Brazil plans to restrict bettors from using credit cards to fund accounts. Operators will also be prohibited from offering credit on their sites.
The Brazilian government is cracking down on unauthorized gaming operators to battle what it describes as a gambling “epidemic.”
Finance Minister Fernando Haddad said Tuesday that, beginning Oct. 1, online companies operating without government consent will be restricted, according to a Bloomberg report. He added that Brazilians have financial problems because of money directed to sports betting, which causes families to go into debt.
“It’s becoming a serious social problem, and we have to face it,” Haddad said.
Brazil plans to restrict bettors from using credit cards to fund accounts. Operators will also be prohibited from offering credit on their sites.
Fixing the problem
This is part of a larger process under President Luiz Inacio Lula da Silva, who’s attempting to tame and regulate one of the fastest-growing gaming markets in the world.
Roughly 52 million people are gambling, including around 25 million in the last six months, according to a report from Brazilian research firm Instituto Locomotiva.
The central bank and regulators have discovered a growing trend of Brazilians developing financial issues stemming from gambling. Wagering has become a major part of the middle class in Brazil as well.
Brazil legalized online wagering in 2018 with no real governmental parameters.
That changed in late 2023 when Lula signed a regulatory framework bill into law with the hope of completing the process by early 2025.
Lucrative market
Meanwhile, more than 130 sports betting and iGaming operators have lined up to submit licensing applications under the new framework.
Major gaming companies like Entain, bet365, and Flutter already have a presence in Brazil and are more than willing to pay the $5.9 million licensing fee to operate under regulations.
Flutter, which owns U.S. brand FanDuel, recently acquired a 56% stake in NSX Group’s Betnacional for even more Brazilian access.
MGM, DraftKings, and Hard Rock have reportedly shown interest in operating in the incredibly lucrative market.
The NFL played a regular-season game there in Week 1. With rising interest in the American football league combined with an intense passion for soccer, it’s no surprise that Brazil generated top-10 gross gaming revenue globally in 2022.