Brazil’s emergence as a regulated iGaming market marks a watershed moment in Latin American gambling history. The implementation of Law No. 14,790/2023 and SPA/MF Ordinance No. 827/2024 on January 1, 2025, has set the stage for one of the region’s most comprehensive regulatory frameworks, a pivotal development that offers immense opportunities for operators while setting incredibly high standards for compliance and seamless player experiences. 

All eyes are on Brazil as it models the implementation and structure of a locally controlled licensing system. Moving forward, Brazil’s approach to regulation will most likely set a precedent for other developing markets that are striving to harmonize economic benefits with domestic regulatory control. For operators, mastering the flexibility to adapt and cater their platforms to the burgeoning and diverse markets presents an enormous opportunity – those equipped with advanced compliance and fraud prevention tools that support adherence to diverse regulatory environments are poised to excel and gain a competitive edge.

A New Era of Opportunity

Brazil’s transition from prohibition to regulation signifies a shift toward market liberalization coupled with stringent consumer protection measures. Overseen by the Secretariat of Prizes and Bets (SPA/MF), the country’s framework is explicitly designed to foster a robust market environment that balances growth with strict regulatory oversight.

Projections suggest the market could reach $3.63 billion by 2028, elevating the stakes for gameplay. The SPA/MF began the year by awarding 14 full licenses and 50 provisional licenses to major players, including the likes of Bet365 and Betsson, highlighting the market’s vast potential. However, the path to success involves navigating complex regulatory waters, including local presence mandates, hefty licensing fees, and rigorous player due diligence protocols.
With over 52 million Brazilians already engaged in online betting, operators face immense opportunities and significant obstacles. The regulatory requirements are rigorous, including anti-money laundering (AML) measures, responsible gaming protocols and substantial ongoing investment — approximately $5.2 million for a 5-year term licensing fee — reiterating Brazil’s commitment to creating and sustaining a secure market environment.

Detailed Breakdown of Brazil’s Legislation

The Secretariat of Prizes and Bets (SPA/MF) has crafted a framework that demands sophisticated technological solutions for compliance and fraud prevention. Operators must navigate a maze of requirements from complex identity verification requirements to strict payment processing rules, while maintaining efficient operations. Understanding and addressing each challenge is paramount for successful market entry and expansion. Key regulatory requirements include the following:

• Licensing and Financial Barriers
  License applications require operators to furnish extensive documentation, including background checks on owners and critical personnel, detailed business plans and operational specifics. Corporate bylaws mandate that betting operations must be explicitly stated as the primary business purpose. 
  
  Operating in Brazil has substantial financial obligations, starting with a licensing fee of approximately $5.2 million for five years. Next, a 12% revenue tax is applied on gross gaming revenues, as well as additional federal and state taxes, resulting in total effective tax rates of around 36%. These financial requirements require operators to demonstrate stable financial health by providing audited financial statements, proof of operational funding (minimum emergency reserve fund threshold is $1 million) and bank references.
  
• Operational Integrity
  Operators must secure licenses within a 90-day window to enter the market. Licensees are subject to system audits and gaming compliance audits after the initial year of operation and subsequently based on each operator’s risk profile. Monthly inspection fees are expected to range from around $10,300 to $361,000, depending on the operator’s adjusted monthly revenues. Additionally, operators must adhere to a range of integrity, responsibility and honesty requirements overseen by the ABRADIE and IBJR.
  
• Local Presence and Ownership Requirements
  Operators must establish a subsidiary within Brazil, with at least 20% of ownership held by a local shareholder. This requirement ensures significant local engagement and investment in the Brazilian market, banning foreign operators from offering services. Further, all authorized operators must use a bet.br domain to distinguish themselves from unauthorized platforms. Companies that operate without a license face having their websites blocked and hefty fines.
  
• Consumer Protection & Responsible Gambling Measures
  Operators are required to adopt stringent, responsible gambling policies and implement player protection strategies. These include responsible gaming tools such as a mandatory nationwide self-exclusion registry seamlessly integrated with operating systems and the verification of Bolsa Familia participation to protect social welfare recipients. Key to these measures is using facial recognition technology during player registration to prevent minors from participating in betting activities. Furthermore, operators must conduct comprehensive PEP and sanctions screenings to maintain compliance and integrity.
  
  Advertising practices are strictly regulated, with severe restrictions designed to prevent targeting minors and other vulnerable groups or promoting excessive gambling. This includes prohibitions on influencers promoting gambling in a manner that suggests personal success. These protocols are diligently regulated and monitored to uphold the highest standards of player safety and ethical gambling practices, forging a responsible gaming environment.
  
• Payment Restrictions
  Players are subject to a 15% tax on all winnings, and credit cards are no longer considered valid forms of payment. Only debit cards or Pix cards belonging to the Brazilian instant payment ecosystem are accepted. Operators are also responsible for implementing customizable deposit ceilings and cooling-off periods.
  
• Security Standards
  Operators must adhere to stringent cybersecurity protocols to ensure the integrity and security of gaming operations — including establishing recovery and business continuity systems, which encompass comprehensive backups of all recorded information, security configurations and user accounts. Firewalls need to be strategically placed at critical junctures between security domains to scrutinize all data transfers, making certain only secure communications proceed. Regular penetration testing is mandatory to identify and address network and application layers vulnerabilities.

Access controls and encryption protocols are strictly enforced to secure all remote interactions with gaming platforms, preserving the confidentiality and integrity of data exchanges. Additionally, all betting systems and operator data centers must be situated within Brazilian territory, although exceptions exist for countries that have established International Legal Cooperation Agreements.

To further bolster security standards, online games and live game studios must obtain certification from recognized certifying bodies that ensure compliance with regulatory standards. Operators must also maintain secure data storage concerning bettors, employees and representatives, adhering to stringent data management requirements. Compliance with these requirements is mandatory within six months of obtaining a Brazilian gaming license.

Meeting Technological Benchmarks

The comprehensive regulatory framework establishes rigorous standards that form the backbone of a system designed to safeguard operator and player data against unauthorized access and cyber threats. These regulations necessitate advanced technological responses, particularly in identity verification (IDV) and anti-money laundering (AML) compliance. Ensuring robust IDV measures helps verify players’ authenticity and eligibility, while stringent AML protocols are crucial for monitoring and preventing financial crimes, thereby fostering a secure and trustworthy gaming environment.

Player IDV Standards

Brazil’s unique naming conventions and high fraud rates pose particular challenges for operators. Traditional KYC methods often struggle with Brazilian name matching, leading to false positives that can frustrate legitimate players or, worse, allow restricted individuals to slip through. The regulatory requirement for real-time identity verification adds another layer of complexity to an already challenging operation. Framework mandates rigorous IDV processes to ensure all players are legally eligible to participate in iGaming activities, including several layers of checks before a player can register and engage:

• Cadastro de Pessoas Database Checks
  Every operator must integrate their systems with Brazil’s Cadastro de Pessoas Físicas (CPF) database to verify the identity numbers provided by users. This check ensures that the information corresponds accurately with government records, which is crucial for minimizing fraud.
• Biometric Verification
  In addition to standard data checks, operators must implement biometric verification systems. This includes facial recognition technology to verify players’ identities at registration and periodically re-verify to maintain security standards.
• Document Analysis
  Operators must also perform detailed document analysis to validate the authenticity of identification documents provided by players. This includes checking for security features such as holograms and watermarks, essential in distinguishing genuine documents from forgeries.

AML Protocols

Designed to prevent the iGaming platforms from being exploited for money laundering or terrorist financing activities, in Brazil, compliance involves a multifaceted approach that includes:

• Transaction Monitoring
  Operators are required to implement systems that monitor and analyze player transactions in real time to detect and report suspicious activities, a crucial action that enables the quick identification of patterns that may indicate money laundering.
• Enhanced Due Diligence (EDD)
  Enhanced due diligence processes are compulsory for high-risk clients, including politically exposed persons (PEPs). Deep investigative checks into the backgrounds of flagged individuals can prevent abuse of the system for illicit gain.
• Reporting and Record-Keeping
  Operators must maintain detailed records of all transactions and player activities for at least five years. They must also report any suspicious activities to the Brazilian financial authorities to ensure transparency and compliance with national regulations.
• PEP and Sanctions Screening
  Continuous screening against national and international sanctions lists and PEP databases is required to ensure that individuals prohibited from engaging in gambling activities are effectively identified and blocked from using the platform.

Challenges and Adjustments Ahead

While short-term friction will exist, Brazil’s regulated framework positions it to become Latin America’s largest iGaming hub — and a top-five global market  — by 2030, provided regulators balance enforcement with market accessibility. The year ahead is expected to be one of interpretation and refinement, with potential tightening of regulations. It’s likely that those who excel at technological adaptation, including AI-driven compliance tools and localized payment solutions, will likely determine market leaders.

The SEON Approach for Brazil (and Elsewhere)

In response to Brazil’s approach, SEON has developed a sophisticated platform that addresses this market’s unique challenges. Combining advanced fraud prevention capabilities with flexible compliance features, the solution enables operators to navigate regulatory requirements efficiently while maintaining high-security standards.

Advanced Pre-KYC Screening

SEON’s proprietary digital footprint analysis, combined with the power of device intelligence, provides a crucial first line of defense. By analyzing digital signatures before initiating formal KYC processes, operators can:

• Reduce unnecessary KYC checks on high-risk profiles
• Streamline the onboarding process for legitimate users
• Identify potential fraud patterns early in the user journey

Enhanced Identity Verification

The platform’s e-KYC capabilities can be specifically tailored for the Brazilian market, featuring:

• CPF verification integration
• Government ID OCR processing
• Biometric validation
• Machine learning algorithms optimized for Brazilian name-matching

Comprehensive Compliance Screening

SEON’s platform unifies multiple compliance requirements into a single, streamlined system:

• PEP and sanctions screening with CPF identifier matching
• Automated SPA compliance checks for sports-related restrictions
• Bolsa Familia participation verification
• High-precision geolocation services to ensure adherence to regional regulations

Strategic Advantages for Operators

Beyond mere compliance, the platform provides strategic benefits that can profoundly impact an operator’s success in emerging markets, including:

– Operational efficiency and cost management through reduced false positives in identity matching, thanks to advanced machine learning algorithms trained on Brazilian naming conventions

– Streamlined compliance processes by unifying multiple requirements into one platform, which helps to reduce operational complexity, lower compliance costs, and accelerate player onboarding

– Future-proofed operations that allow for rapid adaptation to regulatory changes without significant technological overhauls

Future-Proofed Operations

The regulatory landscape in Brazil continues to evolve, with potential adjustments to advertising rules and responsible gaming requirements on the horizon. SEON’s adaptable platform architecture ensures operators can quickly respond to regulatory changes without significant technological overhaul.

As the market matures, the success of early market entrants will largely depend on their ability to maintain consistent compliance with evolving regulations, deliver frictionless user experiences despite strict requirements, adapt to changing payment landscapes and responsible gaming mandates and scale operations efficiently while managing costs

SEON’s platform provides the technological foundation necessary for operators to navigate these challenges successfully. By combining advanced fraud prevention with comprehensive compliance capabilities, operators can focus on market growth while maintaining the trust of both regulators and players.