The regulatory gambling landscape in Brazil has undergone significant transformation in the last few years, with the enactment of Law No. 14,790/2023 on December 29th, 2023, known as the "Betting Law." This legislation is aimed at regulating online gambling and betting activities and targets bringing transparency, security, and integrity to the sector. As of January the 1st, 2025, the regulated online gambling market officially commenced, with the Secretariat of Prizes and Bets (SPA) overseeing its implementation.
This article provides an in-depth overview of the current Brazilian online gambling regulations for both Business-to-Consumer (B2C) casinos and sportsbooks and Business-to-Business (B2B) companies, such as online casino software providers. Brazil's regulatory framework offers specific licenses for entities involved in the gambling and igaming industry:
B2C Licenses: These are granted to operators providing gambling services directly toconsumers, such as online casinos and sports betting platforms.
B2B Product Certifications: These are designated for companies offering services to gambling operators, including online casino software providers wishing to provide their games to Brazilian licensed operators.
The licenses encompass a variety of gambling activities, including:
Online Casino Games: Games of chance such as slots, roulette, and blackjack.
Sports Betting: Fixed-odds betting on sports events, both domestic and international.
Fantasy Sports: Virtual games where participants assemble imaginary teams based on real players' performances.
Bingo and Poker: Recognized as games of skill, these are also covered under the current licensing regime.
For B2B providers certification of product is required for online casino games which are defined as follows: “Online game: an electronic channel that enables virtual betting on a game in which the result is determined by the outcome of a future random event, based on a random number generator, symbols, figures or objects defined in the rule systems”. Certification is also required for the provision of casino content aggregator.
Applicants seeking a gambling license in Brazil must meet several stringent criteria:
Incorporation: Entities must be headquartered in Brazil, ensuring domestic accountability.
Financial Solvency: Demonstrated financial stability and lawful origin of funds are mandatory.
Technical Compliance: Operators must utilize independently certified systems and games, adhering to technical standards set by the SPA.
Responsible Gambling Measures: Implementation of policies to prevent underage gambling and promote responsible gaming practices is required.
Anti-Money Laundering (AML) Protocols: Robust measures to prevent money laundering and terrorist financing must be in place.
Game (and RGS) Certification: In general terms, the Ordinance stipulates, in its section 4, that online games must present, at the time of the bet:
The multiplication factor for each unit of national currency bets, in the amountto be received by the bettor in case of a prize;
The result of the online game, which must be determined by an outcome basedon a random number generator, symbols, figures or objects defined in its rule system; and
The payout tables, which must cover all possible winnings for the better.
Additionally, the games made available by betting houses to players must be certified by specific entities with operational capacity recognized by the SPA/MF, pursuant to Ordinance No. 300/2024, and presented by the betting operators. The documents must be Brazilian certificates, issued in the country, by SPA/MF appointed laboratories.
The financial obligations for obtaining and maintaining a gambling license in Brazil include:
License Fee: A one-time payment of BRL 30 million (approximately €6 million) for a five-year license, covering up to three commercial brands. An additional license is required for every three brands.
Operator Taxes: Licensed operators are subject to several taxes:
Gross Gaming Revenue (GGR) Tax: A 12% tax on GGR, which is the total amount received in bets minus the total amount of winnings. This tax is intended exclusively for social purposes.
Corporate Income Tax (IRPJ): A 15% tax on profits, with an additional 10% surcharge on profits exceeding BRL 20,000 per month.
Social Contribution on Net Profits (CSLL): A 9% tax on net profits.
Social Assistance Contributions (COFINS and PIS): Combined, these contributions amount to 9.25% of the operator's revenue.
Service Tax (ISS): This municipal tax ranges from 2% to 5%, depending on the municipality where the operator is based.
Monthly Inspection Fee: Operators are required to pay a monthly inspection fee, ranging from 0.17% to 0.30% of their GGR.
Withholding Tax: Foreign companies may be subject to Withholding Tax depending on the territory from which they operate. This can potentially be as high as 25%, if the company is resident in what is considered by the Brazilian authorities to be a “Tax Haven”.
Player Winnings Tax: Players are taxed at 15% on their net winnings exceeding BRL 2,824. Operators are required to deduct this tax at the source on player winnings exceeding this amount, ensuring immediate compliance and simplifying tax administration.
Obtaining a Brazilian gambling license offers several advantages:
Market Access: Licensed operators can legally access one of the world's largest gambling markets, with over 200 million potential customers.
Consumer Trust: Licensing enhances credibility and trust among consumers, leadingto increased patronage.
Advertising Opportunities: Licensed entities can engage in regulated advertising, expanding their reach within legal frameworks.
The B2B Scenario: For B2Bs it is possible to operate in Brazil from a foreign entity however there are likely to be a number of disadvantages. See two potential operational models are summarized below:
Scenario 1 – Direct Licensing from Malta: ESA Gaming will license the software directly to Brazilian betting and gambling companies. In return, thosecompanies will pay license fees; and
Scenario 2 – Licensing through an Entity in Brazil: ESA Gaming will set up an entity in Brazil, thus entering into local licensing agreements with Brazilian betting companies. In this scenario, the transaction will be entirely domestic, as both payment and service performance would occur
in Brazil.
The process to obtain a gambling license involves several steps:
1. Preparation:
Gather all necessary documentation demonstrating compliance with financial, technical, and legal requirements
2. Submission:
Apply to the Ministry of Finance, providing detailed information about the company's structure, financial health, and operational plans.
3. Evaluation:
The SPA reviews the application, assessing compliance with all regulatory standards.
4. Approval and Payment:
Upon approval, the applicant pays the license fee to receive the official license.
5. Operational Compliance:
Licensed operators must continuously comply with regulations, including regular reporting and audits.
With a population of over 214 million, and high internet penetration rate (approx. 78%), Brazil presents a lucrative opportunity for international online gambling operators. The market’s growth prospects are highly promising, thanks to a long-standing cultural affinity for games of chance and, according to Statista, Brazil’s online gambling sector is projected to expand at a compound annual growth rate of over 18%, potentially reaching billion Euros by 2027. As discussed above the recent regulatory developments have further reinforced this forecast, paving the way for even greater expansion.
Gambling has been an integral part of Brazilian culture for centuries, and, whilst Sports betting is the most popular gambling segment in the country, casino has shown rapid growth in recent years, driven by entertainment, recreation and the involvement of high profile social influencers.
Several social factors make Brazil particularly attractive to iGaming operators. Brazilians are among the most receptive audiences for online gambling, driven by a competitive spirit, a deep-rooted passion for football, and a strong appetite for entertainment.
Brazil's comprehensive regulation of igaming marks a significant shift towards a structured and secure gambling environment. The clear delineation of license types, covered games, applicant requirements, and associated costs provides a robust framework for both B2C and B2B companies.
The true test of this regulatory framework will on how players react to the imposition of a tax on winnings and the speed at which the SPA will be able to process and issue licences.
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