Brazil shakes up iGaming, ushering in a new era of legal betting

Brazil has been one of the most lucrative grey markets for #iGaming operators for a long time; it's appetite for iGaming is insatiable, with an estimated 20 million Brazilians eagerly anteing up online.

Whether it the thrill of a Starburst win, the plinkety-plop of a plinko ball, or the satisfaction of that last-minute winning goal that brings home that acca been sweating the whole weekend, Brazilian bettors enjoy a diverse buffet of betting delights; you seamlessly blend the adrenaline of virtual spins with the strategic showdowns of digital tables.

The nation's legislators have picked up on this enthusiasm, and on December 21, 2023, they greenlit Bill 3,626/2023 to bring online gaming into the fold of regulation. Yet, with the ink barely dry, the air is thick with speculation, and the chatter in the industry is loud, buzzing with queries about potential amendments, operational standards for licensing, and what the playbook on #ResponsibleGaming will look like.

Either way, an excellent place to start understanding the impact this will have on operators is probably by reviewing what we already know.

The legal documentation is extensive but needs more detailed information regarding operators' adherence. However, there's no denying it points to some key values we doubt will be fleshed out over the coming weeks and months.

High-level items at this stage include a verification process to ensure all gamers are identified by their CPF at the point of registration and before gameplay. This creates a potential hurdle for those operators who allow users to log in using social sign-on without capturing as much as an email address and who only seek to verify at the point of withdrawal.

Further, article 35 tells us that operators must implement measures to prevent money laundering and terrorist financing, emphasizing security and structural integrity. This will likely require that some of the more reputable grey market operators refine their policies surrounding #KYC and, of course, efforts to analyze betting patterns and user groups, ensuring demonstrable AML efforts are in place. This is extra important should Brazilian regulators audit licensees going forward.

We also expect strict rules surrounding individuals forbidden from betting, such as those with considerable influence on operators, public employees, sportspeople, and more… all of which will have to be baked into the KYC process for many operators seeking to enter the market.

And let's not skim over fraud prevention, a puzzle piece that's sure to gain definition as legislative details unfold. It is, nevertheless, a piece that demands attention and will need to be part of the roadmap within companies looking to abide by the new Brazilian licensing requirements.

While the complete playbook remains under wraps, it is a safe bet that operators will face a gauntlet of stringent KYC checks, iron-fisted AML rules, and, per legal whispers, potentially hefty fines for those stepping out of line. It's a whole new game, and Brazil's not bluffing.

Join us in watching Brazil's iGaming saga unfold. Meet Sumsub at SiGMA World Americas Summit in S?o Paulo, on 23rd - 26th April at booth #F75 to learn more about our solution.