When the Secretariat of Prizes and Betting (SPA) was established under the Brazilian Ministry of Finance (MF), it introduced an array of new regulations that significantly impacted gaming and betting operators in Brazil regarding compliance requirements. Managing these impacts necessitated learning from mature operators in global markets.
The regulation of sports betting and online gaming in Brazil is predominantly governed by Law No. 14,790/2023. The SPA issues mandatory ordinances defining operator responsibilities.
One such ordinance is SPA/MF No. 722/2024. This ordinance sets comprehensive technical and operational system requirements, including user identification, data security, and geolocation. In contrast to many other jurisdictions, these rules require players in Brazil to complete facial recognition during onboarding at online casinos and sportsbooks. Facial recognition is also required when a user needs to recover their account after forgetting their login information. In addition, they must be verified against the Receita Federal’s CPF database in real time.
Online gambling operators in Brazil must also utilize geolocation technology to ensure that players are in a permitted location when they bet or play games. This technology must be employed when bets are placed and at regular intervals during gameplay.
The operational strain of complying with these requirements is onerous. Balancing this friction with UX performance is complex.
Gaming operators, compliance officers, and platform architects must combine mandatory security layers with consumer UX features, such as immediate PIX/TED transaction settlements.
If UX is not as expected, players may abandon a platform. This churn can be exacerbated by excessive verification, with players becoming tired of lengthy and complicated processes. As a result, technical teams are forced to seek advanced data models and system designs that maintain a seamless UX whilst complying with anti-money laundering regulations.
To overcome potential onboarding bottlenecks caused by verification processes, Brazilian gambling industry professionals frequently audit international standards to see how mature, multi-jurisdictional brands manage verification without damaging UX and experiencing excessive churn.
Analyzing how mature international brands structure their onboarding workflows and cash-out systems by drawing on an independently compiled, externally verified industry registry of operators like those in the US provides Brazilian online gambling industry professionals with critical data on cross-border KYC optimization and platform security standards.
Utilizing this data is likely one factor in the slight easing of friction in the regulated Brazilian market. Directly after the enactment of Law No. 14,790/2023, on January 1, 2025, many licensed operators reported issues with friction in the registration and onboarding process, caused by stringent know-your-customer (KYC) requirements.
Since these initial concerns were raised, operators and KYC providers have improved their tools, thereby reducing friction. While there is room for further progress, learning from other jurisdictions and utilizing improved technology is allowing the industry to move forward in the regulated market while maintaining an expected level of UX.
