Compliance in the Sports Betting Act

In recent years, the online betting and betting sector has gained more and more space in Brazil, attracting millions of users around the world, including Brazil. With the popularization of digital platforms and the ease of access through apps and social networks, this sector has established itself as one of the main forms of online entertainment. However, rapid growth also brought challenges, such as the need for regulation, consumer protection, and the fight against money laundering, leading governments to adopt stricter measures to ensure a safe and transparent environment.

Before continuing your reading, we want to clarify that our focus and objective is to bring an understanding of how compliance can establish clear guidelines and grant limits for companies in this sector to operate within the regulations, with greater responsibility.

About the Law

Recently, with the enactment of Law 14,790/2023, the country took an important step to organize this growing market, establishing clear rules for the operation of these platforms.

This legislation, known as the “Bet Act”, creates a specific regulatory framework for the sports betting sector, focusing on compliance mechanisms and guidelines for responsible advertising. The objective is to ensure that the operation of these companies is transparent, secure and that it protects the consumer against possible abuses.

With the new legislation, bookmakers must adopt policies to prevent money laundering, the financing of illegal activities, and the proliferation of weapons of mass destruction.

To continue operating, platforms must implement internal control procedures, comply with integrity standards, and report any suspicious movements to the competent authorities. This concern follows a worldwide trend to prevent betting from being used to camouflage ill-gotten gains.

Compliance and regulatory demands

With the advent of the Bets Act, companies in this sector need to prioritize the implementation of effective compliance policies. This means adopting more robust internal controls, promoting the prevention of money laundering, the financing of illegal activities, and the proliferation of weapons of mass destruction. These measures aim to ensure that the platforms' operations are transparent, ethical, and in compliance with established regulatory standards.

Companies must also implement monitoring and communication processes with competent authorities, such as the Ministry of Finance, in order to report suspicious movements and ensure that their operations are auditable and secure.

Failure to comply with these regulations may entail serious financial and reputational risks, in addition to the blocking of sites that operate in non-compliance with the law.

The importance of advertising regulation

In addition to compliance issues, the law also provides specific guidelines on advertising in the sector. Advertisements must follow a standard of social responsibility, without creating unrealistic expectations about possible gains. Campaigns also cannot be aimed at minors, and any suggestion that gambling could be a solution to financial problems is prohibited. This regulation seeks to protect consumers, especially the most vulnerable, such as teenagers and people in debt.

The current regulations, together with specific rules of advertising self-regulation, aim to create a safer and more ethical environment for all those involved, ensuring that the sports betting market operates fairly, without misleading promises and with a strong commitment to social responsibility.

Corporate Governance and Compliance: An Imperative for Every Company

Although the legislation is specifically aimed at regulating betting, it reflects a growing trend in several economic sectors: the demand for greater social responsibility, transparency, and the implementation of robust corporate governance policies.

Compliance practices, for example, such as preventing money laundering, monitoring suspicious activities, and communicating with regulatory bodies, are applicable to various industries, especially in sectors that handle large volumes of financial transactions, such as technology, healthcare, banking, and retail.

Companies from other niches may see the need to adopt stricter control and transparency policies, whether in their internal operations, in business partnerships, or in advertising campaigns, to ensure that they operate within the regulations and minimize regulatory and reputational risks.

The technology sector, for example, is already feeling the impact of regulations on data security and privacy issues, and compliance requirements may extend to market practices and financial operations. This creates an environment in which stronger corporate governance becomes essential, raising the standard of ethical and regulatory behavior expected of all companies, regardless of the segment.

If your company has not yet adopted robust compliance policies or is seeking to improve its internal controls to ensure compliance with legal and regulatory requirements, now is the ideal time to act. Vennx offers customized solutions to help companies from all segments implement and strengthen their compliance practices, ensuring transparency and accountability at every stage of the process.

Contact one of our advisors specialized and discover how we can help your organization align with the best practices in the market, mitigating risks and ensuring the security and reputation of your business.

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