iGaming News #011 | Sanctions for unauthorized iGaming operations: understanding Ordinance No. 1.233

Hi! this is Camila Valeriano, Compliance and AML Specialist at WEpayments.

Today, we'll delve into another Brazilian iGaming ordinance, Ordinance SPA/MF No. 1.233 of July 31, 2024. This regulation outlines the sanctioning regime for commercial fixed-odds betting operations, defining the infractions, procedures, and penalties for unauthorized iGaming operations as per the Secretariat of Prizes and Bets (SPA).

Let's explore this ordinance in more detail.

?? What are the prohibited activities according to the law?

The law states that "any illegal activity related to the operation of fixed-odds betting is considered a prohibited activity."

Specifically, the infractions include:

1. Operating fixed-odds betting without prior authorization from the Secretariat of Prizes and Bets of the Ministry of Finance;
2. Engaging in operations or activities that are prohibited, unauthorized, or in violation of granted authorization;
3. Obstructing the inspections of the Secretariat of Prizes and Bets of the Ministry of Finance;
4. Failing to provide the Secretariat of Prizes and Bets of the Ministry of Finance with documents, data, or information required by legal or regulatory norms;
5. Providing the Secretariat of Prizes and Bets of the Ministry of Finance with incorrect documents, data, or information, or failing to comply with the deadlines and conditions established in legal or regulatory norms;
6. Advertising or promoting commercial operations of fixed-odds betting operators not authorized by the Ministry of Finance;
7. Engaging in, encouraging, permitting, or in any way contributing to practices that undermine sports integrity, the uncertainty of sports results, the transparency of the rules applicable to sporting events, the equality among competitors, or any other form of fraud or undue interference that could affect the fairness or soundness of conduct associated with the proper performance of sporting activities; and
8. Failing to comply with legal and regulatory norms whose compliance falls under the oversight of the Ministry of Finance.

?? How does the sanctioning administrative process work?

Chapter III of the Ordinance outlines the rules for the administrative sanctioning process, which is the procedure used by the public administration to investigate and punish individual infractions.

Key points of this process include:

• Process organization: Defines the process stages, from initiation to final decision, indicating the sub-secretariats responsible for each phase.
• Rights of the interested parties: Guarantees the right to defense and access to the case files for those involved, provided that legal formalities are respected.
• Deadlines: Establishes deadlines for each procedural act and provides for the possibility of extensions in exceptional cases.
• Notifications and summons: Defines the methods of notification and summons for interested parties, prioritizing electronic means.
• Evidence: Regulates the production of evidence in the administrative process, establishing admissibility criteria and the value to be attributed to each type of evidence.
• Decision: Stipulates that the final decision must be reasoned and indicate the legal grounds used.
• Appeals: Allows for appeals against decisions, establishing deadlines and conditions for their filing.
• Suspensive effect: This provision allows the possibility of granting a suspensive effect to the appeal, postponing the decision's execution while the appeal is being analyzed.

?? What are the prescribed penalties?

The Ordinance also establishes penalties for infractions related to fixed-odds betting. Key points about the penalties include:

• Types of penalties: The law provides for various penalties, such as warnings, fines (with amounts varying according to the severity of the infraction and the economic capacity of the offender), suspension of activities, revocation of authorizations, prohibitions from participating in bids, and prohibitions from holding positions in companies in the sector.
• Criteria for applying penalties: The severity of the infraction, the offender's prior record, the profit obtained, and the economic capacity are some factors considered in determining the penalties.
• Aggravating and mitigating circumstances: The law provides for circumstances that can exacerbate or mitigate the penalty, such as recidivism, fraud, and spontaneous acknowledgment of the infraction.
• Interim measures: Before the final decision of the administrative process, interim measures, such as the suspension of prize payments or the prohibition of certain activities, can be applied to ensure the effectiveness of future punishment.
• Penalty for non-compliance: Non-compliance with interim measures can result in a penalty.

To read more about the Ordinance, click here.

Regulatory agenda

Phase I

? Certification Laboratory Accreditation

? Payment Methods

? Betting Systems

? Authorization Ordinance for Fixed-Odds Betting

Phase II

? Money Laundering and Other Offenses

?? Rights and Obligations - incorporated into the Responsible Gaming Ordinance

Phase III

? Online Gambling

? Supervision

? Sanctioning Actions

Phase IV - delayed

? Responsible Gaming

? Social Destinations

Get to know WEpayments

We are a boutique payment solution provider specializing in tailored solutions for the betting sector. At WEpayments, we not only take care of your payment needs but also ensure that your operations are high-performing and compliant with all regulatory requirements. Our dedicated team is here to provide the necessary support to help your business thrive safely and structured. ???

Our team is ready to support you every step of the way. ??

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In the following news, we’ll explore more Ordinances from the new Brazilian iGaming regulations. Stay connected with us!

Best regards and see you next time,