The groundwork for Brazil’s pending regulation of its federal sports betting regime has become clearer as government agency SECAP publishes a ‘draft proposal’ outlining its preferred regulatory outcomes. 

Back in 2019, SECAP – Brazil’s Secretariat of Evaluation, Planning, Energy and Lottery – was placed directly in charge of finalising the legislation of Brazil’s sports betting regime, a mandate that needed to be resolved for Brazil to reform its federal gambling laws.

The draft proposal, published by Games Brasil Magazine, sees SECAP recommend that the government apply a five-year licence priced for authorised operators at a fee of BRL 22.2 million (€4.2m).

SECAP has recommended that the government apply ‘no limited authorisations’ on the number of market licences, although applicant parties must have a business entity registered in Brazil.

The document states that government oversight with regards to market supervision. licensing and tax should be overseen by the Ministry of the Economy. It also recommends the placing of a dedicated agency to monitor the market’s policy development and conduct of participants.

Seeking to establish a deadline for legislation to be applied, the ministry’s dedicated agency will have 30 days to review the draft proposal and make necessary amendments to settle upon a working framework. The settlement will be followed by a 60-day review period for the Ministry of the Economy to complete its final assessment.

Operators that have established a presence within Brazil’s sportsbook market will be granted a six-month amnesty to comply with new laws ahead of licences being issued.

 Foreign applicants must establish a Brazil-based subsidiary, in which at least four executives must be registered as domiciled residents.  

The regulator will formalise licensing provisions to ensure that applicants have sufficient capital alongside the economic and financial capacity to operate their sportsbook activities.

As a mandatory duty, licensed operators must ensure that Brazilian customers disclose their CPF individual taxpayer registry details upon registration, with further ID requirements made for foreign players.

As yet, SECAP has not disclosed any information related to market tax charges. However, the agency maintains its previous guidance, recommending that the Ministry of Economy impose a tax on operator revenues over customer stakes.

The Ministry of the Economy is further required to establish a policy procedure and market controls aimed at preventing money laundering and terrorist financing and fraud prevention.

Should sportsbook proposals be finalised, SECAP recommends that a ‘sandbox phase’ be applied to the market, allowing applicant operators to test technical requirements.

Deemed as a preferable outcome, agencies have been recommended to settle on market legislations and regulatory requirements before the summer as Brazilian politics enters the campaign phase for the General Election on 2 October.