New ordinance regulates AML/FTP rules for fixed-odds betting operators in Brazil

On July 12, 2024, the Brazilian Ministry of Finance’s Secretariat of Prizes and Betting issued Ordinance No. 1,143 to regulate rules for fixed-odds betting operators regarding the prevention of money laundering, terrorism financing and the proliferation of weapons of mass destruction (AML/FTP), as well as other related crimes.

As per the ordinance, all betting operators in Brazil must adopt internal control mechanisms and implement AML/FTP risk matrices in relation to gamblers, betting operators and their employees that contemplate the amount and volume of funds involved in virtual and real-world betting.

Operators must adopt identification procedures that allow for verifying and validating gamblers’ and platform users’ identities at the time of their registration. Among the procedures that must be implemented in this regard, the following stand out:

• Information must be obtained from the gambler or platform user to comply with the minimum requirements regarding registration data, as defined in the Secretariat of Prizes and Betting’s rules;
• Verification of whether the gambler or platform user is a politically exposed person (PEP);
• The compatibility between each gambler’s economic and financial capacity and the betting transactions linked to them.

Betting operators in Brazil will also be supervised by the Financial Activities Control Council (COAF). Among other duties,  they will be required to report any suspicions of money laundering to COAF. As such, operators must implement procedures to monitor, select and analyze bets and transactions in order to identify whether they may indicate money laundering or other related offenses.

Operators must also keep all registries and documents required by the new ordinance up to date, validated and stored for at least five years.

Although the ordinance took effect on the date it was published, the Secretariat of Prizes and Betting will implement the rules for inspecting, monitoring and penalizing non-compliance with the provisions as of January 1, 2025.

According to the Ministry of Finance’s regulatory agenda, the Secretariat of Prizes and Betting is expected to publish a further six ordinances by the end of July as part of its efforts to continue regulating Brazil’s fixed-odds betting market.

For more information on this topic, please contact Mattos Filho’s Compliance & Corporate Ethics and Entertainment practice areas.