal landscape (which we know can be quite difficult to understand!), ensuring they are compliant with local regulations and effectively managing their operations in the country.
What are your takes on the main components that operators must bear in mind following the regulations outlined by the SPA?
When we talk about regulating the iGaming sector in Brazil, we're not just talking about obtaining a license, but about how the market will ensure sustainable growth in the long term. With this in mind, operators need to understand that the obligations outlined by the SPA/MF go far beyond guidelines for obtaining authorization; they dictate how the Federal Government expects these companies to operate within a regulated environment. For this reason, topics such as bettors' rights, advertising and responsible gambling, information security, and new technologies were extensively addressed in the federal legislation.
Were you surprised by the number of companies that applied for a license as of the August 20th 2024 deadline (a total of 113), or was this in line with your expectations?
Yes, it was a pleasant surprise! During the initial weeks of the application period, we observed some resistance from companies to apply (which was completely expected, as when the application window opened, not all the ordinances had been published by the SPA yet). If you had asked me the previous Saturday (10th August), I would have estimated only 30 or 40 applications. So, seeing 113 companies apply by August 20th (and 114 by the time of our conversation) is a positive sign for a well-diversified regulated market.
I anticipate that even more companies will apply in September or October, especially those still questioning the feasibility of operating in the federal regulated market.
We have seen clients looking to grow but we have also seen companies decide against applying for a license last minute due to the regulatory requirements being “too overbearing” – have you seen this?
Yes, at our firm, we speak daily with operators from various sizes within the sector. Our work involved assisting companies with the licensing process up to the last minute, including corporate arrangements for joint license applications with other brands. However, I would say that applying even after the August 20th deadline remains a good strategy to keep options open, especially now that the investment market is taking a more mature look at the sector.
It’s crucial to emphasize that while the first window has closed, applications remain open, so companies still can apply for their license with the SPA.
AML and prevention of financial crime is key when it comes to what the SPA has outlined. Do you think that a regulated sports betting environment in Brazil will be beneficial to customers?
Yes, absolutely. The guidelines within the Brazilian legal framework, especially in SPA Ordinance 1,143, have made it very clear that the Federal Government is focused on ensuring the prevention of money laundering and financial crime. The truth is, with an operation registered in Brazil - under the oversight of the SPA, working with Financial and Payment Institutions duly authorized by the Central Bank, and having open audit channels for competent authorities - actions to curb money laundering and financial crime are much more likely to be successful, as this setup facilitates investigations and preventive measures.
When reviewing the legal ordinances regarding AML, it was evident that the government has a specific focus in this area. One of the first legal ordinances published by the SPA was Ordinance 615, which laid out specific guidelines for Payment Institutions, as these companies have serious obligations to ensure compliance with Brazilian legislation. It is crucial to understand that the regulatory obligations for this market extend beyond iGaming and Betting Laws; there are various national legal provisions that outline essential measures and obligations to prevent financial crimes and money laundering within the national economic landscape.
Are there any potential downsides to the SPA regulations? For example, the cost of a federal license is £4.3m – do you think this may drive a higher number of customers to black market sites?
As with any regulatory environment, I see challenges. We know that applying for a federal license to operate in Brazil is not cheap. However, there are some alternatives that allow companies, even smaller ones, to participate in the regulated market. One example is state licenses, where an operator can apply for a local license that permits companies to operate legally within a specific state in Brazil, and it is much cheaper than a federal license.
Another strategy widely used by companies that applied for a license with the SPA was forming consortiums to share a license among different brands. For instance, Bet 1, Bet 2, and Bet 3, each from different companies, can come together in a consortium for a joint application.
There are parts of the legislation outlined by the SPA that are ambiguous and could be misconstrued. Is this something you can comment on, or you believe will cause further issues?
As with any new legislation, when we move from theory to practical application, it's normal to encounter doubts and interpretative challenges. This isn't a pain point exclusive to the SPA, as it's something that has happened (and continues to happen) in various legislative scenarios. For instance, when we think of the General Data Protection Law (LGPD), which regulates how personal data should be handled in Brazil, we see that it's a law that came into effect in August 2020, and even now, we have numerous supplementary regulations being issued by the National Data Protection Authority almost monthly to assist with the law's application.
However, we can see that the SPA is very active and engaged in helping market stakeholders with their doubts and questions regarding legal application. For example, the SPA has opened an online channel with a compilation of frequently asked questions from the market, and it has also provided a specific channel to address queries about the ordinances, which is great because it's not often that we get a dedicated channel for clarifying these issues.
As anticipated, there has been a significant increase in LATAM placements at BettingJobs, particularly in Brazil. Do you foresee this trend continuing, or do you think it has reached its peak?
I believe this trend will continue to grow in the coming months and years. With the establishment of a regulated market, it's likely that we will see even greater growth in the sector within the country and, consequently, an increase in job opportunities in the region.
Additionally, something that has made me very happy is witnessing the rise in diversity within the sector, particularly among women! When I first entered the industry, there were very few of us, but now we are seeing more and more women joining the field. For example, in March of this year, we launched AMIG, the Association of Women in the iGaming Industry, which is fantastic and already has over 360 members! As other markets begin to explore iGaming in Brazil, paying for licenses in the region, attracting clients, or forming partnerships, it suggests that new jobs and opportunities will continue to emerge.
I suspect that in the coming months, the BettingJobs team will have many new job openings in Brazil, especially given its specialized consultancy and knowledge of professional profiles for each sector area. I am excited to see your operations expanding further here!
Source: BettingJobs
