Brazil is one of the most promising gambling markets in the world. The country has a strong betting culture and there are many online sportsbooks that accept Brazilian bank transfers to bet on all kinds of sporting events. However, what can be found anywhere else around the globe may not be legal in Brazil.
To get into the football betting business, companies must pay for an expensive license that can cost up to $500 thousand USD or more depending on their size. Purchasing this “CNAE” (Regime Autorizativo de Atividade Econômica) license enables players to place wagers through local sportsbooks only.
The regulating authority in charge of issuing these licenses is known as COAF (Conselho de Administração Federal), or Council of Economic-Administrative Offices. COAF’s mission is to ensure “the proper spending of public money through the implementation of budgetary, fiscal and accounting guidelines”.
COAF is under the control of Ministry Of Finance (MoF) and it has an internal structure divided into five major departments:
- General Directorate (Diretoria Geral)
- Office for Supervision (Superintendência de Fiscalização)
- Office for Internal Control (Superintendência de Controle Interno);
- Office for Accounting Standards Implementation (Superintendência de Normas Contábeis Aplicadas às Microempresas e Empresas de Pequeno Porte)
- Office for Penal Procedures (Superintendência da Fiscalização Pena – SEFIP)
Brazilian regulation states that businesses that wish to offer online gambling services must acquire a CNAE license with category 48 – “Operation of Lotteries and Quarantine of Amusements”, which is one of four categories under COAF’s supervision. The licensing process may take up to 90 days or even more, depends on the size and scope of the business. All businesses seeking this license must meet specific requirements such as having at least three years in operation and satisfying other conditions, such as (1) an intangible asset worth at least BRL 2 million; (2) a company able to prove its capacity to pay gains (i.e., a minimum of BRL 2 million in the bank) and; (3) an auditor’s report to prove that its accounting system is compliant.
The good news for online sportsbooks looking into the Brazilian market is that the “Operation of Lotteries” category includes gambling activities such as lotteries, raffles, and sweepstakes, which makes it easier for companies to obtain this license even if they aren’t already offering any kind of gambling service.
Also, since COAF only allows yearly renewals at a cost of between $6 thousand and $14 thousand USD depending on their size and number of players, there won’t be any big changes under this new regulation until 2020 when all CNAE licenses expire.
Will this new regulation drive investors away? Brazilian Betting says no. We believe that within five years, the country will legalize online gambling for real money and it will likely be very similar to what is already offered in regulated markets like New Jersey. After 2020, companies that made the cut will feel like they won the lottery!
Brazilian Betting brings you this update by means of the Market Analysis Portal (MAP), which helps players find reliable partners through its sportsbook reviews database. MAP has no affiliation with any online bookmaker and does not recommend or encourage wagering on any particular site reviewed on its website. The content published here is not necessarily subject to specific guidelines. It is your responsibility to check whether the websites are legally authorized to operate in your jurisdiction before engaging with them.
MAP is a resource that provides information, reviews, and ratings of sports betting websites for those looking to bet online in Brazil, read more on Joo Casino. The site’s content may include third-party advertisements, MAP has no responsibility for the ads published by companies that are not under its control and MAP does not endorse any advertised product or service.
All in all, the new regulation might create some inconvenience for online sportsbooks but it won’t prompt any of them to leave the country, especially because sports betting in Brazil generates annual revenues of approximately USD 5 billion and most of it is wagered by locals and tourists.
Brazilian Betting says that the new regulation is another step forward for economic sustainability in Brazil and that sportsbooks will end up helping COAF to fight money laundering. This is what you need to know about Brazil’s new CNAE regulation.