Brazil’s government lays out payment rules for licensed online operators
Bookmakers required to sequester at least BRL5m to cover winning payouts while betting on credit and crypto deposits to be prohibited
Brazil’s Prize and Betting Secretariat (SPA) within the Ministry of Finance has published a 2,700-word document outlining the rules relating to payment transactions ahead of the country’s regulation of online gambling.
A headline rule within the text states that licensed operators will be obliged to keep a minimum of BRL5m (£764,000) in reserve to cover winning bets in the event of insolvency or illiquidity.
The document also says that bonuses are prohibited, along with cryptocurrency payments and extending credit to players for gambling purposes.
Furthermore, all deposits must be segregated with a financial institution authorised by Brazil’s Central Bank – Banco Central do Brazil – while all payouts must be made via an electronic bank transfer.
Licensed operators must also settle all bets within two hours of the conclusion of a sporting event or a player ending a gaming session.
The rules form part of Ministry of Finance’s regulatory framework that the government department hopes to have confirmed by the end of July, before the market’s launch later this year.
President Luiz Inácio Lula da Silva signed sports betting and gaming into law back in December, with operators set to be subject to a 12% tax rate on GGR.
Five-year licences will cost BRL30m each and each licensee will be permitted to launch three brands in the South American country.
Earlier this month, local media reported that the government was considering requiring licensed operators to use a ‘.bet’ suffix on their URLs.
When it comes to payments, the vast majority of transactions to and from offshore operators today in Brazil is via Pix, an instant payments system launched by Banco Central do Brazil in 2020 during Covid-19.
Such has been its popularity that Pix registered 42 billion transactions last year – up 74% year on year – while around 150 people use the service, which is free for individuals.
Entain has integrated Pix in a bid to regain market share in Brazil, while a slew of Pix-related betting brands has sprung up since 2020, including PixBet, BetPix and BetPix365.
Last year, Andreas Bardun, founder of Brazil-facing KTO Group, told EGR: “Pix changed everything. It is one of the reasons that some of the local operators managed to take a huge market share.”