Securing a License for Gambling Merchants in Brazil

Brazil is solidifying its position as a powerhouse in the global iGaming and sports betting markets. With a population exceeding 214 million and rapid digital adoption, the potential for gambling operators is enormous. However, to legally operate in Brazil, securing a license under the newly established regulatory framework is mandatory.

Starting January 1, 2025, penalties will be enforced for operators without a Brazilian gambling license. This article explores the steps, requirements, and challenges involved in securing a Brazilian license for gambling merchants, providing a roadmap to success in this dynamic and lucrative market.

The State of Gambling in Brazil: A Growing Opportunity

Brazil’s gambling market has seen exponential growth over the past decade, with online gambling and sports betting leading the charge. According to the Blask Index, the number of iGaming participants in Brazil grew from just 1.3 million in 2016 to a staggering 189 million by 2024^[1].

In December 2023, Brazil introduced new regulations to govern online gambling, providing a framework for legal operations while seeking to curb unregulated activities. These changes aim to:

• Protect consumers by ensuring fair practices and responsible gaming.
• Generate tax revenue to support public programs.
• Create a competitive and transparent market that attracts global operators.

While the new licensing framework opens the door to exciting opportunities, it also presents challenges for merchants navigating the application process and compliance requirements.

Why a Brazilian License Is Crucial

The updated regulations aim to establish a fair, secure, and competitive gambling industry in Brazil. For operators, obtaining a license is critical for several reasons:

• Legal Compliance: Unlicensed operators face penalties, potential account freezes, and bans from operating in the country starting January 2025.
• Market Access: Licensed operators can tap into Brazil’s growing iGaming sector, projected to exceed $5 billion by 2025^[2].
• Customer Trust: A license reassures players that the operator is legitimate, secure, and adheres to industry standards.
• Payment Integration: Licenses are essential for integrating with local payment systems like PIX, which are key to user satisfaction and retention in Brazil.

Key Requirements for Securing a Brazilian Gambling License

To qualify for a license, operators must meet strict regulatory requirements that demonstrate their commitment to transparency, security, and compliance.

Brazilian Partnership

Operators must have a local partner owning at least 20% of the company’s capital. This requirement ensures that businesses maintain a strong local presence and align with Brazil’s economic interests. Choosing a reliable partner with industry knowledge and market expertise is critical to navigating the licensing process successfully.

Cybersecurity Standards

Robust cybersecurity measures are non-negotiable for licensed operators. Regulators mandate systems that protect player data, prevent fraud, and ensure platform security. Key components include:

• Data Encryption: To secure sensitive financial and personal information.
• Fraud Detection Systems: Real-time tools to identify and block suspicious activities.
• Disaster Recovery Plans: To mitigate the impact of potential cyberattacks or system failures.

Failing to meet these cybersecurity standards can result in delays or outright rejections during the application process.

Financial and Technical Stability

Operators must demonstrate financial solvency and the technical capacity to handle large volumes of transactions. This includes:

• Hosting servers in Brazil or approved jurisdictions.
• Providing regular financial reports to regulators.
• Maintaining reserves to cover payouts and unforeseen operational costs.

Responsible Gambling Measures

Licensed operators are required to implement responsible gambling practices, including self-exclusion options, deposit limits, and tools to prevent underage gambling. These measures are crucial for maintaining a safe gaming environment and complying with Brazil’s consumer protection laws.

Steps to Securing a Gambling License in Brazil

Navigating Brazil’s licensing process involves several stages. Here’s a breakdown:

Understanding Regulatory Requirements

The new gambling framework requires operators to meet strict guidelines, including:

• Establishing a legal entity in Brazil.
• Implementing responsible gaming measures, such as self-exclusion options and spending limits.
• Demonstrating financial stability and maintaining reserves to cover potential payouts.
• Complying with anti-money laundering (AML) regulations.

Each requirement must be met to avoid delays or rejections during the application process.

Submitting Your Application

Applications are submitted to the Secretariat of Evaluation, Planning, Energy, and Lottery (SECAP)^[3], which oversees licensing for gambling merchants in Brazil. Key components of the application include:

• Corporate Documentation: Proof of incorporation, ownership details, and legal representation in Brazil.
• Technical Infrastructure: Evidence that your platform meets the required standards for security, fairness, and accessibility.
• Compliance Measures: Documentation of AML protocols, fraud prevention systems, and responsible gaming tools.

SECAP reviews each application thoroughly, and the process can take several months depending on the completeness of your submission.

Meeting Technical and Financial Standards

Brazilian regulators emphasize the importance of financial and technical stability in licensed operators. This includes:

• Server Requirements: Hosting your platform on servers located in Brazil or approved jurisdictions.
• Financial Audits: Providing regular reports to demonstrate solvency and compliance with tax obligations.

Failing to meet these standards can lead to application rejections or costly operational disruptions.

Paying Licensing Fees and Taxes

Securing a license involves significant financial commitments, including:

• Application Fees: One-time charges for processing your license application.
• Annual Renewal Fees: Ongoing payments to maintain your license status.
• Gambling Taxes: Operators are required to pay taxes on gross gaming revenue (GGR), the rates of which are subject to change under evolving regulations.

Budgeting for these costs is essential for maintaining compliance and profitability.

Challenges in Securing a Brazilian Gambling License

While the licensing process is straightforward on paper, several challenges can complicate the journey:

• Evolving Regulations: Brazil’s regulatory landscape is still maturing, with frequent updates and new interpretations of the law. Staying informed about these changes is critical to ensuring ongoing compliance.

• Navigating Bureaucracy: Like many emerging markets, Brazil’s licensing process can involve extensive paperwork, multiple approvals, and delays due to administrative backlogs.

• Local Expertise: Successfully entering the Brazilian market often requires partnerships with local experts, such as legal consultants and payment processors, who understand the nuances of the country’s regulatory framework.

The Role of Payment Solutions in Licensing Success

Payment processing is a cornerstone of any gambling operation, and integrating local payment methods is critical for Brazilian customers. Licensed operators gain access to to process payments with two of the country’s most popular payment methods, including:

• PIX: Brazil’s instant payment platform, which boasts fast transaction times and widespread adoption.
• Local Credit Cards: Networks like Hipercard and ELO dominate the Brazilian market and are essential for boosting approval rates.

Partnering with a payment processor like CommerceGate, which specializes in high-risk industries and LATAM markets, streamlines this integration process.

Why CommerceGate Is Your Ideal Partner

Securing a Brazilian gambling license is a challenging but rewarding process, and having the right partners can make all the difference. Securing a license is just the first step; maintaining compliance and operational efficiency requires ongoing support. CommerceGate specializes in helping gambling merchants navigate Brazil’s market through:

• Localized Expertise: Decades of experience in LATAM markets ensure seamless navigation of Brazil’s regulatory and payment landscapes.
• Integrated Payment Solutions: Access to popular methods like PIX and Boleto Bancário guarantees a frictionless customer experience.
• Fraud Prevention: Advanced AI-driven tools protect your platform from chargebacks, fraud, and other high-risk threats.
• Compliance Support: CommerceGate’s systems are designed to meet Brazil’s AML and technical standards, simplifying your licensing journey.

With decades of experience in high-risk payment processing and a deep understanding of LATAM markets, CommerceGate is your trusted partner for success in Brazil.

^[1] https://next.io/news/features/the-anatomy-of-brazil-online-casino-legalisation-blask

^[2] https://www.linkedin.com/pulse/state-igaming-2025-emerging-trends-market-data-expert-kshitij-kumawat-zelgc

^[3] https://altenar.com/blog/navigating-gambling-regulations-in-brazil-a-guide-for-2024/