Online Betting Sector Expands by 734% in Brazil Since 2021
The online betting sector grew 734.6% from 2021 to April 2024, per Datahub’s data to CNN. In Brazil, companies rose from 26 in 2021 to 79 by end of 2022, a 203% increase. In the first four months of 2024, as many new companies were established as existed in 2022. “Regulation brings more security for companies and consumers, favoring the growth of the sector,” explains Felipe Mesquita from Datahub. Sports betting was legalized in 2018, but regulation was only established five years later. In 2023, 134 companies expressed interest in operating in Brazil, according to the Ministry of Finance. Foreign interest also increased, with two companies seeking to operate in Brazil in 2023 and five in 2024. The Datahub study shows growing interest in the Brazilian market, driven by new legislation offering more predictability and legal security. Foreign companies are registering with the Federal Revenue, complying with Brazil’s fiscal and regulatory requirements. Pandemic and Social Isolation Drive Expansion of Online Businesses Mesquita notes that the online betting sector gained strength by leveraging technology’s connectivity during social isolation. “The turning point came after the pandemic, when people stopped interacting directly, giving space to technology services. The online betting sector experienced a significant boom,” explains the Datahub executive. Jhon Macario, marketing and research analyst at Datahub, reinforces that technology has popularized the business. “Previously, betting was limited to lottery outlets. Now, there’s greater accessibility via smartphones,” Macario indicates. This trend also highlights the consumer profile in this market. According to Datahub, 59.8% of bettors are between 22 and 36 years old, the main age group for this audience. “The younger generation is very connected to electronics; traveling to place a bet doesn’t even cross their minds,” adds Mesquita. Online Betting Fuels Growth in Various Economic Sectors André Gelfi, president of the Brazilian Institute of Responsible Gaming (IBJR), also highlights that this movement impacts various economic sectors, from technology, with platform development, to communication and sports in general. “The online betting sector moves billions of reais, generates thousands of jobs, and is currently very hot, especially after federal regulation at the end of last year,” he says. However, the expert emphasizes the sector’s maturation process following federal approval.“We need to identify mistakes and successes and evolve from the challenges the market encounters,” he says. “The trend is for further growth, impacting various sectors.” Macario adds that the betting movement attracts not only young people but also an older audience “due to advertising during broadcasts.” Recently, only six out of 20 teams in the Série A – the top division of the Brazilian Championship – did not have a betting company as their main sponsor. Corinthians became the seventh after its main sponsor, VaideBet, terminated the contract. “Platforms are not just for betting; a significant trend in the entertainment market involves actions with influencers, advertisements, and teams being promoted,” explains Macario. “The market has grown, is growing, and will continue to grow.” Felipe Mesquita sees a positive outlook for the market, believing its increasing structure will attract new companies and interested bettors. “There is still much room [for new companies]. The market has grown, is growing, and will continue to grow,” he states. Payment Methods as Online Betting Sector Booster The marketing and research analyst points out that one key area for online betting sector expansion is payment methods. Founded in 2018, Pay4Fun is one of Brazil’s leading online payment platforms and, in 2022, became the first payment institution in the betting segment to receive authorization from the Central Bank. The company acts as a “bridge” between betting companies and bettors. Leonardo Batista, CEO of Pay4Fun, has been in the market for 20 years, starting with an online bingo platform. From 2009 to 2017, he operated a betting house and identified payment methods as the biggest challenge, as most were irregular. This area has room for growth. “There is room for improvement in quality, both in betting houses and payment methods. Currently, there are many low-quality and irregular services,” observes Batista. Besides regulation, the sector has the opportunity to grow by “combining two national passions,” Batista notes. “Brazilians are naturally passionate about betting, and sports betting crowns this passion,” he says.However, he emphasizes that for the sector’s growth to be sustainable, responsible, and safe, a distinction is necessary: the online betting sector is for entertainment, not investment. “You see many influencers selling bets as guaranteed money or extra income. Betting is not extra money, nor is it a money guarantee,” reflects Batista. For more information about the brazilian market, licensing and payment provider, talk to our consultants Font: CNN / GMB
New Rules for Fixed-Odds Betting Authorization in Brazil
On Wednesday (22), the Ministry of Finance’s Prizes and Betting Secretariat published Ordinance SPA/MF No. 827 dated May 21, 2024, establishing rules for fixed-odds betting and conditions for commercial exploitation of fixed-odds lottery betting nationwide. Legal entities in Brazil since Law No. 14,790/2023 must comply with new provisions by December 31, 2024, or face penalties starting January 1, 2025. Only legal entities authorized by the Prizes and Betting Secretariat can operate fixed-odds lottery betting nationwide, adhering to Brazilian laws with headquarters and administration within the country. A national entity, subsidiary of a foreign firm, following Brazilian laws with management and headquarters in Brazil, may gain authorization if at least twenty percent of its capital is Brazilian-owned. Branches or subsidiaries of foreign firms abroad are ineligible. Authorization is limited to limited liability companies or corporations. New Ordinance Allows Legal Entities to Operate Up to Three Online Betting Brands for Five Years at R$30 Million The authorization, costing R$ 30 million, allows a legal entity to operate three commercial brands on electronic channels for five years. It’s personal, non-negotiable, and non-transferable. Entities may request authorization following established procedures anytime. SPA/MF may review authorization during mergers, splits, acquisitions, transformations, or changes in corporate control. Operators must submit documentation within thirty days of such changes to prove compliance. Operators can consult SPA/MF before corporate changes to avoid affecting authorization. SPA/MF will analyze such requests within 150 days, ensuring due process. Authorization applications must digitally include documents verifying legal, tax, and labor qualifications, integrity, economic-financial capability, and technical qualifications. Foreign documents must be translated into Portuguese by a sworn Brazilian translator. Legal qualification requires various documents. Economic-financial qualification involves data security, safe betting system operation, integrity, compliance, customer service, and Ministry of Finance communication. Responsible individuals must hold director-level positions. The requesting entity must register with the Commercial Registry under CNAE 9200-3/99, focusing on “Fixed Odds Betting Exploration.” Comprehensive Documentation and Integrity Proof Required for Regulatory Compliance The regulation mandates demonstrating integrity through various documents, declarations, and certificates. These include declaring the lawful origin of resources comprising the entity’s share capital, those of its controllers, ultimate beneficial owners, directors, and legal representatives, including foreign nationals. The entity must submit certificates from the Federal Police, state or Federal District Civil Police, and federal and state courts to prove the absence of convictions barring access to public office. Foreign nationals must provide equivalent documents from their countries of origin. The entity must maintain records proving the lawful origin of resources accessible to SAP/MF. Economic and financial qualification will be assessed through documents and certificates, including proof of a financial reserve of at least R$ 5 million, evidence of fully paid minimum share capital of R$ 30 million, proof of a minimum net worth of R$ 30 million, and a declaration of controllers’ economic and financial capacity (Annex X). Companies established less than a year ago must furnish an opening balance sheet, projected cash flow for the next two financial years, and a report detailing economic and financial assumptions, signed by the financial director or equivalent. Essential Integrity and Financial Requirements for Legal Entities in Betting Sector To operate more than three commercial brands, entities must make additional payments and follow procedures. Each extra authorization requires paying R$ 30 million, establishing a financial reserve of R$ 5 million, paying R$ 15 million in currency, and maintaining a net worth equal to the share capital. To demonstrate technical qualification, the entity must provide either a request protocol or a technical certificate of the betting system from a laboratory recognized by SPA/MF, confirming adherence to specified technical requirements. Comprehensive Compliance and Integrity Requirements for Betting Operators in Brazil The operator must declare (Annex IX) and implement policies, procedures, and internal controls to: prevent money laundering and terrorism financing; promote responsible gambling and prevent gambling disorders; adhere to a code of conduct and promote good practices in advertising and marketing; ensure bet integrity and prevent fraud; manage liquidity risk per SPA/MF payment regulations; maintain IT continuity as per SPA/MF betting system requirements; and establish suitable corporate governance. Additionally, the operator must detail the customer service structure in Brazil, offering support in Portuguese through free electronic and telephone channels, available 24/7 for handling complaints and inquiries. Proof of gaming, betting, or lottery experience is required from at least one member of the controlling group, including three years’ professional experience or current involvement in sector-related companies. Furthermore, evidence of compliance with administrative position requirements, registration on Consumidor.gov.br, affiliation with responsible advertising oversight organizations, and association with national and international bodies monitoring sports integrity to prevent match-fixing is mandatory. Detailed Licensing and Integrity Requirements for Fixed-Odds Betting Operators in Brazil The operator must provide a list of all licenses for the operation and commercialization of fixed-odds betting in other jurisdictions and states, including abroad, for the requesting legal entity or its controllers. This list should include the identification number, issuance date, validity period, and location. Administrators of the requesting legal entity must meet integrity requirements and have at least three years of professional experience in relevant areas or possess a higher education degree compatible with their position. During the evaluation of the authorization request, the Secretariat of Prizes and Betting of the Ministry of Finance may request additional documents or information through the Betting Management System (SIGAP). The requested documents or information must be provided within 15 days of the notification sent through SIGAP. Failure to provide the requested documents or information within the specified period, without justification, will result in the definitive filing of the authorization request. The following proofs may be submitted within 30 days of the notification: payment for the authorization fee, establishment of the financial reserve, full payment of the minimum share capital of R$ 30 million in local currency, a declaration of the lawful origin of the share capital resources, proof of a minimum net worth of R$ 30 million, a technical certificate for those who submitted the request protocol, and implementation of the bettor support system. How
Normative Instruction on Online Betting Social Contribution in Brazil
The Brazilian Federal Revenue Service (RFB) announced a significant change in Normative Instruction on Online Betting RFB No. 2,005, of January 29, 2021. The amendment, published in Normative Instruction RFB No. 2,188, of April 29, 2024, concerns the “social contribution incident on the lottery modality called fixed-odds sports betting.” In other words, this change has direct implications for bettors and the sports betting market as a whole. Let’s better understand what this means. How Normative Instruction on Online Betting Change Directly Affects the Sports Betting Market The social contribution is a tax that applies to the lottery modality called “fixed-odds betting.” Thus, this modality is regulated by item IV-A of § 1º-A of article 30 of Law No. 13,756, of December 12, 2018. Therefore, the contribution is calculated monthly and must be reported in the Federal Tax Debts and Credits Statement (DCTF), under the Social Contributions group. The payment of the social contribution must be made by the 20th day of the month following the calculation. Therefore, payment is made through the Document for Federal Revenue Collection (Darf), with revenue code 9197. If there is no banking business on the 20th, the payment deadline is postponed to the immediately subsequent business day. The inclusion of the social contribution in the DCTF represents an important change for the sports betting market. It implies greater transparency and control over betting operations, which can contribute to the sector’s security and reliability. Moreover, the change can also impact tax revenue, as the social contribution is a source of revenue for the government. The new Normative Instruction comes into effect on the date of its publication in the Official Gazette of the Union. Therefore, it is important for bettors and companies in the sector to be aware of these changes and comply with the new rules. Read more here Need Help for Normative Instruction on Online Betting Understanding? We’re here to help. Send us a message and ond our consultants will talk to you! Originaly posted by igamingbrazil.com by Paulo Cardoso
Restrictions On Financial Transactions In Brazilian Betting Sector
On April 18, 2024, the Brazilian Secretariat of Prizes and Betting of the Ministry of Finance (SPA/MF) published Normative Ordinance SPA/MF No. 615, with the general rules to be observed in payment transactions carried out by betting operators. Among these rules, there are several restrictions for the sector. The prohibitions established in this Ordinance are as follows: See the main points of the restrictions on financial transactions in the brazilian betting: To understand the Normative Ordinance, consult EGaming Services. You’ll find the best support for the iGaming business. Licenses, platforms, compliance, bank accounts, and various services to boost your business. Font: Google
New Financial Rules for Transactions In Brazil in the iGaming
The Brazilian Ministry of Finance has implemented financial rules for transactions in Brazil for sports betting and online gaming, so it could enhance security and transparency. Below are the main points of ordinance 615/2024: Safety for Bettors The regulation aims to safeguard Brazilian citizens participating in sports betting or online gaming by overseeing fixed odds betting operators nationwide. Regulated Money Flow The ordinance details the flow of money in bets authorized by the Ministry of Finance, from the transfer of funds to the payment of prizes. Authorized Payment Methods Transfers via PIX, TED, debit cards, or prepaid cards are allowed. However, funds must originate from the registered account with Bet. As a preventive measure against indebtedness, cash deposits, bank slips, cryptocurrencies, or credit cards are not accepted. Prize Payment Deadline Bets have up to 120 minutes after the conclusion of the sports event to pay out prizes to bettors. Therefore, they must be prepared for this. Segregation of Funds The regulation ensures the segregation of bettors’ and operators’ funds, preventing players’ funds from being used for operational expenses or operator debts. Mandatory Financial Reserve Authorized operators must establish a financial reserve of R$ 5 million. So, this reserve ensures payment of prizes and other obligations to bettors, especially during insolvency or illiquidity. To access top-tier services in the igaming industry, visit EGaming Services. Speak with our consultants today to learn more. Font: Google
7 Steps to Start a Betting Website
Creating a gaming operation is a venture that involves various legal, technical, and security aspects. Here are 7 Steps to Start a Betting Website. Consider then if you’re think about to get into this business. 🔎 Research and Planning Before starting, it’s important to understand the legal regulations related to gambling in your jurisdiction. Additionally, you need to have a solid business plan, including your value proposition, target audience, marketing strategy, etc. 📑 Registration and Licensing Many jurisdictions require operators of betting websites to obtain specific licenses. This can be a lengthy and costly process, depending on where you are operating. You can read more about EGaming Turnkey Solutions for Gaming Licensing 🎰 Gaming Platform A robust and reliable platform is a key factor in the success of your gaming operation. It must have an appealing interface and offer games from the best casino providers. 💰 Payment Service Providers It will be necessary to integrate payment systems so that players can automatically deposit funds into their betting accounts and withdraw their winnings. This involves setting up secure and reliable payment gateways. 🔒 Security and Data Protection Security is crucial on a betting website, both to protect players’ data and to ensure the integrity of bets. This includes SSL encryption, fraud protection, player identity verification, Anti Money Laundering policies etc. ☎ Customer Support You will need a team to handle questions, complaints, and technical issues from customers. Good customer support is crucial to keep players satisfied and confident on your website. 📣 Marketing and Customer Acquisition After launching the website, you will need to promote it to attract players. This may involve online advertising, content marketing, affiliate partnerships, etc. 🚀 You are Ready to Start a Betting Website of Your Own! Creating a betting website is an investment with many steps, and before starting any venture, it’s essential to conduct extensive research and seek appropriate legal and regulatory guidance. EGaming Services is a company that provides end-to-end services in the iGaming segment and will help you develop your project. Let’s talk? 😃 👍 Font: Google
What Is a Gaming License and Why You Need One
A common question for the begginers in the market is: What is a Gaming License? A gaming license is a legal authorization granted by a government authority or regulatory body. It allows a company to operate gambling or betting within a specific jurisdiction.This license is a legal requirement in many countries to ensure that gaming operations are conducted in a manner that is fair, transparent and safe for players. If your website offers sports betting, it is engaged in gambling activities, which may be subject to legal regulation. Therefore, you need a gaming license to operate legally and avoid legal problems. Reasons why a sports betting site needs a license include: ⚖ Legal Compliance Operating a betting site without a license is illegal in many countries. Obtaining a license demonstrates that you are operating within established laws and regulations. 🔒 Consumer Protection Gaming licenses often come with stringent requirements to protect players, such as responsible gaming policies, protection of users’ personal data, and fair payment guarantees. 🤝 Credibility and Trust Having an official gaming license can increase your site’s credibility in the eyes of players. They tend to trust licensed operators more as they know they are subject to regulation and oversight. 🔑 Access to Regulated Markets In many countries, online gambling operators can only access regulated players and markets if they have a valid license in that jurisdiction. 💸 Anti-Money Laundering and Fraud Regulatory authorities often impose strict measures to prevent illegal activities such as money laundering and fraud, helping to protect players and the integrity of the market. Understand local gambling laws, apply for the right license to operate your sports betting site legally and ethically. EGaming Services provides you with full support in obtaining game licenses for worldwide operations. Let’s talk?
5 Reasons to Invest in a Betting Website of Your Own
Invest in a Betting Website with sports betting and online casino can be considered good for several reasons. Here are 5 good motivations to start your own betting website. 1- Growing Market: The sports betting and online casino market has grown significantly in recent years and shows no signs of shrinking. On the contrary: with the ease of access to the internet, the growing improvement in mobile devices technology and the great marketing carried out by the betting market, the tendency is for it to become one of the most profitable industries in the world. 2 – Profit Potential When well managed, a betting website can generate substantial profits. The return rates can be attractive, especially if you can attract a large number of players. 3 – Revenue Diversification In addition to sports betting, you can offer casino games such as slots, roulette, and blackjack in thousands of themes and engines that will improve the experience of the users in your website. This diversifies your revenue sources and attracts different types of players. 4 – Digital Marketing Digital marketing strategies such as SEO, social media, influencers and affiliate partnerships can increase your website’s visibility and attract players. Investing in marketing is essential for attracting traffic and building a solid customer base. 5 – Regulation Worldwide, the popularity of betting has streamlined regulations, as in the case of Brazil, where the sports betting and online casino market is becoming safer and more transparent. This can attract investors and players seeking a reliable experience. Invest in a betting website, like any investment, it is important to conduct thorough research, understand local regulations, and ensure that your website complies with applicable laws. Consult with the experts at EGaming Services to understand how investment can become a profitable business. #investments #startup #markets #igaming #gaming #betting Font: Google
