The proposed regulatory changes to the sports betting industry in Brazil will change the dynamics of the industry. Not only will the sports betting operators in the country have a chance to seize a share of the fast-growing market, but will have a greater responsibility to verify users and balance customer experience with fraud prevention
Brazil is among the top five sports betting markets globally with revenues of nearly R$4 billion in 2022. To attract and acquire customers, operators offer lucrative incentives, such as joining bonus and free bets, among others. However, most operators currently have their headquarters located in foreign shores as sports betting is prohibited in the country. This results in a loss of revenues for Brazil.
Taking cognizance of this huge revenue loss, the Brazilian government has proposed regulation of the industry. With these regulations the government will try to drive financial benefit to the country’s economy and generate jobs for the citizens.
It may be noted that owing to being headquartered abroad, the sports betting operators in Brazil are not held accountable if users are duped or defrauded. Regulation of the industry will make the operators more accountable, as they will need to put adequate checks and measures in place to ensure the security of the users.
The impact of forthcoming regulations
Here’s a quick look at the impact the proposed regulations will have on the sports betting industry and how to plan your success:
- Competitive market: Brazil’s sports betting market is highly competitive, where operators offer numerous incentives to acquire customers. The upcoming regulations will open up the market for new entrants, enabling you to set up your base in the country. That will also mean you will face competition from other operators. Therefore, take steps to set yourself apart and gain a competitive edge.
- User acquisition: New and existing operators will try to acquire more and more customers. Keeping the onboarding process short and simple can improve conversion rates, resulting in more customers using your platform. Make the process simpler and seamless.
- Onboarding experience: Customers will sway towards an operator that offers great digital experience. Remove unnecessary friction and automate Know Your Customer (KYC) procedures to speed up onboarding, reduce manual reviews, and improve customer experience. A streamlined onboarding process can be a huge advantage while setting up your sports betting platform in Brazil.
- User identity: Upcoming regulations will place greater emphasis on companies verifying their users to prevent abuse of their platforms for criminal activities such as money laundering or fraud. Accurately verifying user identity will help you remain compliant with regulations.
- Responsible gaming: Operators are expected to promote responsible sports betting. You will, therefore, need to verify that the users trying to access your platforms are above 18 years of age by verifying the unique CPF – Brazilian identity number – for every user and all the bets associated with the user.
- Restricted lists/PEPs: Regulations prohibit operators from allowing users who may be politically exposed or part of any restricted list to access their platforms. You must verify every user on these parameters.
- Player protection: Regulations mandate that operators must prevent self-excluded individuals from participating in sports betting on their platforms. You must identify such users and prevent them from creating new accounts to regain access.
- Fraud prevention: Sports betting industry in Brazil is a hotbed for fraud. Regulations mandate that operators must ensure the online security of their users by deploying adequate fraud prevention solutions. You will need to detect and stop all fraudulent activity, notably multi-accounting, account takeover attacks, and fraudulent withdrawals.
- Regulatory compliance: Sports betting operators must strictly adhere to the prescribed regulations. Failure to do so may lead to hefty fines, legal action, and in worst cases, cancellation of the license.
Plan for success with Caf
To succeed in the changing regulatory landscape, operators must take early steps to prepare for seamless KYC, identity and age verification, fraud prevention, document verification, and protection of both existing and new players. As a sports betting operator looking to set up operations in Brazil, you need a reliable partner that has demonstrated expertise in the sports betting market in the country.
With an unmatched combination of the required expertise and tailor-made solutions, Caf is the partner of choice for leading businesses in Brazil. They use our technology to quickly verify millions of users for more accurate sign-ups and optimal user experience. Leveraging the latest technologies, we improve customer registration and onboarding experience while protecting your platforms from fraud and abuse.
Our proof-of-life, biometric technology is iBeta certified and our document verification can validate the authenticity of more than 3,500 Brazilian documents. We can enable biometric re-authentication to confidently validate users at the time of withdrawal and pay-outs to help stop account takeover attempts and excluded players.
Using advanced computer vision machine learning models, an AI-powered decisions engine, sophisticated identity orchestration, and multi-factor authentication, we deliver automated user onboarding, KYC, fraud prevention, authentication, and document verification solutions. We combine the best-in-class technology with data and biometrics, to help you quickly build and deploy multiple identity and authentication workflows to accurately identify players, comply with regulation and reduce fraud risk.
To learn how Caf can help you successfully navigate the changing regulatory landscape in the sports betting market in Brazil, talk to a Caf expert or book a demo now.