Brazil is a significant player in the gaming industry, with considerable influence in the iGaming sector.With the global gaming industry valued at $257 billion and Brazil accounting for 21% of all online gambling traffic, its presence is undeniable.

Recent shifts in attitudes and adopted regulatory changes signal the start of Brazil’s journey towards a dynamic player in the iGaming arena. With sports betting already legalized, Brazil is ready to expand into other forms of real-money gaming, including online and land-based casinos.

Recent legislative milestones, such as the approval of online gambling by Brazil’s chamber of deputies and the enactment of a new regulatory framework, mark huge strides towards a regulated iGaming environment.

As Brazil enters this new era, understanding the complexities of the iGaming licensing system becomes essential for market entry as an operator.This article explores Brazil’s evolving iGaming regulations, highlights the importance of understanding the licensing system, and offers insights for navigating this dynamic market.

Evolution of gambling laws in Brazil

Gambling has deep roots in Brazilian culture despite the 1946 blanket ban. Due to the prohibition, Brazil did not develop formal regulations for gambling until recently. Over time, public pressure led to some easing of restrictions.

The regulatory landscape shifted dramatically in 2015 when social and fantasy betting became legal. Still, it remained unregulated, and Brazilian laws applied only to domestic operators, leaving a gap that allowed international companies to target Brazilian customers.

Efforts to regulate sports betting began in earnest in 2018, culminating in significant legislative action in 2022.

Finally, in 2023, the Brazilian president approved the regulatory framework for sports betting and iGaming, signing Bill 3,626/2023 into law. The changing landscape of gambling laws in Brazil is poised to impact the industry significantly, particularly for payment operators.

The impact of evolving gambling laws on payment operators in Brazil.

As new regulations aim to ensure responsible gambling and secure transactions, operators must adapt to a more stringent legal framework. Here’s how these changes will affect them:

Licensing process: Operators must file applications for a federal license, meeting legal and regulatory requirements, including a 30 million BRL license fee. Payment operators need to prepare for these financial and administrative obligations. Gaming operators active in Brazil must secure a license by the end of 2024 or face penalties starting on January 1, 2025.

Partnership and cybersecurity: To qualify for a license, operators must have a Brazilian partner with a minimum of 20% of the company’s capital and implement robust cybersecurity systems. Payment operators must ensure their systems are secure and compliant.

Advertising restrictions: The bill prohibits unlicensed operators from advertising in Brazil and bans certain B2B partnerships. Payment operators need to revise their marketing and partnership strategies to comply with these restrictions.

License renewals: Licenses are valid for only five years, emphasizing the need for ongoing compliance and periodic renewals. Payment operators must stay updated with the evolving regulatory landscape to maintain their licenses.

The evolving gambling laws in Brazil demand significant adjustments from payment operators. They need to navigate the new regulatory environment by complying with local requirements while contributing to a responsible and secure gambling industry in Brazil. Understanding the new regulatory environment is vital to enter the iGaming market.

Regulatory compliance requirements for license holders in Brazil.

Brazil’s evolving gambling laws introduce comprehensive regulatory compliance requirements for operators looking to enter the market. These regulations ensure responsible gambling, enhance security and foster local involvement.

The new regulations for gaming operators in Brazil introduce significant taxation and financial commitments, aiming to ensure a well-regulated and financially stable industry. 

Payment operators are required to integrate advanced verification systems to handle these processes efficiently, ensuring transactions involve only bettors over 18 years old.

Know Your Customer (KYC) and Anti-Money Laundering (AML) compliance are critical under the new regulations.

• KYC compliance: Ensuring customers’ authenticity is paramount. KYC procedures help operators establish trust and credibility by verifying their users’ identities.

• AML compliance: Implementing robust AML solutions is essential to safeguard the industry from illicit financial activities. Operators must prevent money laundering and financial crimes to maintain regulatory compliance and industry integrity. These are areas where Zimpler has strong European expertise. 

The new regulatory landscape in Brazil demands a high level of compliance from iGaming operators, but a well-regulated gambling environment does offer various benefits.

Benefits of a regulated iGaming market in Brazil.

The Brazilian iGaming market has experienced growth of 250% over the past two years, highlighting its immense potential. This surge is fueled by several key factors that create fertile ground for continued expansion.

The market is expected to grow at an impressive annual rate of 16.51% from 2024 to 2028, reaching a volume of $3.63 billion by 2028.

The online casinos segment alone is projected to hit $1.11 billion in 2024. This growing sector offers substantial tax revenue opportunities that Brazil can’t afford to ignore, especially given the country’s recent economic challenges.

There are several key benefits to having a regulated iGaming market:

• Revenue growth and economic recovery: The anticipated growth in the iGaming market presents a vital opportunity for economic recovery. Brazil’s economy has slipped from the world’s 7th largest to the 13th in just over a decade. The influx of tax revenue from the regulated iGaming market could provide a much-needed financial boost, aiding economic stability and growth.

• Safer gambling environment: Regulation brings with it enhanced safety measures, reducing the risks of fraud and other criminal activities. By enforcing strict and well-documented regulations, Brazil can create a safer and more secure gambling environment. This not only protects consumers but also boosts confidence in the market, encouraging more participation and investment.

• Attracting investors: A well-regulated iGaming market is attractive to investors. Establishing clear online gambling and sports betting regulations opens Brazil to new and diverse ecosystem. A competitive and fair landscape, backed by robust regulations, ensures that both new and existing companies can operate ethically. This helps to prevent unethical practices and promotions, fostering a trustworthy and vibrant market.

The post-licensing scenario for Brazil’s iGaming market promises significant economic and social benefits, transforming it into a cornerstone of its economic recovery.  

Navigating the licensing process in Brazil presents significant challenges for iGaming operators, but with the support of the right payment partner, there are also many opportunities.

Zimpler: Trusted payment partner in Brazil’s evolving iGaming market.

Zimpler supports gambling and iGaming operators worldwide in meeting their KYC (Know Your Customer) and AML (Anti-Money Laundering) obligations, safeguarding them from fraud, and facilitating seamless customer onboarding across various jurisdictions. Zimpler stands out through:

• Flexible API

Our flexible API integrates smoothly with your iGaming platform, providing an effortless user experience that engages users. 

Whether it’s a desktop or mobile platform, local or global, Zimpler’s international reach and multi-currency support ensures our merchants are always playing across borders.

• European experience with Latin American expertise

We are our merchants’ trusted payment partner in Brazil, combining European regulatory expertise with local knowledge. Powered by Pix, Brazil’s preferred instant payment technology overseen by the Central Bank of Brazil, our solutions offer instantaneous processing 24/7/365, with high customer preference and conversion rates.

• Superior user experience and local expertise

Our clients’ users will love our fast, intuitive flows, customizable to any brand. Partnering with us means gaining a long-term relationship with outstanding service backed by our world-class team of local experts in Brazil. 

We handle the unique challenges of iGaming, having served this sector since 2012.

• Cutting-edge solutions with Pix

Pay and get paid in seconds with solutions boasting acceptance rates up to 94% and conversion rates up to 97.5%. Built to maximize Pix, our services include:

• Pix Deposits: Seamless and safe, with quick processes for known users and CPF handling for first-timers.
• Pix Payouts: Fast payouts to the same CPF used for deposits, minimizing fraud and maintaining excellent user experience.
• Pix Zimpler Go: Combines quick registration, deposits, and payouts into a two-step process, boosting first-time depositors by up to 4%.
• Pix Hosted Flow: Integrates directly via API, providing a seamless payment experience with reduced drop-off rates.

• Ready for Brazil

Brazil’s iGaming market is evolving with new regulatory, legal, and license requirements. Zimpler has served operators in regulated markets since 2012 and is ready for Brazil’s iGaming licensing regime. 

With Zimpler payments, you’re prepared to navigate Brazil’s dynamic regulatory landscape.

The Brazilian iGaming market is poised for significant growth, offering substantial opportunities for operators willing to invest in this vibrant sector.

Final thoughts.

Brazil’s evolving gambling laws present challenges and opportunities for payment operators.

Adapting to the new regulatory landscape requires investment in advanced technologies for identity verification, compliance with licensing requirements, and adjusting marketing strategies to adhere to advertising restrictions.

With the right approach, payment operators have a unique opportunity to not just navigate these changes successfully, but also to play a pivotal role in shaping a responsible and secure gambling industry in Brazil.

Partnering with payment solution providers experienced in the local market, like Zimpler, can further streamline the process, offering support for KYC and AML compliance, fraud prevention, and seamless customer onboarding.

With Zimpler, payment operators can confidently navigate the complexities of Brazil’s iGaming market while ensuring the safety and satisfaction of their users.

Ignite the payment revolution.

The information contained in this post is intended for informational purposes only, and should not be relied upon for professional advice of any kind. Zimpler does not make any representation or warranty as to the completeness or accuracy of the information, and assumes no liability or responsibility that may result from reliance on such information.