Brazil and, by extension, Latin America have long been referred to as the online gambling industry’s “sleeping giant.” While gambling is popular in the region, and a financially sound population is looking to enjoy it, local regulations around licensing and limitations on getting money in and out of South America have hindered its development.

However, with the publication of Ordinance 827 in May, the government announced that it intends to allow online gambling licensees to operate in Brazil as of 2025.

What Does Ordinance 827 Entail?

The Brazilian Ministry of Finance and Secretariat of Prizes and Bets published Ordinance No. 827 in the Official Diary of the Union on 21 May 2024.

The intent of the ordinance is:

Quote

“… to systematically structure the regulatory agenda for fixed-odd betting in the country and represents a considerable advance in the management and supervision of this sector.”

This is a massive win for the online gambling industry, which has been petitioning South American markets for decades to open up their borders.

To offer fixed-odds betting in Brazil, operators must pay R$30,000,000 (€5 million) for a five-year license and be incorporated and headquartered in Brazil under Law No. 13,756 of 2018, in Law No. 14,790.

 The Sprint to the Finish Line

With legal gambling set to go live in 2025, it might sound like the local regulator has all the time in the world, but we are less than six months away from their deadlines.

Here is how they intend to roll out this new legislation in that period:

• Stage 1 (end of April 2024): In the initial phase, regulations will be issued detailing the technical, payment, and security standards that operators must adhere to. Additionally, guidelines for operators to apply for licenses to offer fixed-odds betting will be released in April.
• Stage 2 (end of May 2024): In the second stage, the SPA will release its anti-money laundering and anti-terrorist financing policies, along with regulations on preventing the proliferation of weapons of mass destruction and other forms of fraud. Additionally, rules ensuring operators protect bettors' rights and comply with legal provisions will be published.
• Stage 3 (end of June 2024): In the third stage, the SPA will announce the technical and security requirements for online gaming. This phase will also include the establishment of procedures for monitoring gambling advertising.
• Stage 4 (end of July 2024): In the final stage, procedures will be outlined for allocating industry contributions to socially responsible causes. This will ensure that funds are directed towards beneficial social initiatives.

According to industry experts, while the above is a fast-paced implementation plan, it is highly achievable as long as government departments refrain from using their ability to block or delay the process to gain leverage in local politics.

 What Role Does Esports Play?

In recent years public gambling preferences have shifted away from sports betting to games of chance like Online Slots, video poker, and live dealer games like Crazy Time and Monopoly Live.

However, according to Udo Seckelmann, an attorney at leading Latin American law firm Bichara e Motta Advogados, esports has slowly gained an audience in the country. He estimates that esports interest could outshine all other sports in Brazil, including football, within a decade.

Approximately 38% of the people who watch esports in the country also bet on the matches. In real terms, a Series A football match will garner up to 8 million views, while a Free Fire esports tournament, a particularly popular video game in Brazil, will gain more than 15 million views.

With the proper funding and national support, esports could become the golden goose that helps boost legal gambling in Brazil to the forefront of the global gaming industry.