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With just days until Brazil’s regulated market launch on January 1, the industry does not know exactly how many operators will be able to clear the remaining compliance hurdles and be licensed to go live.

Testifying before a Senate commission on December 10, Brazil’s chief betting regulator said that 71 of 114 eligible applicants had been notified that their applications were successful and they could move to the next and final stage of the licensing process. 

As of that Senate hearing, 16 operators had already paid an upfront licence fee of R$30m (US$5m), and Globo reported on Saturday (December 21) that 55 companies have now made the payment.

Still, that is arguably the more straightforward of several final steps in the process, and there is no guarantee that all operators that have paid the R$30m fee will be included on a list of initial licensees that Brazil’s Secretariat of Prizes and Bets (SPA) is due to publish before the end of the month.

In addition to paying the licensing fee, operators have 30 days from notification of their successful application to provide proof of minimum social capital of R$30m plus financial reserves of R$5m, along with evidence of the legitimate origin of their finances.

They also must establish customer-support functions within Brazil and register a "bet.br" domain name for their Brazilian operations, in accordance with a November 5 directive.

For many operators, the last phase of the licensing process has also overlapped with a series of deadlines to obtain customer consent and apply Know Your Customer (KYC) checks so that they can apply for permission from the SPA to migrate the accounts of existing Brazilian players to their regulated platforms.

“It is indeed a significant amount of work for operators who received the payment notification to meet all the requirements outlined by the SPA at this late stage,” said Fernanda Meirelles, senior partner at FAS Advogados law firm in São Paulo.

It is unlikely that all of the 70-plus companies notified by the SPA will make it to the starting gate on January 1.

“Many are navigating these requirements for the first time, and tasks such as customer fund migration and compliance with payment processing rules are particularly complex,” Meirelles told 91����ԭ�� GamblingCompliance.

“Additionally, some companies are still finalising deals to secure the funds necessary to cover the licence fee, which further delays their ability to meet all requirements within the timeframe.”

Perhaps the biggest challenge that operators face is submitting certificates of compliance with the SPA’s comprehensive regulations and technical standards.

The SPA has advised that certificates must cover operators’ systems and sportsbook platforms, their integrations with third-party platforms or game providers, the games themselves, plus any studios being used for live casino games.

These certifications were also supposed to be submitted within 30 days of notification by the SPA, but industry association IBJR last week requested a later deadline of December 30 at least in the case of casino game content, citing “technical and operational challenges being faced by regulated operators”.

“Without this extension,” warned André Gelfi, IBJR president and managing partner of Betsson in Brazil, “the regulated market will be at a disadvantage as legal operators will not have all their games certified whereas the illegal market continues to operate without restrictions and outside of legal requirements.”

In response to the petition, the SPA is understood to have extended the deadline for operators to submit their certifications from registered test labs to December 29, having previously offered a longer 90-day grace period regarding one specific compliance requirement in terms of paytable displays in online casino games.

Meirelles said the extension until December 29 “provides some relief, but it is still a challenging process given the complexity and volume of work involved”.

Regardless of how many operators are approved to launch on January 1, the rollout of Brazil’s regulated online markets seems set to be a staggered one.

Only the 114 companies that applied for a licence prior to an August 20 deadline were eligible for a fast-tracked review that would enable them to go live on day one of the legal market, provided all conditions are met.

As things stand, a total of 271 applications are pending with the SPA, with the 157 later-filing applicants due to receive an answer from the regulator within 150 days of submission.