Brazil to suspend unlicensed betting operators from October 1 as sector regulation looms

Brazil will suspend the operations of betting companies that have yet not applied for authorization from October 1, 2024, as part of a broader effort to regulate the country’s rapidly growing fixed-odds betting market, the government said on Tuesday.

The move comes ahead of the formal implementation of the regulated market, scheduled to begin on January 1, 2025, the Ministry of Finance said. The new rules will crack down on unlicensed operators, who could face fines of up to 2 billion reais ($360 million) for non-compliance.

Betting companies that have submitted license applications will be allowed to continue operations through the end of 2024, provided they meet strict requirements, including a 30 million reais ($5.45 million) grant to start operating. Additionally, they must adhere to measures aimed at preventing fraud, money laundering, and abusive advertising, the ministry said.

An adaptation period has been established for companies that applied before the deadline (September 16). They will have until the end of December to fully comply with the new regulations, including the requirement to use the "bet.br" domain starting in January 2025.

Companies that have failed to submit applications will be classified as illegal and banned from operating in the country, with their websites to be taken offline after October 10, 2024.

"As of October 11, these websites and their respective applications will be banned and will be taken offline," the Ministry of Finance said in a statement. To enforce the ban, the ministry said it would collaborate with the Ministry of Justice and Public Security, the Central Bank, and the National Telecommunications Agency.

Finance Minister Fernando Haddad highlighted concerns over gambling addiction as one of the reasons behind the regulatory push. He cited increasing reports of health problems related to gambling, likening the situation to a "pandemic" gripping the country.

"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 told reporters. "We see an urgent need to bring order to this and to work with the Health Ministry because we’re receiving many reports of health problems related to it."

Haddad emphasized that the government's regulatory framework is designed to protect families, including prohibiting bets placed through credit cards or loans.

Regis Dudena, Secretary of Prizes and Bets, underscored the government's efforts to weed out criminal elements within the betting industry before the market formally opens. "Many police operations involving companies that operate in the betting market in a criminal manner have come to light. This was the way we found to not wait until January to start separating the wheat from the chaff," Dudena said.

The betting sector in Brazil has seen significant growth since online fixed-odds betting was legalized in 2018, with major international companies like bet365, Betano, and Betfair boosting their presence through sponsorship deals with top football clubs.