Brazil Bans Credit Cards and Crypto in New Igaming Regulations

Brazil Imposes Strict Payment Regulations on Igaming and Sports Betting

A Revolutionary Shift in Betting Payments—Brazil’s igaming and sports betting sectors are set to undergo significant changes with the implementation of stringent new payment regulations. As detailed in Normative Ordinance No 615, published in the Official Diary of the Union on April 18, 2024, these regulations mark a pivotal shift towards more regulated and secure betting operations, prohibiting the use of credit cards, cryptocurrencies, and other traditional payment methods in gambling transactions.

Overview of the New Payment Regulations

The Regulatory Policy of the Prizes and Betting Secretariat (SPA), backed by Brazil’s Ministry of Finance, has outlined comprehensive payment rules that are poised to transform the Brazilian betting landscape. This initiative is part of a broader regulatory rollout, encapsulated in the four-stage implementation of Bill 3,626 (Law 14,790), ratified by President Luiz Inacio Lula da Silva in December 2023. The primary aim is to enhance the security and integrity of online gaming and sports betting by tightly controlling the payment mechanisms used.

Specific Prohibitions and Requirements

Under the new rules, operators are no longer permitted to accept payments via:

Credit cards
Cryptocurrencies
Cash
Payment slips
Cheques

This drastic move seeks to clamp down on money laundering and other fraudulent activities often associated with anonymous or less traceable payment methods. Instead, all transactions, including bets, withdrawals, and payouts, must be conducted through electronic transfers directly between the accounts of operators and bettors, which must be authorized by the Central Bank of Brazil.

Implications for Operators and Bettors

Operators must ensure that payments are only accepted from accounts registered in the bettor’s name, prohibiting third-party transfers and acting as intermediaries, unless conducted through institutions authorized by the Central Bank. This regulation is intended to increase transparency and traceability of funds, reducing the risk of fraud and enhancing consumer protection.

Enhancing Consumer Protection

Further to financial safeguards, the new regulations mandate operators to provide bettors with virtual accounts detailing their betting history, open bets, and financial balances for the past 36 months. This measure is designed to promote responsible gambling by enabling bettors to monitor and manage their betting activities more effectively. Operators are also prohibited from offering any remuneration on accounts owned by players, which serves to discourage reckless betting behavior.

Financial Resilience Measures

Operators are now required to manage liquidity risks by establishing a financial reserve of at least R$5 million, held at a financial institution authorized by the Central Bank of Brazil in federal public bonds. This reserve, which must be kept separate from other proprietary accounts, provides a financial buffer to ensure that operators can cover winnings and other operational liabilities.

The Road Ahead: Brazil’s Regulatory Timeline

As Brazil advances its regulatory framework, the next steps include the SPA’s publication of anti-money laundering policies and counter-terrorist financing rules. These measures will be followed by regulations concerning the monitoring of gambling advertisements and the technical and security standards for igaming platforms. The comprehensive regulatory overhaul is expected to conclude by the end of July with the publication of guidelines on allocating industry contributions to socially responsible causes.

Conclusion: Setting a New Standard in Gambling Regulation

Brazil’s stringent new payment rules for the igaming and sports betting industry set a precedent for regulatory rigor and consumer protection. By banning high-risk payment methods like credit cards and cryptocurrencies, Brazil aims to curtail gambling-related financial risks and foster a safer, more accountable betting environment. As the regulatory landscape continues to evolve, stakeholders in the Brazilian gambling market must stay informed and adaptable to navigate these significant changes effectively.

Stay Informed and Engaged

For industry professionals, bettors, and regulators, understanding and adapting to these changes is crucial for compliance and continued participation in Brazil’s burgeoning igaming and sports betting markets. Keeping abreast of regulatory developments will be key to successfully navigating the new landscape of Brazilian gambling.

The post Brazil Bans Credit Cards and Crypto in New Igaming Regulations appeared first on Gamingo News.

Brazil Imposes Strict Payment Regulations on Igaming and Sports Betting A Revolutionary Shift in Betting Payments—Brazil’s igaming and sports betting sectors are set to undergo significant changes with the implementation of stringent new payment regulations. As detailed in Normative Ordinance No 615, published in the Official Diary of the Union on April 18, 2024, these
The post Brazil Bans Credit Cards and Crypto in New Igaming Regulations appeared first on Gamingo News.