The Finance Ministry’s Prize and Betting Secretariat (SPA) published an ordinance regulating how financial institutions and payment providers must deal with unlicensed gambling companies.

Law 14.790/2023, the federal law which established the country’s new gambling market, bans both these groups from facilitating payments to offshore operators.

According to article 21 of the law, financial institutions, payment providers and payment arrangement providers cannot maintain transactional accounts with illegal operators, or carry out deposit and prize payment operations.

Reporting of suspicious cases

The new regulations also establish a 24-hour deadline for these payment businesses to report to the SPA any suspected case of a company operating illegally.

In this report, done through the Electronic Information System (SEI), they must explain why they consider the case suspicious and provide the company’s registration number and corporate name.

SPA secretary Regis Dudena said: “The new measure, together with the removal of illegal websites and advertisements, will be a fundamental reinforcement in the fight against those who want to operate without authorisation and for the protection of bettors, as it aims to prevent these websites, which put people’s economy and finances at risk, from receiving financial resources, closing the circle of illegal activity.”

If the SPA detects that any payments business is processing transactions for an unauthorised betting operator, it will issue a formal order to the business.

In this notification, the payments business will be required to provide detailed transaction data and terminate the relationship with the unlicensed operator.

As well as immediately stopping processing transactions for the illegal operator and closing any accounts associated with them, the payments company must also ensure preventative measures are in place to stop this occurring in future.

This will entail implementing systems and controls to prevent future transactions with the unauthorised operator.

Failure to take proactive measures may result in regulatory penalties, the ordinance said, while law enforcement and financial regulatory bodies may be contacted for more serious cases.