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Ministry of Finance publishes rules for the operational capacity recognition of certifying entities of fixed-odds betting and gambling systems
The Ministry of Finance, through the Secretariat of Prizes and Betting (Secretaria de Prêmios e Apostas – “SPA“), published on February 26, 2024 MF Rule No. 300/2024, which establishes the requirements and procedures for attesting the operational capacity of certifying entities of betting systems, live gambling studios and online gambling to be used by fixed-odds betting lottery operators – a modality popularly known as sports betting.
Certifying entities are legal entities with the operational capacity to be attested by the Ministry of Finance to test and certify equipment, programs, instruments and devices that comprise betting systems, live gambling studios and online gambling. It is important to note that specific regulations will still establish the technical requirements applicable to such equipment and programs.
Below, we highlight the main topics comprised by MF Rule No. 300/2024. To determine the scope of action of the certifying entities, the regulation defines the following terms:
- Betting system: computerized system managed and made available by operators to bettors that enables the registration of bettors, the management of their virtual wallets and other functionalities necessary for the management, operation and distribution of fixed-odds betting;
- Online gambling and gaming: electronic channel that enables virtual betting in a game in which the result is determined by the outcome of a random future event, based on a random generator of numbers, symbols, figures or objects defined in the rules system; and
- Live gambling and gaming studio: physical environment that uses live video transmission technology to provide live online gambling to a remote gambling device integrated with the betting system that allows the bettor to participate in live gambling, interact with gambling attendants and other bettors.
I. Who can issue certificates to gambling and betting systems in Brazil?
Only certifying entities with operational capacity attested by the Ministry of Finance will be able to issue a specific certificate for Brazil, attesting that the betting systems, live gambling studios and online gambling that will be used by sports betting operators are in full compliance with the technical requirements defined in a specific regulation.
The recognition of the certifying entity’s operational capacity will be valid for a period of three years once the recognition rule has been published by the Ministry of Finance. MF Rule No. 300/2024 also regulates the cases in which the recognition of operational capacity will be canceled, such as at the request of the entity or in the event of non-compliance with its obligations.
II. What are the main obligations of certifying entities with attested operational capacity?
The MF Rule No. 300/2024 defines several obligations that certifying entities must comply with, including the following:
- Ensure the Ministry of Finance access to all documents submitted by legal entities interested in obtaining a license for the commercial exploitation of fixed-odds betting and by operators and to the tests carried out, with the respective results, in the performance of activities related to certification;
- Issue conclusive assessment reports for certification, which should include each test carried out, the non-conformities identified and their degree of criticality;
- Inform the Ministry of Finance of any changes in the legal or organizational structure of the entity; and
- Prepare an integrity policy, showing the situations that may affect its independence and the procedures adopted with the aim of monitoring, identifying and avoiding their occurrence, as well as conflicts of interest.
In addition, the technical officer, director, manager, supervisor or any other member of the team responsible for certification assessments may not be hired by legal entities interested in obtaining a authorization for the commercial exploitation of fixed-odds betting or by authorized operators in the 12 months following the assessment.
III. What is the procedure for obtaining recognition of the certifying entity’s operational capacity by the Ministry of Finance?
The request for recognition of the operational capacity of certifying entities must be made by means of an electronic request to the SPA, accompanied by documentation relating to (i) legal qualification; (ii) tax and labor regularity; (iii) proof of reputable status; and (iv) technical qualification.
For the legal qualification, among others listed in the regulation, is required declaration by the interested party that they do not maintain relations with or depend on any other companies, private entities or bodies that have an interest in the results of the evaluations.
In addition to presenting ISO certifications for tests and inspections, interested parties must demonstrate their technical qualification by means of documentation that proves, as detailed in MF Rule No. 300/2024:
- At least three years of professional experience, with national or international references, detailing the work carried out in relation to the certification of betting systems, live gambling studios and online gambling;
- Existence, in the professional staff in charge of carrying out the evaluations, of specialists in various areas, such as mathematics, mechanical, electrical and software engineering and quality control; and
- Existence of procedures and measures to ensure the physical and cybersecurity of the information processed and the results obtained in the assessment process for certification.
In the case of foreign entities, the Ministry of Finance will accept equivalent documents issued by the competent authority in their country of origin, duly apostilled or legalized by the Brazilian Embassy or Consulate in that country, accompanied by the Portuguese version, translated by a Brazilian sworn public translator.
Verification and analysis of the documents submitted by the applicant will be completed within 30 days, although the Ministry of Finance may request additional documents and information, in which case the deadline for completion may be suspended. If the application complies with the regulations, a rule attesting the entity’s operational capacity will be published, valid for three years, as long as the conditions of legal qualification, tax and labor regularity, reputable status and technical qualification are maintained.
Considering the recent publication of Federal Law No. 14,790/2023 – which regulated sports betting –, other rules regulating the sector, such as the definition of technical requirements for gambling and betting systems, are expected to be published by the Ministry of Finance in the coming months.
Lefosse’s Public Law and Regulation Team closely monitors the changes that impact the Brazilian sports betting sector. For further clarification on this matter, or others that may be of interest to you, contact our professionals.
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