With the recent enactment of Law No. 14,790/2023, Brazil has taken a significant step in regulating fixed-odds betting, popularly known as sports betting. This law, which has become a landmark for the sector, was complemented by Ordinance No. 1,143/2024 from the Ministry of Finance's Sports Betting Office (SPA) to establish specific policies, procedures, and internal controls that must be adopted by betting operators to identify and prevent suspicious activities related to money laundering, terrorist financing, and the proliferation of weapons of mass destruction (AML/CFT), in compliance with the requirements imposed by Federal Law No. 9,613/1998, the anti-money laundering law, and Federal Law No. 13,810/2019, which prevents terrorist activities.
According to the new rules, starting January 1, 2025, betting operators will be required to submit annual reports to SPA/MF, documenting the anti-money laundering practices adopted in the previous year. This report must include an internal assessment of the risks associated with the products and services offered, with the responsibility for defining the risk matrix resting with the operator. The control carried out by the Sports Betting Office goes beyond anti-money laundering practices to also include, as determined by law, the combat of related crimes, generally frauds and crimes against the national financial system.
Failure to comply with the rules may result in administrative sanctions under the federal anti-money laundering law, ranging from warnings to monetary fines, including temporary disqualification of corporate administrators and revocation of authorizations to operate.
The central point of the regulation is to enable an ecosystem that allows for detecting and reporting suspicious money laundering activities to the Financial Control Council (COAF in Portuguese). The main risk indicators include transactions with no economic rationale or dissociated from the bettor’s economic and financial conditions, sharing of false information at the time of registration on the platform, atypical financial movements, and improper use of accounts by third parties. If such activities, among others that may be considered suspicious, are detected, the operator has until the next business day to forward the communication to COAF.
In addition to these measures, the new regulation requires operators to develop robust compliance programs focused on preventing money laundering and combating terrorism, and to implement comprehensive internal policies involving employees, partners, and third-party service providers. The emphasis is on creating a compliance environment that addresses not only betting operations but also all business activities and hiring of employees, as well as operations involving financial and real estate assets.
The regulation is part of a global context of increasing scrutiny over the betting sector. In the United States, for example, the National Money Laundering Risk Assessment (NMLRA) highlighted the rapid growth of the online sports betting sector and the lack of specific regulations as significant risk factors for money laundering. Similarly, European countries such as Malta and England have already implemented rigorous anti-money laundering requirements for granting operating licenses, establishing high standards that Brazil is now beginning to follow.
Thus, the new Brazilian regulation reflects the need, in a globalized world, for betting operators in several countries to standardize the due diligence procedure, mitigating risks of potential administrative liability for non-compliance with the established parameters. Additionally, it addresses the criminal liability of individuals for participating in typical money laundering activities carried out by third parties, users of betting platforms. A virtual environment capable of preventing and combating money laundering and terrorist financing will only contribute to the organic and responsible growth of the industry.
