Brazil Bans Credit Cards and Crypto under New Payment Rules
Brazil’s Regulatory Policy of the Prizes and Betting Secretariat (SPA) and the Ministry of Finance have banned the use of credit cards, cryptocurrency, cash, and payment slips for gambling in the country.
Brazil bans credit cards, cash, crypto, cheque and payment slips for gambling (Source: Lara Jameson, Pexels)
LISTEN TO THIS ARTICLE:Under the new rules published by the duo in the country's Official Gazette yesterday, approved operators are banned from accepting credit cards or cryptocurrency payments from bettors in Brazil.
The new rules align with the first phase of the four-part regulatory rollout revealed by the Ministry of Finance last week. It is based on the implementation of Bill 3,626, or Law 14,790, signed by President Lula da Silva in December 2023. This first stage, which ends in April, will lead to the publication of regulations regarding payment, technical, and security.
New Implemented Payment Regulations
The new regulations contain various requirements that both bettors and operators need to follow in order to participate in Brazil's online gaming and sports betting sector.
Betting, withdrawals, and payouts are only allowed through electronic transfers between operators' and bettors' accounts. The Central Bank of Brazil must authorize these accounts.
Additionally, the rules ban operators from accepting payments from accounts not registered with the bettor or transfers from third parties.
The government also forbids the role of intermediaries or middlemen between operators and players. However, institutions authorized by the Central Bank of Brazil are allowed to offer transactional accounts on behalf of operators under specific circumstances, such as giving bettors their winning prize amounts.
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Players to Get Virtual Accounts of Betting Behavior
Operators are also required to provide players with a virtual account that presents specific details about their betting habits, including the player's betting history for the past 36 months, along with the total value of ongoing bets and their financial balance.
This measure is intended to enable players to manage their financial and betting data effectively. Operators are prohibited from providing any form of compensation on accounts owned by the player.
Furthermore, operators must have a financial reserve of at least R$5 million ($953,597) in a financial institution registered with the Central Bank of Brazil. The reserve will be held in federal public bonds, separate from other proprietary accounts. The state introduced this rule to manage liquidity risks in the sector.
Forthcoming Stages in Regulatory Rollout
With the new rules now implemented, the next stage is for the SPA to release its fraud policies, which will include regulations on anti-money laundering, counter-terrorist financing, and measures to address the proliferation of weapons of mass destruction.
Stage three will see the SPA release protocols for monitoring gambling advertisements, along with technical and security specifications for online gaming in Brazil. In stage four, the final stage, the regulator will publish procedures allowing industry contributions to socially responsible initiatives.
The final stage will end by July and usher in the start of legal iGaming and sports wagering in Brazil.
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