Brazil Unveils New Regulations Ahead of Gambling Industry Launch

Brazil’s Ministry of Finance has unveiled updated regulations ahead of the anticipated launch of the country’s sports betting market. The new ordinance, issued by the Betting and Prizes Secretariat and published in the Federal Official Gazette, introduces vital provisions ensuring the integrity and security of the industry amidst new industry trends and rising global challenges.

Data Requirements Reflect a Commitment to Transparency

Normative Ordinance No. 722, published last week, provides a much-needed regulatory update following April’s announcement of a four-part regulation rollout covering several more specialized industry sectors. The ordinance outlines rules about betting systems, including technology and security requirements. Notably, it clarifies special situations where data centers may exist outside Brazil.

While data centers must generally remain within Brazil, specific conditions may allow data to exist abroad. These conditions include countries having an International Legal Cooperation Agreement with Brazil on civil and criminal matters. Additionally, data holders abroad must authorize the data transfer in advance, and the Ministry of Finance must have secure and unrestricted access to the data.

Operators complying with Normative Ordinance No. 722 can maintain their platforms abroad but must defend their decision before the SPA. Any data center must also hold ISO 27001 certification, and licensed operators must exclusively use “bet.br” domains. This practice will ensure that the authorities can intervene in case of significant violations and take the necessary measures to protect consumers. 

Consumer Protection Remains a Primary Consideration

Another notable provision requires operators to ensure compliance with the General Data Protection Law (LGPD), implementing security measures and obtaining explicit user consent for data collection. Users must also have the right to review and delete their data, aligning with pro-consumer policies similar to ones common in leading European jurisdictions.

This regulatory update aligns with Brazil’s ongoing efforts to create a robust regulatory foundation before the official launch of its gambling market. The next regulatory update should focus on anti-money-laundering and terrorist financing prevention practices and contain information regarding live dealer licensing conditions, underscoring the Brazilian government’s commitment to regulating all aspects of the industry.

Establishing technical requirements for operators is necessary for ushering in a transparent and sustainable gambling sector where operators are strictly accountable for their actions. Handling user data remains a sensitive issue in many jurisdictions, and Brazil’s approach indicates the government’s awareness of rising challenges, boding well for the upcoming gambling industry launch.