Brazil’s new regulatory landscape presents a harsh reality for many operators, writes Stephen Aupy of Mindway AI.
With some of the world’s most rigorous technical compliance and reporting standards, the market is a high-stakes, make-it-or-break-it competitive environment that’s got some industry commentators forecasting troubles ahead.
But look at this exciting new market with a fresh perspective: Instead of viewing new regulations as an obstacle, embrace them as a way to gain a competitive edge, while meeting compliance requirements.
In this latest edition of Compliance Corner I explore Brazil’s progressive approach to technical regulations, strategies for staying ahead — and the critical balance between effective regulation and sustainable growth.
Beyond Brazil
I believe that Brazil has set a global precedent for how new and emerging markets should regulate.
So I would like to make comparisons beyond LatAm, especially when it comes to Responsible Gambling and embracing the latest technologies and innovative approaches to help mitigate gambling-related harm.
Historically, we tend to see markets like the US and Canada (Ontario) regulate but not with sustainability being at the forefront of the industry; there are structural differences between Brazil and these markets given that Brazil is not fragmented and is regulated federally. But things such as a centralised self-exclusion scheme are already being formulated.
Meanwhile, Canada and the US are still struggling on this front and have decided to introduce protocols like this further down the line, allowing harm to occur before addressing them years later.
The Ministry of Finance (MoF Brazil) has done its homework on the various approaches toward achieving industry sustainability.
From a Mindway AI perspective, we were pleasantly surprised to see that the MoF has mandated the use of AI monitoring systems through the Responsible Gambling Ordinance, which came into effect in early January 2025.
Globally, we are seeing more mature markets adopting this approach, but it’s very refreshing to see Brazil, a market in its infancy, taking the lead with the potential to set guidelines based on the errors we have seen other regulators make here in Europe.
I also found it very interesting that they have mandated that operators integrate advanced identity verification systems such as 3D facial Biometrics.
I have heard a lot of mixed reactions surrounding this, but in my personal opinion, these are measures that need to be taken given the extensive harms that have arisen over the last decade due to Brazil being a grey market and addressing underage gambling.
Finally, and I’m sure they are not the first market to adopt this, I like how they distinguish between an online gambling operator and an unlicensed operator by ensuring that all licensees have a “.br” domain. Operators without this domain are clearly labelled as illicit/unlicensed.
A Fresh Perspective
From a Responsible Gambling perspective, they have laid out more requirements than most new and emerging markets.
The regulatory framework in Responsible Gambling incorporates Age Restrictions, Self Exclusion and Time Outs, Time Requirements and Reality Checks, Financial Limits, Customer Interactions and Responsible Messaging, to name a few.
AI has emerged as a game changer for Responsible Gambling, revolutionising how players can be protected and ensuring a safe and responsible gaming environment.
Each of the above Responsible Gambling requirements can be easily achieved for all licenced Brazilian operators by adopting intelligent AI behavioural monitoring systems.
My advice to all operators in this space is to start putting your feelers out there and engage with groups like ourselves and others in this space, which can help you optimise, streamline, and integrate all these various processes into one system.
I would also advise against attempting to build this in-house.
The knowledge [just] isn’t there. And such systems must be frequently maintained, which is time-consuming and expensive. The regulatory landscape will also continue to change and evolve throughout the years with new requirements from the regulator.
Game Changer
I believe the Brazilian regulatory body is most certainly leading the way for tech alignment in the Responsible Gambling Space.
Over the last three-years, we have witnessed the rise of artificial intelligence in the remote gambling industry – and it’s been a game changer, revolutionising the ways players can be protected and ensuring a safe and responsible gaming environment.
In addition to enhancing Player Protection, technological safeguards play a crucial role in ensuring regulatory compliance and Responsible Gambling practices.
When we investigate the tech synergy of AI monitoring systems, we can now understand why more regulators are stipulating using such systems. I believe that this particular tech synergy facilitates a smoother interaction between the regulator and operator from a Responsible Gambling perspective.
Systems like GameScanner can now analyse vast amounts of customer data. AI systems can pinpoint potential violations such as underage gambling, breaches in RG requirements or problematic changes in player behaviours, which empowers gambling operators to take appropriate actions promptly.
As all customer interactions can be logged, AI monitoring systems allow operators to run internal or regulatory audits, which enables the regulator to see how a specific operator is sustaining their customer database should they wish to investigate operator practices.
In terms of providing a personalised customer experience, integrating AI algorithms into online casino platforms facilitates this and optimises operations.
AI-powered recommendation systems that can answer certain queries at unsocial times of the evening also improve customer engagement and satisfaction, leading to increased customer retention and loyalty.
Building Balance
From Mindway AI’s perspective, implementing robust regulation in the iGaming sector is essential to ensure a safe and reliable environment for operators and consumers — especially in developing markets like Brazil.
But it is also crucial that this regulation is structured in a practical and applicable manner.
Excessively complex and bureaucratic regulations can hinder the competitiveness of licensed operators, making them less efficient compared to offshore operators, who, by nature, have several competitive advantages, such as lower costs and greater flexibility.
This disparity can lead to an unbalanced market, where licensed operators face significant difficulties in attracting and retaining consumers, which may, in turn, make the regulated market unsustainable.
An overly stringent regulatory environment can weaken the core objectives of regulation, such as consumer protection, data security, and the prevention of financial crimes.
In conclusion, it is essential that authorities seek a balance, ensuring that licensed operators have adequate conditions to compete while maintaining market security and trust.
