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Regulator Publishes Ordinance Regulating Payment Transactions in Fixed-Odds Betting

Today, the Secretary of Awards and Betting of the Ministry of Finance (the “Regulator”) issued the Normative Ordinance SPA/MF No. 615 (“Ordinance”), which establishes the rules that will govern the conditions and obligations involving payment transactions in fixed-odds betting.

Firstly, the Ordinance mandates that all financial movements between bettors and betting operators—including deposits, withdrawals, and prize payments—must be conducted exclusively via electronic transfer between the registered accounts of the bettors and the transactional account of the betting operator, both maintained at financial or payment institutions authorized by the Central Bank of Brazil (“BCB”).

It is important to emphasize that intermediation activities in payment transactions between bettors and betting operators, conducted by institutions not authorized by the BCB, are also prohibited.

In light of this context, betting operators are prohibited from accepting financial deposits from bettors through various means, including, but not limited to:

  • cash;
  • payment slips;
  • checks;
  • crypto;
  • payments or transfers from accounts that have not been previously registered by the bettor;
  • payments or transfers from third parties;
  • credit cards or any other post-paid payment instruments.

According to the Ordinance, betting operators are also prohibited from offering advances, anticipations, bonuses, or prior advantages for making bets, as well as facilitating access to credit or commercial financing operations by bettors.

Another important aspect is the implementation of the asset segregation principle, which mandates that the assets, goods, and rights of the betting operators be kept separate from the bettors’ funds in the transactional accounts. Only after fulfilling the conditions established in the Ordinance may the operators transfer their net revenues to their own accounts. Consequently, it is prohibited for operators to maintain their own funds in these transactional accounts or to use the bettors’ funds, even temporarily, to cover prizes or other expenses.

In adherence to the asset segregation principle, the deposits made by bettors into the transactional accounts held by the operators are not liable, directly or indirectly, for any obligations of the operators, nor can they be targeted by judicial or extrajudicial actions due to the operators’ debts.

Despite the aforementioned provisions, the daily, total, or partial balance of the transactional accounts—including the amounts corresponding to open bets assessed at the closure of the regular operation grid of the Reserves Transfer System (STR) participants—may be invested in federal public bonds, as outlined in the second paragraph and its subsections of Article 5.

Furthermore, Article 6 of the Ordinance sets forth guidelines for the Bettors’ Graphical Interface Accounts, requiring the disclosure of the history of the past 36 (thirty-six) months of deposits and withdrawals, the values of bets placed, the prizes received, as well as the value of open bets and the available financial balance.

Regarding prize distribution, it is important to note that if the funds from open bets on sports events or online games are insufficient to cover the prizes, the betting operator must transfer the necessary amount from its own account to the transactional account to complete the payment. Prizes must be paid within 120 (one hundred twenty) minutes following the conclusion of the events.

Betting operators must also implement liquidity risk management mechanisms, which include, but are not limited to, methodologies for calculating exposure limits; assessing, monitoring, and mitigating liquidity risks across different periods; a contingency plan detailing sources of additional resources, responsibilities, and procedures for financial stress situations; and maintaining a financial reserve of at least BRL 5,000,000.00 (five million reais) to cover potential insolvencies, which must be replenished within 2 (two) business days.

The Ordinance also mandates that betting operators comply with tax rules applicable to the payment of prizes to bettors, as stipulated by the Brazilian Federal Revenue in a subsequent act.

Finally, financial and payment institutions will be prohibited from facilitating financial transactions for unlicensed operators after a period of 6 (six) months, counted from the date of publication of a specific regulation by the Regulator, which will establish the rules and conditions for obtaining the authorization to operate fixed-odds betting.

Our legal team at Bichara and Motta Advogados are attentively monitoring the regulation of the betting industry in Brazil, offering legal advice to multiple market participants. For further information, please visit: www.bicharaemotta.com.br.