Brazil warns gambling companies to obtain license or face exodus

Brazil is urging companies that have not obtained licenses and are running fixed-odds betting products to do so by the October cut-off deadline. Failing to comply would result in an enforcement action that will turn the still unlicensed companies out of the Brazilian iGaming and sports betting market.

Brazil tells companies to comply with licensing or start packing

The country has gone through a long, sinuous, and riddled process of legalizing and formalizing the rules of gambling in the country, with the market expected to get underway next year. Part of the reason why Brazil wants gambling to be fully regulated is to start addressing concomitant social ills, such as gambling-related harm.

Under the veneer of nobility, however, the government has not hidden the fact that it is looking to plug public spending gaps with the revenue windfall from gambling as well.

Cited by Reuters, Finance Minister Fernando Haddad, one of the proponents of the regulated gambling market in Brazil, had this to say:

"This is related to a pandemic that has taken hold in the country, this issue of psychological addiction to gambling, and we need to start addressing it."

Haddad insisted that bringing all operators under a regulatory framework is first and foremost a move designed to protect consumers, the families and individuals who may be otherwise impacted by gambling that is not regulated and does not come with the necessary player protections.

Of course, changing to a regulated market is not easy or cheap. Companies that wish to be certified need to bear a $5.5m fee first. They will have to comply with a diverse range of rules that will limit their operations, put a strong onus on onus on them to comply with anti-money laundering laws, and follow strict advertisement rules.

Enforcement action to start from October 11 onwards

However, Brazil is also one of the fastest-emerging crucial markets in the world. Flutter Entertainment, one of the world’s largest companies, has made a move for $350m locally, acquiring a stake in the company behind Betnacional.

The size of the investment signals that Flutter Entertainment is interested in pursuing long-term gains in the market.

In the meantime, Brazil is reading to shutter any website that has not complied by October 10. From October 11, authorities will act with the help of the Ministry of Justice and Public Security, the Central Bank, and the National Telecommunications Agency to ensure that non-authorized, i.e. licensed websites, can no longer operate.

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