Is Online Gambling Legal in Brazil?

online gambling legal in brazil

Is Online Gambling Legal in Brazil?

The Chamber of Deputies has approved a bill that will establish licensing regulations for online gambling in Brazil. It builds upon a provisional measure published in July that requires operators to secure federal licenses and pay 18% of revenue in taxes for social welfare benefits.

It also prohibits betting vouchers, which can be used for fraud and money laundering activities, thus taking an important step toward regulating Brazil’s iGaming market, which boasts one of the world’s largest economies.

Legality

There remain numerous obstacles preventing Brazil from creating a fully regulated online gambling market, but recent progress towards that goal has been encouraging. One such step was the formation of ABRADIE (Asociaco Brasileira de Defesa da Integridade do Esporte). This organization includes sports and gambling legislation experts working towards protecting player security with regard to licensing structures in Brazil.

Brazil is an exciting market for online gambling despite lacking a fully regulated environment and licensing structure, estimated to account for more than 20% of global online gambling traffic and offering casino games and sports betting options. Operators seeking licenses in Brazil need to meet various requirements, including identity verification. IDnow’s geo-specific and AML compliant solutions offer them a unique way of meeting those requirements quickly.

Regulation

The Brazilian government recently proposed new regulations to help regulate online gambling. Under Brazil’s Criminal Code, any form of betting with operators not licensed within Brazil would be illegal; however, this proposal has generated controversy due to how taxes will be assessed against operators’ profits.

As part of their regulations, new taxes will also include provisions designed to combat fraud and limit illegal betting. Specifically, the Chamber of Deputies approved a bill which taxes sports betting companies as well as their profits and winning prizes before heading into Senate review for consideration.

The new legislation for iGaming industry is an encouraging sign, and should help mitigate risk and fraud within the country. However, to ensure its effectiveness it must not impose undue burden upon gaming operators, otherwise they could move offshore to escape prosecution risks.

Payment options

Brazilian gambling landscape has undergone dramatic change, as legislative efforts to regulate fixed-odds sports betting reached a major milestone. But their journey remains far from over; Congress still must regulate iGaming properly while President Jair Messias Bolsonaro may veto this bill and cause further delay.

Despite these constraints, Brazil continues to experience rapid expansion of online casino sites and an array of payment methods; credit cards remain most widely preferred with Visa and MasterCard topping the charts; debit cards and boleto bancario payments also play a big part.

Another popular iGaming transaction solution is PIX, an instant payment system specializing in iGaming transactions. Accepted by over 80% of Brazilian casinos, PIX provides a safe, secure, and convenient method of gambling online compared with traditional vouchers which must be purchased offline; unlike these digital options, however, which cannot be used immediately upon purchasing; although PIX cannot guarantee anonymity due to processing times; players have reported problems using it as well.

Taxes

Brazil’s lower chamber of parliament recently approved a bill which could lead to legal online gambling regulations in their nation. The Provisional Measure (PM) includes a high tax burden of 18% on operators’ gross gaming revenue while setting taxation rules for bettors and barring specific groups such as regulators, underage players and sports participants from placing bets.

The PM also contains payment rules designed to protect players from offshore gambling sites. Players must use payment methods with Brazilian bank clearing partner as clearing partner and their headquarters/administration located within Brazil; in addition, senior leadership of gambling operators cannot engage in betting activity.

The next step in Brazil’s legislative process will be for the Federal Senate to pass the bill and legalise online gaming and sports betting in Brazil – providing global operators with an invaluable opportunity while potentially stimulating Brazil’s economy.


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