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Estimated at $2B GGY, the iGaming market in Brazil caught the attention of over 100 operators who recently applied for a B2C license. Some of these companies already operated in Brazil before the regulation and have acquired different player bases of different sizes. Some, however, are going to launch fresh. All are looking to gain a significant share of this huge market. Not all will succeed. The right marketing approach and partner will be of paramount importance.
What are the new changes in the regulations? What will happen to the non-licensed operators, what will be the future of PIX usage in iGaming, and many other key questions will get their answers in the paragraphs to follow.
Table of Contents:
Changes to the Regulatory Framework and Key Approaches
Brazil’s iGaming industry has seen several critical updates in terms of both advancements and complications in the market’s regulation since our last Market Report in May 2024. The country is currently in a transition period and moving closer to formalizing the regulatory framework for its gambling sector. When the full regulation comes into force by January 2025, there will be significant changes affecting both online and land-based operators.
To effectively capture the Brazilian market, operators must tailor their offerings to suit local player preferences. This includes providing customer support in Portuguese, integrating local payment systems like Boleto Bancário, and featuring sports that resonate with Brazilians, such as football, MMA, and basketball. Crafting promotions and content that align with Brazilian cultural values is critical for fostering player loyalty.
With over 78% of Brazilians using smartphones to access the internet, ensuring that platforms are optimized for mobile use is essential. A seamless mobile experience is crucial for attracting the country’s young, tech-savvy audience.
- Marketing and Sponsorships
Partnering with well-known sports teams and public figures has proven to be an effective strategy in Brazil. For example, major football teams like Corinthians and Palmeiras have inked deals with sportsbooks, enhancing brand visibility. Additionally, operators should leverage social media to engage the audience and promote their offerings effectively.
- Offering a Variety of Betting Options
Football remains the top sport for betting in Brazil, followed by basketball and esports. To attract a wider audience, operators should offer a diverse range of betting options, including international sports leagues and esports, to cater to various interests among Brazilian bettors.
Adopting strong responsible gaming practices is vital for maintaining compliance and gaining player trust. Operators should provide tools such as self-exclusion features and betting limits, while also ensuring proper identity verification and age restriction protocols are in place.
By concentrating on these areas—localization, mobile optimization, marketing, diverse betting options, and responsible gaming—operators will be well-positioned to gain substantial market share in Brazil’s burgeoning iGaming industry.
Regulation Status
From June to October 2024, Brazil has continued refining the licensing rules for operators. Following the establishment of the regulatory body earlier this year – the Secretariat of Prizes and Bets (SPA) – the government enforced a deadline in September 2024 for operators to apply for federal betting licenses. The goal was to ensure that all operators wishing to operate during the transition period (October – December 2024) would be in compliance with the legal framework before the market fully opens in January 2025.
In September, the Brazilian government published a Normative Ordinance No 1,475, prohibiting operators already active in the market that had not applied for a betting license from operating. This will be enforced between October 1st and December 31st.
One of the more controversial issues surrounding Brazil’s iGaming regulatory framework has been taxation. Initially, Brazil proposed an 18% tax on GGR for operators, which, after negotiations, was reduced to 12%. However total taxation can increase to over 30% when additional taxes get applied (such as PIS, Gaming Monitoring Fee, COFINS and ISS).
Approved Operators and the Transition Period in Brazil
By October 1st, the SPA issued a list of 89 approved operators, which it later updated, allowing 93 companies and 205 brands to continue functioning legally in the country. This approval process is considered critical for maintaining order in the market and ensuring that only authorized operators engage with the public. [source]
Some companies, however, remain excluded from the list, which has sparked a controversy in the iGaming business.
Players who are using non-approved platforms are given a grace period to withdraw all their funds before those platforms’ potential suspension. [source]
Judicial Rulings on Loterj Licensing in Brazil
In a pivotal ruling, Brazil’s Federal Regional Court decided that brands licensed by the Rio De Janeiro State Lottery (Loterj) would not be allowed to operate outside of Rio De Janeiro.
The ruling aligns with Brazil’s federal push to strengthen its control over the iGaming business in the country. However, Loterj maintains its position that its licensees should be allowed to operate outside the state’s borders, citing their belief in broader operational rights.
This legal debate adds a spark of complexity to the overall regulatory landscape, as it positions state autonomy against federal oversight. [source]
Market Reactions and Future Challenges
Looking back at the past years of uncertainty surrounding the legal framework, Brazil’s iGaming industry has been eager for progress. While the new regulations bring optimism for the market’s future, there are also concerns about certain provisions. The industry is closely monitoring developments related to taxation. As mentioned, initially the taxes were proposed at 18% but later lowered to 12%, and still, this is aside from all other additional taxes that compile to a significant amount. [source]
The regulatory challenges that remain to be tackled include the exclusion of key operators and debates over state versus federal licensing.
With the full legal market set to launch in January 2025, the next few months will be critical as operators finalize their applications and Brazil’s government continues to address gaps in the regulatory process. [source]
The Brazilian Institute of Responsible Gambling (IBJR) has called on the government to reconsider its proposed ban on the use of the Pix payment system for betting transactions, citing the need for better regulatory clarity. [source]
The SIGAP
Also known as the “Betting Management System”, a technological solution linked to the Ministry of Finance, developed with the objective of enabling the regulation, monitoring and inspection of the betting market in Brazil, based on the provisions of Law No. 13,756/2018 and Law No. 14,790/2023. Sigap works by receiving information about bets made on sporting events and bets made on online games.
Through API, companies must transmit files containing information on bets, operators and bettors on a daily basis, including financial transactions linked to sporting events and information on bets and bettors of online betting games. Each file will be detailed and sent according to the frequency determined in the data model defined by the Ministry of Finance.
Delasport has already developed and is currently testing its connection to the SIGAP, allowing it to be among the first ones to operate in Brazil.
Certifications
Delasport has a long-standing testing partnership with GLI – Gaming Laboratories International, the leading certification laboratory of the gambling industry. On top of being GLI-19 and GLI-33 certified, Delasport’s entire turnkey platform solution (player account management system + sportsbook + casino aggregator + payment providers) is currently undergoing testing against Brazilian-specific technical requirements, with the aim of being the first platforms to be fully certified for Brazil before the opening of the market.
In conclusion
Amidst all the regulatory changes and implementation, Brazil is currently one of the most complex, but also prominent iGaming markets. This is why an experienced and knowledgeable partner like Delasport is essential when looking to expand to such key jurisdictions.
At Delasport we’re not only ready with the required certifications but are keeping a close eye on every regulatory development in the country.
As the government works through the remaining hurdles – particularly in resolving disputes over licensing and taxation – the market will continue to evolve, attracting both domestic and international attention. If you’re serious about your iGaming business, you should reach out to Delasport right away, so that you face Jan 1, 2025, fully prepared.