Brazil Sets the Stage for Gaming and Gambling Regulations in LATAM

Brazil is the largest economy in Latin America with an estimated 212 million people and a strong sports-related culture. Yet, until recently, a nearly 80-year-old ban on gambling stymied opportunities for growth in this sector.

The winds of change finally began to blow in 2018 with the creation of a regulatory framework. This framework continued to expand over the ensuing years leading to the establishment of licensing and compliance requirements for gaming and betting in December 2023. In 2024, Brazil entered a new era with the creation of the Secretaria de Premios e Apostas (SPA) within the Ministry of Finance.

The SPA comprises three departments that collectively are responsible for the entire context of the regulatory process – from authorisation to monitoring and supervision to sanctioning operators for non-compliance. The SPA works closely with other regulators in Brazil such as those agencies overseeing the financial markets. This organised, collaborative approach facilitates the development of policies and the implementation process.

With the SPA as the main regulatory authority, Brazil is taking the lead in Latin America to establish a framework and guidelines for responsible gaming and gambling. Other countries in the region are watching the developments closely, looking to springboard off the insight and structure of Brazil’s success.

What these changes mean and how they will develop going forward were among the topics of a recent LexisNexis® Risk Solutions® webinar. Eloise Faria, FCC Market Planning, Latin America, and Katarina Pranjic, Head of Regulation for the UK and Ireland, shared their views on the emerging gaming and gambling landscape in Brazil and how operators can position themselves to take advantage of the many opportunities in this burgeoning market.

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Emerging regulatory framework

“Creation of the SPA was a watershed event,” said Faria. “It is a foundational force that is quickly moving Brazil’s regulatory landscape forward.”

Nowhere is the impact of the SPA more apparent than in the past year. The SPA was busy throughout 2024, publishing more than 10 ordinances to address various aspects of gaming and gambling. New regulations included technical and security requirements, anti-money laundering and fraud prevention, payment methods, and guidelines for responsible gaming and advertising. Active gaming operators were given until the end of 2024 to meet the technical standards to secure a license and avoid penalties.

The transition period to comply with the new laws has now passed. Only companies that submitted their authorisation request to the SPA by 17th September were permitted to continue operating until the end of 2024. Beginning January 2025 when the new laws come into effect, only licensed companies can legally operate in Brazil.

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The UK sets an example

In contrast to Brazil’s regulatory framework, which was developed holistically from the onset, the UK’s gaming and gambling regulations evolved over time beginning with the Gambling Act of 2005. As a result of this slower evolution, the UK framework “had time to develop many layers, making it extremely robust,” said Pranjic.

In addition to covering online gambling and new generation gaming machines, the Gambling Act established the Gambling Commission as the primary regulator. Gaming and gambling operators fall under anti-money laundering regulations as an obliged sector and must comply with comprehensive financial crime controls. The Gambling Commission’s license conditions and codes of practice (LCCP) sets detailed requirements for operators. Sanctions screening, ongoing transaction monitoring and performing customer due diligence and enhanced due diligence for high-risk scenarios are among the compliance requirements.

The UK also takes a hardline approach to responsible gambling. Advertising and marketing are tightly controlled to prevent underage participation. Operators must monitor customer behaviour to identify problematic gambling as well as contribute to research, education and treatment of gambling related harm.

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Challenges for operators

While Brazil is taking cues from the UK and making fast progress building its regulatory framework, the rest of LATAM is keeping a close eye on Brazil and moving more slowly. As a result, each country in the region is at a different stage of regulatory development.

Columbia, for example, has an established regulator and measures in place to ensure operators are in compliance. Argentina, however, has no national gaming regulator – oversight is performed by each province, resulting in different rules and regulations across the country. Peru and Mexico are expected to introduce new regulations in 2025. At the other end of the spectrum is Costa Rica, which is an operator’s paradise with no regulations at all for betting platforms.

The different scenarios, different rules for the various entities, and different compliance obligations from regulatory bodies in each country are a formidable hurdle for companies looking to legally operate in the region. Companies need a holistic view to gain context and understand all the moving parts in the gaming and gambling ecosystem. Policies can’t be a box-ticking exercise. They must be agile and applied in a practical way to support the cultural nuances of each country and the structure of the business.

Using the right technology can help operators better support users as well as protect themselves. Behavioural intelligence, eIDV, screening solutions, transaction monitoring solutions, and risk orchestration platforms are among the various technologies available. They enable operators to implement processes and solutions for understanding users (is the user the right age?); managing risk (is the user sanctioned or on any watchlist?); and identifying the flow of money (do we know the source of money and where it is going?).

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Three pillars: The recipe for success

The emerging regulatory framework and complexity of requirements in Brazil present a challenging environment for operators to navigate. Robust AML programs and risk assessment are crucial for compliance and for avoiding fines and reputational damage. Know your customer (KYC) and identity verification must be conducted from onboarding and throughout the relationship to capture changing risk.

Faria believes that successful adoption of the new regulatory requirements in Brazil is best achieved with a collaborative approach between technologists and operators built on three pillars: technology, data, and expertise.

Technology brings innovation and capabilities for compliance. Data delivers insights to facilitate a faster and more accurate decision process. Finally, expertise is critical as it combines the knowledge of professionals that have experience in the Brazilian market with those from jurisdictions with more mature gaming regulations. Bringing this expertise together enhances the vision for more effective policies and procedures for the gaming and gambling market.

The opportunities for international gaming and gambling operators are vast – not only in Brazil, but in other LATAM countries, which are expected to follow Brazil’s lead. Operators that understand and can meet the complex compliance requirements of the evolving regulatory framework in Brazil will enter the market with a competitive edge – one that will serve them well in building their business across other jurisdictions.

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Watch the webinar, Navigating Gaming and Gambling Regulations in Brazil to learn more about this burgeoning market and how to position your company for success.