INSIGHT
LATIN AMERICA FOCUS BRAZIL
As for the state level, there are different types of online gambling licensing regimes. In Rio de Janeiro and Parana there is a public tender, in Minas Gerais and Paraiba – monopoly. In any way, new federal law specifically outlines that applicants can receive only one and single concession agreement (licence) to operate in Brazil, making it impossible to receive multiple licences across different states. Tough, the new federal licensing regime for online gambling and land-based sports betting does not oblige locally licensed operators to change their license.
INSIGHTS – THOUGHTS
Brazil undoubtedly holds significant potential for developing a regulated gambling market. Historically, it has been one of the most lucrative grey markets for iGaming operators, with an estimated 20 million Brazilians actively participating in online gambling.
Comparatively, other Latin American countries are
(SPA), applications licences will be reviewed after August 20, 2024. SPA expects to issue the first licenses by the end of 2024.
According to federal regulations, online gambling licences will allow to operate online betting and/or online casino for five years and under maximum of three brands (trademarks) per licence. Te general price for licence obtaining is an upfront fee of ~ US$5,6m.
Only a Brazilian entity is able to apply for license issuance, and it is also subject to the mandatory participation of a Brazilian as a partner who holds at least 20 per cent of such entity's share capital (which can be met both by Brazilian natural person and Brazilian entity). Te same for land-based sports betting license.
Finally, the tax burden - overall effective tax rate for licensees is anticipated to be in the range of 23-26 per cent of gross gaming revenue (GGR). It includes 12 per cent GGR of gambling tax, 9,25 per cent GGR of federal PIS (Programme of Social Integration) and COFINS (Contribution for the Financing of Social Security) taxes, and local services tax ranging from two to five per cent according to the municipality. Tere is also a monthly regulatory fee ranging from ~ US$10,100 to US$355,000 according to entity’s adjusted revenue.
progressing at varying rates in adopting and updating their regulations. Argentina, Bolivia, and Nicaragua are actively expanding their existing frameworks, while Mexico has established a
robust regulatory framework for rapid iGaming growth. These countries offer
valuable case studies that could inform and facilitate customized, region-specific market entry strategies for Brazil.
Recent legislative changes aimed at regulating the online gaming industry mark a positive development for the market. Tese changes were driven by several factors: the growing popularity of iGaming and other games of chance in Brazil, the substantial tax revenue losses due to unregulated gaming, the need to ensure player safety by reducing fraud and money laundering risks, and the desire to attract investors and major iGaming brands.
Te outlook is promising. Beyond legalising online gambling, Brazil has adopted a European approach to gambling regulation, emphasising responsible gaming through various measures such as internal control mechanisms for operators, bad actor clauses, and cooperation with international agencies. For example, the state of Paraná and its state lottery, Lottopar, are notably undervalued by stakeholders. Lottopar is uniquely affiliated with three of the world's largest organisations dedicated to preventing the manipulation of responsible games and sports (CIBELAE, WLA, and ULIS).
Despite these advancements, the market faces significant challenges. Te complexity of regulation and ambiguity between federal and state laws hinder the attraction of many compliant operators. Additionally, the traditional apprehension towards land-based casinos further complicates market popularisation.
ABOUT 4H AGENCY
4H Agency is a global gambling advisory. We provide expert guidance to B2C operators and B2B providers, spanning market insights, payments, product localisation, regulations, licensing, public affairs, and more.
Comparatively, other Latin American countries are progressing at varying rates in adopting and updating their regulations. Argentina, Bolivia, and Nicaragua are actively expanding their existing frameworks, while Mexico has established a robust regulatory framework for rapid iGaming growth. Tese countries offer valuable case studies that could inform and facilitate customised, region-specific market entry strategies for Brazil.
WIRE / PULSE / INSIGHT / REPORTS P109
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