In an exclusive article for GMB, Natalia Nogues, CEO of Control F5, explores the topic of payment methods in iGaming. Detailed by Ordinance No. 722, from the Secretary of Prizes and Bets, financial transactions must follow both the rules of collection and taxation and the permitted modalities from January 1, 2025, such as Pix and digital accounts. According to Natalia, this will ensure that the funds are traceable, increasing security for bettors.
The regulation of payments for online betting in Brazil is undergoing a significant transformation with Ordinance No. 722, which came into effect in April 2024.
With the intention of providing more security to bettors and consolidating a more sustainable betting environment, the new regulation establishes clear guidelines for financial transactions. Law No. 14.790, sanctioned in December 2023, had already started this process, defining taxes and collection rules, but it was the 2024 Ordinance that detailed the permitted payment methods.
What are the changes in payment methods for regulated gaming sites in Brazil?
The main change brought by the Ordinance is the restriction of payment methods. From now on, bettors can only make transactions through:
* Pix
* Electronic Funds Transfer (TED)
* Debit cards
* Prepaid cards
Methods such as credit cards, cash, bank slips, and cryptocurrencies were prohibited due to the difficulty in tracing the origin of the funds, which aims to inhibit money laundering practices and protect bettors from excessive indebtedness.
What are the implications of the new regulation on payment methods?
Security and transparency
The new regulation seeks to ensure that all payments are traceable, increasing security for bettors. With the prohibition of methods that do not allow clear identification of the origin of the funds, the government intends to mitigate financial crime risks and ensure that bettors' resources are managed responsibly.
Payment of prizes
Another important aspect of the Ordinance is the obligation of betting houses to pay out prizes within a maximum of 120 minutes after the event ends. This measure not only increases the confidence of bettors but also establishes a standard of efficiency for operators.
Taxes and contributions
The prizes from bets are declared in the Income Tax and are subject to taxation when the prize exceeds the exemption threshold of R$ 2,112.00. Prizes that exceed this value need to be declared and are subject to a 15% IR rate.
For betting companies or operators, the rate applied will be 12% on the GGR, a metric used to calculate gross revenue.
What are the benefits of regulating payment methods
The new legislation brings various benefits, such as:
* Greater protection of the bettor's money, inhibiting fraudulent practices and ensuring that payments are made transparently.
* State control over betting, which provides legal security and monitoring of transactions.
* Redistribution of taxes to areas of public interest, contributing to social welfare.
* Segregation of resources, ensuring that the funds of bettors are not used to cover operational expenses of betting houses.
The prominence of digital accounts in the new law
The new regulation of payments for online betting in Brazil also opens up space for the use of digital accounts, which can significantly facilitate financial transactions in this sector.
These accounts allow bettors to centralize their prize receipts and make deposits more quickly and securely. With the possibility of using methods like Pix, digital accounts offer an almost instantaneous payment experience, eliminating the need for traditional payment methods that are no longer allowed, such as credit cards and bank slips.
This innovation not only improves the efficiency of transactions but also increases user confidence, as digital accounts are designed to follow strict security and compliance standards, ensuring that bettors' financial information is always protected. Thus, their adoption represents a significant advance in the user experience, promoting a safer and more reliable betting environment.
Does your gaming site need consulting on this topic? Then, contact me.
Natalia Nogues
CEO of Control F5
