How to Start an Online Casino in Brazil

How to Start an Online Casino in Brazil

Starting an online gambling business in Brazil is among the most popular topics in the industry today because exactly at the moment, the history of Brazilian gambling is being created. 

In 2023, President Lula da Silva enacted a turning point in Brazil’s sports betting landscape by approving a new law that offers both online and land-based sports betting licenses. The progress in this area builds upon the foundation laid in 2018 with the legalisation of sports betting under Law No. 13,756.

The recent law adopts a provisional measure strategy. This approach involves a 60-day trial period, with the option of extending it for another 60 days. However, the law’s lasting implementation hinges on receiving approval from Brazil’s National Congress. It ensures the transition from a provisional measure to a permanent law.

President Lula’s advocacy of these regulations reflects a strategic advancement. It presents a spectrum of opportunities for both local and international operators, ultimately contributing to the growth of the region’s economy. As Brazil prepares for the forthcoming implementation of these regulations, the sports betting sector is poised for a comprehensive and transformative evolution.

As the sports betting sector progresses, the horizon seems promising for the eventual legalisation of online casinos. With the encouraging advancements in this jurisdiction, both operators and players can look forward to potential strides in the casino domain.

Given the positive landscape, let’s dive deeper into the market, exploring the process of launching an online casino in Brazil and the crucial factors to bear in mind. 

is Online Gambling Legal in Brazil?

When we seek to address this question with absolute clarity, unfortunately, the response may sound discouraging.

Online gambling is largely illegal in Brazil, except for sports betting. Several bills aiming to legalise online gambling are being considered.

However, this simplified answer does not fully represent Brazil’s complex legal and market situation. It’s crucial to delve into regulatory nuances and the region’s historical tendencies.

In spite of Brazilians’ cultural inclination to entertainment, the betting industry has faced a turbulent history. For the majority of the past 70 years, gambling has been illegal in the country, resulting in a halt to industry development. In 1946, a comprehensive ban took effect on all types of land-based gambling, which forced many establishments to close. 

With the advent of the internet, it was generally accepted that iGaming was also subject to these restrictions. In recent years, Brazil has attempted to clarify the online gambling regulation and ban it officially several times. 

One notable example appeared in 2010 when the Brazilian Congress attempted to pass a bill that would prohibit financial transactions at online gambling sites within the country. Similarly, in 2013, the Commission of Science, Technology, Innovation, Communication, and Computing (Comissão de Ciência, Tecnologia, Inovação, Comunicação e Informática (CTIC)) voted on a law project aimed at banning online gambling throughout Brazil.

Following repeated unsuccessful attempts, Brazil’s regulatory climate remains unclear, lacking a specific framework to bring clarity to fragmented initiatives.

For a long time, the gambling landscape in Brazil was limited to specific forms. There were only two forms of gambling allowed in the country: state-run lotteries and horserace betting. Despite the restrictions and the centralised authority, the initiative was still a significant step towards providing legitimate alternatives for Brazilians.

In terms of legality, poker occupies a relatively grey area. Since poker relies more on skill and less on luck, the game has been removed from the list of gambling activities. In response, the number of both online and offline poker rooms multiplied. However, the classification and status of poker within the realm of gambling are not clearly defined, since there is no clear law covering this particular activity.

Over the last few years, the iGaming world has closely watched the development of Brazil’s regulatory framework, as there are a number of positive trends. A major change in Brazil’s status quo was achieved in 2016 with the Brazilian Gaming Congress, which attracted many entities interested in exploring and investing in the sector. 

Online gambling regulation in Brazil turned a corner in 2018, when the government introduced a law that would create a single framework and unify fragmented online gambling sector. Due to the impact of COVID-19 and the 2022 presidential election, the progress of this legislation was postponed. Nevertheless, in 2023, the President endorsed the bill, which now awaits congressional approval to achieve full legal status. 

Despite facing delays in the regulatory processes, the Brazilian government remains committed to providing clarity and actively regulating the gambling industry. This effort is driven, among other things, by the goal of stimulating economic development in the region. For example, in September 2022, Brazil implemented a new law requiring the introduction of temporary lotteries. The funds raised were designated for healthcare and tourism purposes.

To wrap up, the federal structure of Brazil has both advantages and limitations for the online gambling industry. As of now, the question of whether gambling in Brazil is legal or not has no satisfactory answer. While there is no general regulatory approach in place in Brazil, each state assumes that anything not prohibited is allowed, including lottery games.

Brazil Online Gambling Market Overview

With a population of 214.3 million, 77.87% internet penetration rate, and the historic love of local citizens for various games of chance, the Brazilian online gambling market has a lot to offer international operators.

Although the legalisation of online gambling has yet to take place, there are no resources available to control and prevent this kind of gambling, and players from the country are free to access offshore websites. If we look at the offline sector, the situation is comparable: the report by Brazil Betting Focus stated that before the pandemic, approximately 200,000 Brazilians were travelling abroad every month to engage in gambling activities at foreign casinos. 

As far as the market size is concerned, the outlook is more than just positive. According to Statista, Brazil’s online gambling market will grow at a compound annual growth rate of 18.82% and reach EUR 3 billion by 2027. 

There are several social aspects that will assist iGaming operators in developing a solid grasp of today’s gambling in Brazil. Simply put, Brazilians are among the most tolerant audiences for online gambling. Brazil’s competitive nature, love for football, and desire to have fun explain why the market is so promising. 

Gambling has also played a significant role in the lives of Brazilians for centuries, taking various forms such as horse racing, lotteries, and bingo. 

In terms of the motivation for sports betting, which is the most popular form of gambling in the region, 60% of bettors cite entertainment or recreation as their reason for participating. Sports betting is viewed as a means of socialising with friends by 13% of respondents, while 12% see gambling as a direct source of income, putting them at risk of responsible gambling.

Payment Processing for Online Gambling

As in any market, payment processing poses a significant challenge for iGaming operators in Latin America (LatAm). The majority of payment systems are under government control, adding complexity to the endeavour of starting a casino in Brazil. Additionally, cash-based payment options remain highly popular among the public (54% for digital payment methods and 46% for cash, according to market research and data provided by international consulting firms in Latin America).

Which payment systems are a must-have for entry into the Brazilian market?

  • Pix. Developed by the Central Bank of Brazil, the Pix system facilitates real-time payment transactions and transfers. This system has gained widespread adoption due to its convenience and accessibility, significantly transforming the country’s payment landscape and reducing dependence on traditional banking methods.
  • Boleto. Introduced as a response to the Pix system, Boleto is a local voucher system overseen by the Central Bank of Brazil. It addresses the limitations of its predecessor and offers additional features such as faster payment processing and 24-hour access.
  • Electronic wallets. Including highly popular options like Pay4Fun and Evino in the list of payment methods will enhance user convenience. 
  • Debit and credit cards. With increasing digitisation and globalisation, this type of online payment is building up its influence in Brazil. It is important to accept both global payment providers like Visa and Mastercard, as well as local credit cards such as Hipercard and Elo. 

It is important for operators to strengthen their anti-fraud efforts, considering the popularity of vouchers among the population. Betting vouchers can be purchased offline, making the process of betting anonymous and increasing the risk of fraudulent activities. 

For example, vouchers have limitations on the speed at which payments can be processed: it can take up to 3 days on average, and players can exploit this delay to play with funds that don’t belong to their account.

Crypto Gambling in Brazil

Another important point to note in relation to finance is crypto gambling. Despite the difficulties faced in 2022, leading cryptocurrencies have shown signs of recovery in their value. This positive trend applies to the online gambling sector as well.

According to a report from SOFTSWISS, which examines over 700 brands, the volume of crypto betting in Q1 2023 has increased by 19% compared to Q4 2022. It appears that the use of cryptocurrencies within the online gambling community has begun to recover.

Looking closer at the preferences of the region’s population, in 2021 alone, there were USD 38 billion worth of crypto purchases and sales in Brazil. Over the course of 2022, the Brazilian government and Congress engaged in discussions surrounding the regulation of cryptocurrencies. Just days before the end of the year, then-President Jair Bolsonaro signed the respective law, underlining the growing significance of cryptocurrencies in Brazil.

The escalating demand from the public and government towards cryptocurrencies highlights their relevance for consideration before entering the Brazilian market. Enriching your payment portfolio with cryptocurrencies will be in line with the evolving preferences and demands of Brazilian customers.

Languages

As an international language, English is obviously a win-win option to use for launching an online casino anywhere in the world. However, localisation is setting its own rules in 2023 – in local markets, it’s essential to make an extra effort and provide players with the most familiar interface. 

For example, it is worth considering a site in Portuguese for Brazil since 98% of the population identifies it as their native language. With multiple locales, an online casino can expand its local target audience and make the player experience streamlined and enjoyable.

Starting a Casino in Brazil: Software Requirements

The software for an online casino targeting Brazilian players should meet several important requirements besides regular ones, such as security, simple and flexible administration, an effective affiliate management system, bonuses, and payments. The last includes the previously mentioned payment options, as well as crypto processing, needed to gain a competitive advantage.

It’s important to highlight the strong preference for mobile betting among locals. Having a well-designed mobile version or app that works on popular systems would be a big advantage.

When expanding an online casino to the Brazilian market, scalability becomes a crucial factor to consider. One area of significant interest for the population is sports betting, which presents a great opportunity for business growth. Integrating a sportsbook into your online casino and offering a seamless user experience with a single wallet between casino and sports can significantly enhance the success of your venture in Brazil.

When establishing an online casino in Brazil, it’s crucial to look to the future. The software ecosystem by SOFTSWISS is designed for swift entry into the Latin American market and is poised for future advancements. 

The Casino Platform, featuring cryptocurrency support, a multi-lingual interface, and a robust back office, is an excellent choice for operators aiming to expand in Brazil. The platform seamlessly aligns with the SOFTSWISS Sportsbook, a software platform to launch a sports betting business online with distinctive bonuses.

In a competitive market, differentiation is key. To capture the attention of Brazilian players, the Game Aggregator, a hub offering 16,000 games from 200+ game providers, and the Jackpot Aggregator, a software system for launching and managing exclusive jackpots, assure maximum player engagement. The SOFTSWISS software product ecosystem is fully cross-compatible, empowering operators to create a tailored winning combination for their specific market.

Casino Game Preferences in the Brazilian Gambling Market

Brazilians love the game of chance and skills in all of its varieties, from sports betting, lottery, and bingo to the famous Jogo do Bicho. According to Statista, roulette is at the top of the list, a classic casino game that offers thrilling excitement and the chance to win big. Whether it’s a European, American, or French version, Brazilians enjoy the thrill and strategy of placing their bets and watching the wheel spin.

Blackjack is another popular game among Brazilian online casino players. Table games generally hold a special third place in the hearts of Brazilian players. These activities offer a good mix of strategy and luck, allowing players to challenge themselves against the house or other players.

Slots, the eternal and unchanging leader of all the ranks, also have a significant following in the Brazilian online casino scene. Whether traditional three-reel fruit slots or modern video slots with multiple pay lines, Brazilians enjoy spinning the reels, eagerly waiting for a winning combination.

As previously discussed, poker owes part of its popularity to poor regulation of skill-based games, ranking fifth among Brazilian gambling activities.

Lastly, live dealer games have gained immense popularity among Brazilian online casino players. It comes as no surprise that socially active Brazilians are ready to engage in live online gaming and build a vibrant gaming community, as their sense of belonging knows no barriers, neither in real life nor online.

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Sports Betting in Brazil

Before we move on to the marketing of online casinos in Brazil, let’s take a look at sports betting. Any operator considering entry into the Brazilian market ideally should recognise the need to seamlessly integrate both casino and sportsbook services under a single iGaming brand. This combination is particularly crucial in Brazil, given the population’s passion for sports gambling.

Figures back up the hypothesis: according to the TGM Gambling and Sports Betting Survey, nearly one-third of the population bets on sports several times a week, while 8% bet daily. The fact that Brazil stands as the most populous country in the continent leads to a logical conclusion: the market for sports betting business development here is full of promise.

Identifying the optimal niche requires an analysis of Brazilian preferences. According to Statista’s findings, football has a huge lead, accompanied by popular disciplines like basketball, poker, and horse racing. 

Moreover, this is where the growing popularity of esports in Brazil enters the equation. Statista’s report suggests that the user base for esports will exceed 24 million by 2027. This emerging market presents a valuable opportunity for bookmakers to tap into, expand their audience, and capture the attention of younger bettors.

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Another great potential lies in offering innovative features and services to differentiate your sports betting website from competitors. When it comes to uniqueness and gamification, the SOFTSWISS Sportsbook team holds the top spot. 

The sports betting management platform is equipped with 4 unique types of bonuses as well as jackpots, giving bookmakers the ability to cater to audiences in any market. By constantly staying updated with the latest trends, SOFTSWISS bookmakers provide an exceptional bettor experience and cultivate a loyal customer base.

Marketing to Start an Online Casino in Brazil

Since online gaming is still in the grey zone, open marketing methods such as Google Ads or TV promotion haven’t been an option so far. If the anticipated law projects are accepted, and online gaming websites in Brazil are made legal, these opportunities will open up and make casino promotion easier. 

For now, an effective marketing strategy includes building a network of affiliates, placing info on the casino in reputable online resources, pay-per-click campaigns, and SEO.

a Sleeping Giant Awakens

Brazil is the jewel in the crown of Latin America, with enormous potential for development in online gambling. In view of the positive impacts of regulations implemented in Colombia, it is evident that such measures can greatly improve the nation’s financial stability, bolster essential sectors like healthcare, and drive overall economic growth (+217 new job positions alone for the upcoming regulatory body for sports betting).

The introduction of sports betting regulations in 2023 in Brazill marks a significant milestone in the region’s economic development, attracting investments and businesses that will contribute to its flourishing. Once the sports betting law gains final approval, the next move will involve creating and approving rules for overseeing both online and offline casinos. Experts anticipate this step to follow soon after.

Since 2018, the entire expert iGaming community has been waiting for the wind of change that will open Brazil to the legal online gambling business. Even though online casino regulation has yet to be established, now is the best time to remain focused, seize the opportunity, and start preparing to enter this thriving market in order to take advantage of its endless prospects.

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