Brazil's betting regulation allows only instant digital payments

Since December 2023, the betting industry has been operating in a complex regulatory environment under Projeto de Lei 14.790, the sports betting bill.

The Ministry of Finance proposes to supervise all gambling activity. The main priorities of this federal regulatory project are putting governance frameworks in place to ensure fairness, security and accountability, while enacting anti-fraud rules. Brazil is not only the largest market, but also the largest unregulated market in the world. That is about to change, and below you can learn more about the details of the new framework.

First, the companies and operators most affected by the new rules are:

✅ Virtual betting operators
✅ Land-based betting operators
✅ Operators of betting on real sporting events
✅ Operators of sports-related virtual events

Going legal: how much will it cost?

Bettors will have 15% of their prize amount withheld, and operators will pay 12% of their declared revenue in taxes. Most of the revenue the Brazilian government collects will be reinvested in sports (36%) and tourism (28%), followed by public security (12%), and social security and education (10% each). It’s worth noting that taxes on bettors will only apply to withdrawals starting at R$2,122. Overall, the government expects to collect R$6 billion to R$12 billion in taxes every year.

The Brazilian gaming license is estimated at R$30 million (approximately US$6 million) to operate in the country for 5 years. Betting companies can run up to 3 different brands under the same license.

If you’d like more details on how to legalize your betting operation, get in touch with our team.

All operators that want to enter or remain in the Brazilian market must also become part of the Brazilian industry: companies can no longer operate virtually under a Curaçao license, as they usually do. To that end, the Ministry of Finance has set out some rules for the new regulation:

✅ Have at least 20% of the company registered in Brazil
✅ Have a member of the company’s team appear before the Regulatory Group
✅ Meet all technical requirements under Brazil’s LGPD (General Data Protection Law)
✅ Have anti-money laundering and counter-terrorist financing policies
✅ Promote responsible gambling
✅ Ensure the integrity of bets
✅ Connect to Payment Institutions authorized by the Central Bank of Brazil
✅ Monitor user transactions

When can we expect these changes to take effect?

Simone Vicentini, Deputy Secretary of Prizes and Betting at the Ministry of Finance (SPA-MF), who signs the regulation, set out a Regulatory Agenda organized in phases, in order of priority:

I – Payment Methods, Betting Systems and Authorization;

II – Money Laundering and Other Crimes, and Rights and Obligations;

III – Online Games, Enforcement and Sanctions;

IV – Responsible Gambling and the Social Allocation of Taxes.

The regulation is expected to be in place from December 31.

How will payments be affected by the regulation?

In mid-April 2024, the discussion on Payment Methods and Authorizations was concluded, as you can read here. So as soon as the regulation takes effect, every betting merchant must be linked to a Payment Institution authorized by the Central Bank of Brazil, which will be regularly monitored by federal agencies. Fortunately, companies that want to operate within the law can count on Trio as a partner.

Pix will play a central role in this change

Studies show that deposits made through Pix, Brazil’s instant payment system, lead the sports betting segment and are expected to reach R$62 billion by the end of 2024.

The reason is simple: betting operators receive the customer’s deposit immediately. And for winners, the prize lands in their account within seconds. Collecting with Pix makes all of this possible:

✅ Fast receipt of bets (top-ups)
✅ Easy prize payouts (withdrawals)
✅ Instant, data-rich transaction receipts
✅ Availability 24/7, especially during weekend playoffs
✅ Protection of confidential customer data

Best of all: you can integrate it into your system in a week.

Pix over credit cards and crypto

Under the same resolution, all types of bets may only be placed via Pix, direct transfer (TED, Brazil’s wire transfer), debit cards or prepaid cards. To match the player’s data with the deposit, bettors will need an account registered on the betting site’s platform. The rule states that bettors may transfer funds to place bets as long as the funds come from the account registered with the betting site.

Cash, boletos (bank payment slips), crypto assets or any other alternative deposit method that could make it harder to identify the origin of the funds will not be accepted. Credit cards and any other postpaid instruments will not be accepted either, as a prudential measure to discourage Brazilian households from taking on debt.

Betting with cryptocurrencies will also be prohibited, since the crypto market cannot be audited by government security.

So operators will mainly depend on offering the fastest, most secure Pix connection, or their own branded wallets, to retain customers.

Essential add-ons to payments

Additional compliance policies will be added to the process of creating a registered account and requesting withdrawals and deposits. In this KYC (Know Your Customer) process, which can be extended to the payment arrangement, details will matter. Fraud cannot happen, so protecting both operators and bettors must be payment providers’ top priority. With that in mind, it will be crucial to include add-ons to payments, such as biometric or facial recognition, blocklists for politically exposed persons, seniors, minors under 18 and board members of sports teams, and proof of life.

Trio offers all of these features as a single product.

Find out how Advanced Compliance combined with the best real-time payment provider built for the online betting market can put you ahead of the game here.