Government announces rules for regulating online betting and gaming in Brazil

On Wednesday (31) the Ministry of Finance announced the ordinance that establishes rules for online betting and gaming, including fixed-odds sports betting. It is expected that, from January 2025, Brazilian platforms will be able to operate legally, aiming to guarantee a random nature and clarity in the bettor's potential winnings.

Games held in physical locations using equipment, however, remain illegal. And those categorized as fantasy sports, multi-betting, and peer-to-peer modalities are excluded from the definition of online games.

The regulation requires games to offer a minimum return of 85% in prizes and prohibits promises of future winnings or impositions on game selection. These measures were adopted to make online betting and gaming a safer and more reliable environment, since, despite significant growth, distrust of the sector still persists in Brazil.

Rules established

The Ministry of Finance released on Wednesday (31) the SPA/MF Ordinance No. 1,207, which establishes the rules for online betting and games, including those of the fixed-odds modality, such as sports betting (bets).

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_{A man poses for a photograph with the online betting site Bet365 displayed on a smartphone (Photo: reproduction/ PAUL ELLIS/AFP/Getty Images Embed)}

Starting in January 2025, online gambling and gaming platforms based in Brazil that are certified will be able to operate legally. According to the guidelines, online games must be random, such as slot machines, where the outcome is unpredictable in relation to symbols, figures or objects. In the fixed-odds format, it must be clear to the bettor how much he or she can win when placing a bet. The industry argues that games such as Fortune Tiger, commonly called Jogo do Tigrinho and Aviãozinho, are classified as online games.

The bettor will have access to essential information, such as the multiplication factor, which indicates how much they can win if they win, as well as the possibilities and order of symbols that can result in a win.

However, playing games in physical establishments, such as slot machines, are categorized as games of chance and are therefore illegal under the law.

_{Slot machines in a physical gaming hall (Photo: reproduction/ Kvnga/ Unsplash)}

Furthermore, it was established that each game must ensure a minimum return of 85% in prizes to bettors, with the prohibition of promises of future winnings, negative balances for bettors, or the obligation to choose certain games.

The ordinance also clarifies which activities are not considered online games and, therefore, cannot be offered. These include fantasy sports, multi-betting games, and peer-to-peer modalities, in which the agent merely provides the environment for bettors to play without their intervention.

Authorization

The ordinance, published in the Official Gazette of the Union at the end of May, establishes criteria for the authorization of betting companies, known as “bets”. They must meet five categories: legal qualification, tax and labor regularity, suitability, economic-financial qualification and technical qualification. From then on, companies can gather the necessary documentation and register with the Betting Management System (Sigap). Those who obtain authorization and pay a fee of R$30 million will be able to explore up to three brands in Brazil for five years.

The Ministry of Finance has set these criteria to protect bettors and ensure that companies have adequate governance. Starting January 1, unauthorized betting will face penalties. The Ministry of Finance’s Prize and Betting Secretariat has 180 days to evaluate the requests, and companies that request authorization by August 20 will receive a response later this year, with the authorizations being published simultaneously. So far, only five companies have submitted authorization requests: Kaizen (which owns the Betano brand), MMD Tecnologia, Ventmear Brasil, Big Brazil Tecnologia and SPRBTBR.

The Biggest X-Ray of the Fan

Online betting companies seek to offer an immersive experience, combining classic games with symbols such as fruits and stars with themed options that explore elements of mythology and fantasy. This diversification has a special appeal for young audiences, attracting the attention of this age group with engaging dynamics. According to the survey “The Greatest X-Ray of the Fan”, commissioned by CNN/Itatiaia/Quaest, the greatest presence of online bettors is noted among young people aged 16 to 30, where 25% of those interviewed reported having already placed bets.

The survey, which interviewed 6,373 people between April 27 and May 1, 2024, also shows a detailed overview of the variation in betting according to age group, being 16% among individuals aged 31 to 50 and only 7% among those aged 51 or over. When analyzing the division by gender, 22% of men reported having already bet, while the number among women is only 9%. When looking at income, the differences are subtle: 13% of those who earn up to two minimum wages have bet, rising to 16% among those who earn two to five minimum wages and reaching 17% among those who earn more than five minimum wages. With a margin of error of 1.4 percentage points and 95% reliability in online betting.

Bettor's sentiment

Historically, in Brazil, online gambling and games have been viewed with suspicion, often being associated with losses or unfair results, and it is not uncommon to hear reports of people who have lost or won a lot of money in this segment. A survey by ENV (Esse N Videri Limited), published in May this year, revealed that only 19% of respondents consider these games “fair”, while 35% see them as “unfair”. Furthermore, 45% did not take a clear position, suggesting that regulating this market could increase credibility.

Featured Photo: The Bet 365 logo displayed on a mobile phone, basketball and playing cards are seen in this photo (Photo: Jakub Porzycki / NurPhoto / Getty Images Embed)