A brothel is a bar, nightclub or hotel where sex workers are found. People go there to buy sex for money. Different countries have different regulations as to sex work.

Legality
Some countries where prostitution is legal allow it to happen in a brothel, others allow it to happen "on the street", still others allow both forms. Generally, sex work in a brothel is seen as safer for the worker than sex work on the street. 

In some countries operating brothels is legal, in other countries it is illegal. Examples of countries where brothels are illegal are Canada and most of the United States. Brothels are legal in some countries from Europe, for example. A country which has permissive laws regarding sex work is the Netherlands. Laws can be unclear on whether brothels with sexbots are legal or not.

Most of the time, where legal, brothels need to be registered like other businesses. However even if it is legal to run a brothel, there may still be conflicts with the law. Examples of problem cases are:
The sex workers do not have a work permit (the right to work in a country)
The sex workers are too young (underage)
The sex workers are dependent on the people who run the brothel, or on so called pimps

History

Brothels have been known for most of recorded history. At first there was temple prostitution in many Mediterranean and Middle Eastern countries. 
In  Ancient Greece and Roman civilizations, brothels were established. Sometimes they were licensed institutions. This was first  recorded in Athens in 594 BC. Public sources of the time said it was good that Solon installed the brothel. People said this would reduce the problems caused by sexually unfulfilled  sailors and workers. It would also fill money into the public purse. This first official brothel was soon followed by many others, and also influenced the creation of special schools in which various classes of prostitutes (from slavegirls to future courtesans) were trained for their profession. In 2017, a brothel was opened with sexbots instead of human workers.

Business models

Brothels use a variety of business models:

In some, sex workers are held like slaves without the option to leave. They only get a small portion (or none) of the money paid by the patron. This is typical where human trafficking procures a large percentage of sex workers. It is common in those countries where sex work is forbidden or repressed. In some cases, sex workers are bought and sold by their keepers, making them slaves. All of this is illegal in most countries.
In others the workers are employees. They receive a small fixed salary and a portion of the money spent by the customer. (Maison close French for "closed house")
In still others, the workers pay a fee for use of the facilities. The brothel owner is not involved in the financial transaction between the sex worker and their client, they simply rent rooms to the workers. (Maison de passe, French for "trick house")

The third option (the brothel owner renting space and facilities to sex workers) gives some way for the brothel owner to say they did not know what is going on. This is especially the case where sex work is forbidden or restricted. Brothel owners often disguise their actions as running a massage parlor, a bar or a similar venue. 

Allowing such places (while forbidding se work) can also give politicians a way to save face when they do not want to put laws against sex work into practice.

References

Prostitution
Entertainment venues