As we covered last month, gambling regulation in Brazil is set for rollout this July. This news created waves across the iGaming industry, and the situation has developed further with news of a deadline for Brazil gaming licence applications.
In a recent update published by the Brazilian authorities, gambling operators in the country must apply for and secure a gaming licence by the end of the year. Failure to do so could see them face penalties from the start of 2025. Let’s take a look at this deadline in more detail and discuss what it means for Brazil gaming licence applications and operators.
Details of the Deadline
Last week, Brazilian authorities published Normative Ordinance 827. In this document, details for the prospective gambling and sports betting operators were set out, with information regarding the requirements for applying for and obtaining the correct gaming licences.
According to the document, operators in Brazil looking to apply for a gaming licence must do so before 31 December 2024. Furthermore, they must ensure that they are fully compliant with the rules and regulations set out in the new frameworks, or they could face penalties from as early as 1 January 2025.
Eligibility and Requirements
The LatAm region is one that gambling operators around the world have been watching closely. The news of a regulated Brazilian market was met with a great deal of excitement, and the publication of this deadline will have left operators scrambling to ensure they manage to secure a licence on time. However, further details, or lack thereof, regarding Brazil gaming licence applications mean it remains unclear how applications made by operators based outside of Brazil will work.
Authorities have stipulated that applicants must be headquartered in Brazil. International companies with a Brazilian subsidiary that owns at least 20% of the company will also be eligible to apply. Further information as to how exactly these arrangements will work has not been made public as of yet.
Requirements for Brazil gaming licence applications include full documentation that states that the company in question has the legal right to operate in Brazil. Applicants must also demonstrate compliance with payment regulations and secure certificates from Brazil’s National Treasury and Federal Revenue Office.
Additionally, applicants must hold certified betting systems, and any data centres hosted offshore must be located in countries that hold cooperative legal agreements with Brazil.
Application Costs
All applicants will be subject to a licence fee of $5.9m, which will grant a licence for five years. In addition to this fee, applicants must demonstrate that they hold cash reserves of at least $968,842.
Further, applicants must submit financial forecasts and cash flows that cover the next two years, with these plans signed off by finance directors to demonstrate how the company intends to grow in the market.
Once a licence has been granted, operators will be subject to a 12% gross revenue tax and a fee that covers monthly inspections.
Conclusion
The announcement of a deadline for Brazil gaming licence applications indicates another step forward towards full regulation in the country. However, operators must contend with a complex application process that, at this stage, still remains relatively unclear.
