The Prizes and Bets Secretariat of the Ministry of Finance has released Ordinance SPA/MF No. 827, which defines the rules and conditions for obtaining authorization (license) for the exploration of sports betting and online games in Brazil.

We have prepared a summary of the main provisions of the ordinance:

Deadline for License Application

The license can be requested at any time.

Applicants who submit the license application within 90 days of the publication of the ordinance will be assured approval by December 31, provided that the requirements set forth in the Ordinance are met.

Adaptation Period for Active Operators

Operators already in activity have until December 31, 2024 to comply with the new rules.

Penalty Application

Starting January 1, 2025, legal entities operating without the proper license will be subject to penalties as provided by law.

Obligation of Brazilian Partnership

The Ordinance provides for the mandatory participation of a Brazilian as the holder of at least twenty percent of the capital, which can be fulfilled by the participation of either Brazilian individuals or Brazilian legal entities. Brazilian legal entity refers to a legal entity established under Brazilian laws with its headquarters and administration in the country.

Type of Legal Entity

Limited liability companies or joint-stock companies may be used as applicants.

Grant Amount and License Duration

The license will be valid for five years, upon payment of R$ 30 million, considering the limit of up to three trademarks to be exploited by the operator through electronic channels under the authorization act. The license will be personal, non-negotiable, and non-transferable.

Criteria for Obtaining the License

It is necessary to submit documents proving legal qualification, tax and labor regularity, integrity, economic-financial qualification, and technical qualification.

CNAE

The legal entity must register with the Commercial Registry with the main social purpose of 'Fixed Odds Betting,' using the National Classification of Economic Activities - CNAE 9200-3/99, subclass 'Operation of unspecified gambling and betting games.'

Share Capital and Financial Reserve

The full payment of the minimum share capital of R$ 30 million, minimum net worth of R$ 30 million, and the constitution of a financial reserve of R$ 5 million must be proven.

Additional Authorizations

If the legal entity wishes to operate more than three trademarks, the following will be additionally required: payment of the authorization grant in the amount of R$ 30 million, per approved authorization act; constitution of a R$ 5 million financial reserve, per approved authorization act; and payment in legal currency of the share capital of R$ 15 million and maintenance of net worth in an amount not less than the share capital, per approved authorization act.

Experience of Administrators

Evidence may be provided through documents confirming (i) for natural persons, having a minimum professional experience of three years in the areas of games, betting, or lotteries or related fields; or (ii) for natural or legal persons, being or having been a holder of qualified equity participation in legal entities with the social purpose of games, betting, or lotteries.

Service Structure for Bettors' Assistance

The Ordinance provides for the requirement of a description of the bettors' assistance system structure, based in Brazil, with assistance in Portuguese, operated through free electronic and telephone channels, operating 24 hours a day, seven days a week, capable of addressing complaints, doubts, and other issues related to bets.

List of Operation Licenses

It will be necessary to present a list of all operation and commercialization licenses for sports betting in other jurisdictions and states of the Federation, if any, in the name of the applying legal entity or its controllers, including overseas, containing identification number, concession date, validity period, and location.

Sports Integrity

It will be necessary to prove that the legal entity integrates or is associated with an independent organism or entity for monitoring sports integrity, national or foreign, with the objective of combating the manipulation of sports events results.

Feedback from the Prizes and Bets Secretariat

The Secretariat must notify the applicants within 150 days regarding the payment for the authorization grant or the rejection of the application.

For further details on the necessary documents and other requirements, we suggest scheduling a meeting with our team of specialists.

The above summary does not replace the full reading of the Ordinance, available at this link.

Author: Rafael Biasi
Date: May 22, 2024
Revision: Rubio Teixeira