It has been 10 days since over 100 betting companies submitted their license requests to the Ministry of Finance to begin operations in 2025. Many topics have sparked discussions, such as the technical requirements that companies will have to meet when starting their operations in Brazil.
At the end of July, the Ministry of Finance's Prize and Betting Office published Ordinance SPA/MF No. 1,207, which establishes the technical requirements for online games and live gaming studios aimed at fixed-odds lottery operators.
The Ordinance includes several relevant points, among them:
- Definitions: key concepts including betting system, online game, live gambling studio, and certifying entity.
- Certification: online games must use random number generators to determine outcomes and must be certified by recognized entities, maintaining such certificates valid throughout the authorization period. Certifications must be revalidated whenever there are changes in critical components.
- Betting terminals: betting on online games is not permitted in physical establishments via devices.
- Data retention: data and documents related to online games must be kept available for five years.
- Annexes: there are annexes with detailed requirements for bettor interfaces, operation of online games, security of live gaming studios, and more, as well as a glossary explaining the terms used in the regulation.
The regulation brought in by the Ordinance is introduced at a timely moment, especially because, after the initial movement for authorizations to be obtained in the country, many discussions have taken place regarding online slot games and the so-called crash games.
Slot games, such as “Jogo do Tigrinho,” and crash games, such as “Jogo do Aviãozinho,” have been surrounded by much controversy regarding how these types of online games would fit into the brand-new regulatory framework in Brazil.
The fact is that with the advent of Ordinance No. 1,207, both slot games and crash games have now been authorized as long as they comply with the requirements set forth in Annex 1 of such rule.
Now that the regulation is being gradually implemented and with the first operations set to begin in 2025, it is crucial for operators to pay attention to the certification obligations for their platforms and games, which must meet all the compliance standards defined in the Ordinance, as well as other applicable rules.
Additionally, it is worth noting that Ordinance No. 1,207 also provides for regulations complementary to Ordinance SPA/MF No. 722, published in May, indicating that gaming and betting systems must comply with the technical and security requirements present therein, aiming to ensure the integrity of gambling operations in the country. Regarding this Ordinance, the following points are important:
- Definitions and structure of the Ordinance: the Ordinance defines fundamental concepts such as betting system, betting platform, and certifying entity. This clear approach aims to standardize the understanding of terms used in the sector, facilitating the enforcement of rules. Betting systems, for example, are defined as those that allow the management and operation of fixed-odds betting, essential for the functioning of lotteries.
- Technical requirements and location: among the main requirements, the Ordinance demands that betting systems be located within Brazilian territory, although there is the possibility of hosting abroad, provided that strict security and continuity conditions are met. This is a controversial requirement that revives discussions held in 2014 during the debate over the Civil Internet Framework (Marco Civil da Internet), when various players considered the infeasibility of business if the requirement to maintain servers in Brazil was imposed.
- Certification and oversight: to ensure compliance with established norms, betting systems must be certified by entities recognized by the Ministry of Finance. Certification is not a one-time process; annual revalidations and submission of technical evaluation reports within specific deadlines are required. This practice reinforces the commitment to transparency and responsibility in the operation of betting platforms.
- Inspection and access control: Ordinance No. 722 also emphasizes the importance of supervising and inspecting operations. Operators are required to provide detailed data about bets and bettors, ensuring information is accessible to competent authorities. Moreover, the security of systems is enhanced through rigorous access control requirements, including multifactor authentication and audit logs for each operation.
- Online games and Random Number Generators (RNG): the Ordinance establishes specific requirements for the use of random number generators in online games, which must be tested for efficiency and resistance to fraud. This measure is essential to ensure the fairness of bets and the trust of bettors in the platforms.
- Data maintenance and geolocation: operators must maintain records of bettor data for a minimum of five years, implementing backup and security methods to protect this information. Additionally, the regulation requires the implementation of geolocation measures, which are crucial to prevent fraud and ensure that bets are made from authorized locations.
- Security incidents: operators are required to maintain procedures to define, monitor, document, investigate, report, respond to, and resolve security incidents and system tampering, including detected breaches and suspected or actual intrusions, and to produce an incident report for the Ministry of Finance's Prize and Betting Office, documenting the date, time, and reason for the malfunction, along with the date and time when the system was restored. It is important to remember that if the incident involves personal data, other obligations must be met under the General Data Protection Law (LGPD in Portuguese).
Whether due to technical requirements, certifications, or security, it is essential that the new regulation brings in the legal security that the market deserves. After all, regardless of the category of games to be offered by operators, all of them fall under the umbrella of public lottery services, whose norms are governed by federal legislation such as Law No. 13,756/2018.
It is therefore relevant that legislators and regulatory entities in the gaming sector exercise the necessary caution to prevent, even unintentionally, concepts and types of lottery games from being mixed up, which could impact all aspects of the delegation of such services, whether through authorizations granted to sports betting operators or concessions of traditional state lotteries.
Thus, it is clear that the new ordinances from the Ministry of Finance represent a significant advancement in the regulation of the betting sector in Brazil, bringing in a robust set of technical and security requirements. By establishing clear and rigorous norms, the legislation not only protects bettors but also strengthens the integrity of the betting market as a whole. This movement is an important and crucial step toward modernizing the sector, promoting a safer and more reliable gambling environment.
As the betting landscape continues to evolve, adhering to these new guidelines will be crucial for the success of operations and for public trust. It is hoped that Brazil will position itself as a model of responsible regulation in the gambling and betting sector.
