Brazil has taken a significant step forward in the world of gambling and sports betting with the enactment of a groundbreaking law. On December 30, 2023, the Brazilian President signed into law Bill No. 14,790, which amended the existing Law No. 13,756/2018 to regulate ‘fixed-odds betting’ in the country. This move marks a substantial shift in the gambling landscape of Brazil, opening up opportunities for both operators and enthusiasts alike.
A New Era of Betting
The new law paves the way for Brazil’s casinos to operate fixed-odds betting, focusing on sports events and online games, but with a catch – they must obtain authorization from the Ministry of Finance. This authorization is a crucial step, ensuring that only legitimate and trustworthy operators enter the Brazilian market.
Online games, as defined by the law, encompass electronic platforms that allow virtual betting on games whose outcomes are determined by the random generation of numbers, symbols, figures, or objects outlined in the game’s rules. This broad definition encompasses a wide range of gaming possibilities, offering diverse options for enthusiasts.
Key Highlights of the Law
While the Ministry of Finance is yet to issue specific regulations regarding authorization requirements, certain key aspects are already in place. Interested companies seeking authorization must demonstrate their knowledge and experience in running games, bets, or lotteries, in addition to meeting technical and cybersecurity prerequisites. These stringent measures are essential to ensure the integrity of the betting industry.
One distinctive feature of the law is that operators must have a Brazilian party as a shareholder, holding at least 20% of the legal entity’s share capital. This provision aims to encourage local participation and investment in the industry.
Forms of Exploitation
Operators can choose to offer either virtual or physical betting operations. The Ministry of Finance will determine whether each operator can conduct both types of operations or only one of them, allowing flexibility within the industry.
Operators must implement a range of policies, procedures, and internal controls covering various aspects of their operations. These include customer services, anti-money laundering measures, responsible gambling, and integrity checks to prevent match-fixing and fraud. These policies are crucial to maintain transparency and safeguard players’ interests.
Operators will face a 12% tax rate on their gross gaming revenue, in addition to regular corporate taxes. Bettors themselves will be subject to a 15% tax on net prizes obtained from fixed-odds and fantasy sports bets.
The law places a strong emphasis on protecting players’ rights. It mandates that players receive clear information about the financial risks involved in betting and pathological gambling. Operators are prohibited from using ambiguous or misleading language during the betting process, promoting responsible gambling practices.
Match Fixing and Corruption
Any bets proven to have originated from match-fixing or corruption related to sporting events will be declared null and void, demonstrating Brazil’s commitment to fair play.
Payments and Inspection
Operators will be charged a monthly inspection fee based on their net revenue. Additionally, payment arrangement issuers and financial institutions are prohibited from facilitating transactions with unauthorized operators, contributing to the industry’s overall security.
The new law also addresses the crucial issue of gambling advertising. The Ministry of Finance will regulate advertising and marketing activities, but companies are encouraged to self-regulate. These regulations include clear identification of advertisements, protection of minors, responsible gambling principles, and warning clauses.
The Brazilian Council for Self-Regulation in Advertising (Conar) has played a pivotal role in shaping these rules, aiming to ensure a responsible and ethical approach to gambling advertising.
The Road Ahead
For interested companies looking to enter the Brazilian gambling market, there is still work to be done. The Ministry of Finance must publish regulations covering eligibility requirements and authorization procedures. Additionally, existing companies in the industry will be given at least six months to comply with the new rules.
Brazil’s new gambling law represents a significant turning point for the country’s betting industry. With its comprehensive regulations and commitment to responsible gambling, Brazil is set to become a prominent player in the global gambling arena. As the industry continues to evolve, it remains to be seen how these new laws will shape the future of betting in Brazil.