Regulation changes the "game" in Brazil - Q&A

January 10, 2024

All eyes have been on Brazil in recent weeks. As crucial legislation is finally passed, paving the way for legalized online gaming in the country for the first time, Mitek’s Peter Murray, Director of Strategy: Betting and Gaming, talks us through the implications of recent events, and what operators should now be doing to prepare for market launch.


Brazil gamblingCan you give us a bit of context around the news coming out of Brazil?

P. Murray: As the readers of this article will no doubt be aware, the people of Brazil do more online gambling than any other single country by a considerable margin: 21% of all online gambling traffic, globally, comes from Brazil. For comparison, the second largest market, Mexico, accounts for just 11%. That’s an even more astounding statistic when you consider that Brazil has a long history of strict regulations against most forms of gambling.

To put a figure on it, an estimated $1.5 billion is currently generated annually by Brazilian online gamblers using foreign-operated gambling sites. Unsurprisingly, the Brazilian government is keen to capture these returns and bring them into the economy.

Brazil has been on the brink of regulation multiple times in the past, but it’s always failed up until now. Last year saw Bill 3626/23 brought before the legislature. There’s been a lot of wrangling to get it to where we are now, but the government was desperate to get this legislation passed in full by the end of 2023. Not least because they are banking on the expected R$2 billion (about $400 million) raised by this measure for their 2024 budget. In the last few days of 2023, we saw legislation finally approved by Brazil’s President that will allow the granting of casino, igaming and sports gambling licenses for the first time in the country’s history.

What should operators be doing now to prepare for market entry?

P. Murray: There is clearly huge revenue-raising potential here and we know operators are keen to move fast, which is good as the proposed timeline is tight. This is what we expect to see over the coming weeks:

  • End of January – Brazil’s Ministry of Finance publish regulatory guidelines for operators

  • February – Applications open for operator licenses

  • 15th July 2024 – New regulations come into force


While much is still yet to be finalised, we know some key details regarding eligibility criteria and the application process. The following regulations have been ratified by President Luiz Inácio Lula da Silva:

  • Licensees will be required to pay an initial fee of R$30m (approximately U$6.3m).
  • Operators will be granted the right to operate up to three different brands.
  • GGR (gross gaming revenue) will be limited to 12%.
  • Bettors will be taxed once a year, at a rate of 15% on net winnings.
  • Operators must offer customers self-exclusion windows that range from 24 hours to six weeks. They must also have a Brazilian board member who will hold at least 20% of the company’s shares.
  • Operators must verify the identities of bettors – all of whom must be over 18 years of age.
  • Facial recognition technology will be required to authenticate the identity of players.

It’s worth remembering, however, that one study found that 86% of Brazilian sports fans already use online betting services. Introducing a federal gambling regulatory framework to a market that already generates billions of dollars, and many strong opinions, won’t be a walk in the park. Things could still change.

What do we know about likely KYC requirements?

P. Murray: The Brazilian economy is set to receive a massive boost from this legislation. But the government has said it will work carefully to strike a balance between maximizing the potential economic benefits, and ensuring players are protected.

The government has, therefore, promised stringent rules on fraud prevention and anti-money laundering measures. As in all jurisdictions, a crucial element in getting this right will be KYC.

What we know is that operators licensed to work under Brazil’s new regulatory system will be mandated to undertake:  

  • Identity document verification (Driving licence / National ID / Workers License)

  • Checks against the CPF database (Brazilian taxpayer registry)

  • Biometric authentication

There may be further obligations, including source of funds verification, added further down the line.


Learn more about gambling & identity solutions


What else is going on in new and emerging markets in the region?


New gambling regulations in Peru come into effect on February 9th, 2024. Law 31557 and associated technical regulations require all platforms to execute the verification and validation of player identities. Key points are:

  • Once the law comes into force in February, anonymous betting will no longer be permitted on any platform
  • Companies will be required to register all players and verify their identity.
  • Persons under the age of 18 cannot register
  • Citizens with gambling addiction cannot register
  • Foreign citizens who live in Peru and have an ID issued by the Peruvian government can register
  • Foreign citizens can register using their passports
  • Platforms must use programs and apps that provide support for verifying the identity of registered players

The law and technical regulations do not mention any obligation to use the government’s official agency (RENIEC) to verify the identity of Peruvian citizens. Under these terms and conditions, software solutions and private applications that support player identity verification will be considered acceptable. So here at Mitek our existing services are good to go.


Chile - keen not to miss out on the party – is also edging closer to online gambling regulation. In December 2023, the country’s chamber of deputies passed a bill that will regulate online gaming in Chile, officially approving it to be sent to a vote in the country's senate. Under the new legislation, operators would have to pay a general license fee of CLP64.2m ($74,189) to operate an individual online betting platform, and banks would have the power to block transactions made to illegal operators.

Bill 035/2022 is one to watch in 2024, with the industry highly anticipating the rubber stamp from Chile’s Senate early this year.



How can working with Mitek help you prepare for market entry?

P. Murray: Mitek supports gambling and igaming operators globally to meet their KYC and AML obligations, protect them from fraud and seamlessly onboard customers across multiple jurisdictions.

With our Mitek Identity Verification (MiVIP) solution, you will have the flexibility to combine multiple identity verification methods, including proof of identity, proof of address and CPF integration, to meet any risk profile and regulatory requirement.

With MiPass, our sophisticated biometric solution, you can enable your customers to enroll their face and voice biometrics and enjoy the convenience and security of passive, passwordless account access.


Contact the Mitek Gaming team here