[Portuguese Version]

On August 21st, the ACAMS Brazil Chapter brought its members together to discuss sports betting and online gaming from the perspective of Money Laundering and Terrorist Financing Prevention (AML/CFT). The event was particularly relevant as Brazil progresses in regulating the sector, aiming to align its practices with international guidelines and ensure the integrity of the national financial market.

Brazilian Regulatory Overview

The regulation of the sports betting sector in Brazil is evolving. Law No. 13,756, dated December 12, 2018, authorized fixed-odds betting, allowing the market to develop within an established legal framework. However, the practical implementation of this legislation still faces challenges, particularly concerning money laundering prevention.

The regulation of the sports betting market is part of a broader context of anti-money laundering efforts, governed by Law No. 9,613, dated March 3, 1998, known as the Anti-Money Laundering Law. This law imposes strict obligations on various sectors, including financial and non-financial institutions, which must identify and report suspicious activities to the Financial Activities Control Council (COAF).

Regulatory Challenges and International Comparison

During the event, it was highlighted that Brazil could draw inspiration from the experience of other countries, such as Australia, to address the sector’s challenges. Australia has dealt with similar issues, such as the proliferation of unregulated offshore betting houses, which pose significant risks of money laundering and match-fixing.

The Brazilian scenario, although promising, still faces uncertainties regarding the effectiveness of transaction monitoring and operational transparency. The recent creation of the National Data Protection Authority (ANPD) through Law No. 13,709/2018 (General Data Protection Law) and the regulation of specific sectors, such as fintechs and crypto-assets, demonstrate the government’s ongoing effort to strengthen the regulatory framework. However, the complexity of the sports betting market requires an even more integrated and coordinated approach.

The Crucial Role of the Compliance Officer

In the context of sports betting, the compliance officer plays a central role in adapting operators to the new regulatory framework. COAF Resolution No. 29, dated December 7, 2017, requires companies in the financial sector to implement robust compliance policies capable of preventing and detecting money laundering practices. This framework applies by analogy to the sports betting sector, which must prepare to address challenges such as detailed transaction monitoring, third-party deposit prohibition, and the identification of suspicious activities.

Sports betting companies, therefore, need to develop internal control and compliance systems that comply with COAF’s requirements, as stipulated in Federal Revenue Instruction No. 1,888/2019, which regulates the reporting of operations involving crypto-assets. This type of operation can easily be applied to the digital environment of betting, requiring continuous and sophisticated surveillance.

Integration of AML with Responsible Gambling Policies

One of the key points discussed at the event was the need to integrate AML policies with responsible gambling practices. Gambling regulation in Brazil is not limited to preventing financial crimes; it also aims to protect consumers from pathological gambling behaviors. Betting operators must, therefore, adopt policies that combine these two aspects, promoting a safe and sustainable betting environment.

The regulation proposed by Law No. 14,183/2021, which addresses taxation and regulation of the betting market, introduces control mechanisms that help prevent the use of betting platforms for money laundering while encouraging responsible gambling practices. The implementation of mechanisms such as self-exclusion and deposit limits are examples of how AML and responsible gambling policies can be integrated.

Continuous Collaboration and Dialogue with Regulators

Collaboration between market operators, regulators, and other stakeholders is essential for the successful implementation of AML measures. COAF, as the central body in combating money laundering in Brazil, plays a fundamental role in regulating the sector, requiring the reporting of suspicious operations and the implementation of strict compliance policies.

Continuous dialogue with the Central Bank of Brazil and the Securities and Exchange Commission (CVM) was also highlighted as crucial to ensuring that sports betting operators understand and comply with existing regulatory standards. These regulatory bodies, together with COAF, form the backbone of the financial sector’s compliance structure in Brazil, providing clear guidelines that must be followed by betting operators to ensure market integrity.

Current Regulations:

Regulations on Fixed-Odds Betting:

Published on 02/05/2024 at 17:01
Updated on 28/08/2024 at 15:46
– SPA/MF Ordinance No. 1,233, July 31, 2024 – Regulates the sanctioning regime within the scope of the commercial exploitation of fixed-odds lottery betting.
– SPA/MF Ordinance No. 1,231, July 31, 2024 – Establishes rules and guidelines for responsible gambling and for communication and marketing actions, and regulates the rights and duties of bettors and operators.
– SPA/MF Ordinance No. 1,225, July 31, 2024 – Regulates the monitoring and supervision of the activities of fixed-odds lottery betting and betting operators.
– SPA/MF Ordinance No. 1,212, July 30, 2024 – Establishes procedures for payment of the social destinations provided for in § 1º-A of article 30 of Law No. 13,756/2018, amended by Law 14,790/2023.
– SPA/MF Ordinance No. 1,207, July 29, 2024 – Establishes technical requirements for the operation and approval of online games and live game studios, one of the objects of fixed-odds lottery betting.
– SPA/MF Ordinance No. 1,143, July 11, 2024 – Provides for policies, procedures, and internal controls to prevent money laundering, terrorist financing, and the proliferation of weapons of mass destruction.
– SPA/MF Ordinance No. 1,132, July 9, 2024 – Approves Quinel Limited as a certification entity for betting platforms and online games.
– SPA/MF Ordinance No. 827, May 21, 2024 (Rectification) – Corrects article 15 of SPA/MF Ordinance 827 of May 21, 2024.
– Interministerial Ordinance MF/MESP/AGU No. 028, May 22, 2024 – Provides for the duties and procedures of the Ministry of Finance, the Ministry of Sports, and the Attorney General’s Office on the exploitation of fixed-odds betting in the national territory.
– SPA/MF Ordinance No. 827, May 21, 2024 – Establishes the rules for betting operators who wish to operate legally in the national market to apply for authorization (Annexes).
– SPA/MF Ordinance No. 749, May 9, 2024 – Approves Gaming Associates Europe Ltd as a certification entity for betting platforms and online games.
– SPA/MF Ordinance No. 722, May 2, 2024 – Establishes general rules for the operation of betting systems and data supply for Sigap in the operation of fixed-odds lottery betting.
– SPA/MF Ordinance No. 615, April 16, 2024 – Establishes general rules for payment transactions in the operation of fixed-odds lottery betting (Art. 2º amended by Art. 11 of SPA/MF Ordinance No. 1,207).
– SPA/MF Ordinance No. 603, April 15, 2024 – Approves BMM Spain Testlabs as a certification entity for betting platforms and online games.
– SPA/MF Ordinance No. 588, April 11, 2024 – Approves eCogra Limited as a certification entity for betting platforms and online games.
– SPA/MF Ordinance No. 561, April 8, 2024 – Defines the regulatory policy and agenda for the exploitation of fixed-odds betting.
– SPA/MF Ordinance No. 504, March 22, 2024 – Approves Gaming Laboratories International LLC as a certification entity for betting platforms and online games.
– SPA/MF Ordinance No. 300, February 23, 2024 – Establishes requirements for approving certification entities for betting platforms and online games.
– Decree No. 11,907, January 31, 2024 – Updates and enhances the structure of the MF by establishing the new Secretariat of Prizes and Betting (SPA).
– Law No. 14,790, December 29, 2023 – Regulates the exploitation of fixed-odds betting and includes online games in this category.
– MF Ordinance No. 1,330, October 26, 2023 – Provides general conditions for the commercial exploitation of fixed-odds lottery betting in the national territory, as per Law No. 13756/2018, and regulates general rules on bettors’ rights and obligations, money laundering prevention, responsible gambling, and prior expression of interest.
– Law No. 13,756, December 12, 2018 – Legalizes fixed-odds betting, in the form of sports betting.

Source: https://www.gov.br/fazenda/pt-br/composicao/orgaos/secretaria-de-premios-e-apostas/legislacao/apostas

Consolidated Toolkit: AML and Sports Betting Regulation in Brazil

To consolidate the content discussed and provide comprehensive guidance on the topic, here is a toolkit that integrates the main points of the articles discussed:

1. Legislative Base:
– Law No. 13,756/2018: Authorizes the modality of fixed-odds betting in Brazil.
– Law No. 9,613/1998: Establishes the regulatory framework for anti-money laundering.
– Law No. 13,709/2018: General Data Protection