INSIGHT BRAZIL MARKET MATTOS FILHO SÃO PAULO
Fabio F Kujawski Partner Mattos Filho São Paulo
Isabela Fernandes Pereira Senior Associate Mattos Filho São Paulo
Mattos Filho is a law firm covering various sectors including gambling. This Insight has been written by Fabio F Kujawski and Isabela Fernandes Pereira, Partner and Senior Associate at Mattos Filho São Paulo.
www.mattosfilho.com.br/ kujawski@mattosfilho.com.br
Brazil has traditionally adopted a conservative stance on betting. However, recent legal developments have opened new opportunities for the sector in the country, which confirms Brazil as one of the most attractive markets for the global betting industry.
Offering games of chance in Brazil was prohibited in 1941. According to the Misdemeanors Act (Law Decree No. 3,688/1941), games of chance include (i) games in which the result (win or loss) depends exclusively or mainly on the player’s luck, rather than on the player’s skills; (ii) horse racing in non-official places; (iii) betting on other kinds of sports. Terefore, for many decades, the exploitation of betting or any other game that relied mainly on luck was prohibited in Brazil.
In 2018, Law No. 13,756 was enacted to legalise the exploitation of fixed-odds sports betting, which is a game modality in which players know the amount they can win before placing the bet. Only companies authorised by the Ministry of Finance can lawfully explore this activity in the country, but further regulation on the licensing procedure was necessary to supplement the Law. Initially, the regulations should have been approved by 2022, but the former president did not prompt to regulate the activity due to political pressures from certain religious groups that were adversarial to liberalising any games of chance in the country.
Passing the law in 2018 but not regulating it meant an impressive grey market flourished in Brazil with hundreds of operators offering the service to Brazil from offshore companies. Te operators also engaged in relevant marketing and sponsorship activities (mainly focused on soccer clubs and soccer championships), at local, regional and national levels.
In 2022, Brazil was leading the internet traffic to sports betting websites, representing 22 per cent of the worldwide traffic . Tis shows the
Passing the law in 2018 but not
regulating it meant an impressive grey market flourished in Brazil with hundreds of operators
offering the service to Brazil from offshore companies. The operators also engaged in relevant marketing and
sponsorship activities (mainly focused on soccer clubs and soccer championships).
importance of Brazil as one of the most – if not the most – relevant country in the world for sports betting operators.
In 2023, the newly elected president resumed the discussion on liberalising sports betting. In December 2023, Law No. 14,790 was enacted to reaffirm the lawfulness of fixed-odds sports betting and to expand the original scope to allow bets on online games. Te Ministry of Finance shall publish the regulation to allow companies to actually apply for a sports betting license no later than the second quarter of 2024, based on the government predictions.
In accordance with current regulations, companies will be able to apply for authorisation to exploit fixed-odds betting on sports events or online games, which are defined as "an electronic channel that enables virtual betting on a game whose result is determined by the outcome of a future event based on the random generation of numbers, symbols, figures or objects defined in the game's rules". Bets can be virtual (i.e., accessed via electronic channels) or physical (i.e., printed betting slips) for sports betting. Te authorisation will have a cost of up to R$30 million (US$ 6 million) in fees for the privilege of using up to three commercial brands over a five year term licence.
Companies applying for authorisation must demonstrate proven knowledge and experience in running games, bets, or lotteries, as well as meet several requirements, including technical and cybersecurity standards and minimum service capacity.
Operators must implement certain policies, procedures, and internal controls to be eligible to obtain (and maintain) the authorisation. Tese policies, procedures, and controls relate to customer support services; the prevention of money laundering, financing of terrorism, and the proliferation of weapons of mass destruction; responsible gambling; and betting integrity and the prevention of match-fixing.
In 2023, the newly elected president resumed the discussion on liberalising sports betting. In December 2023, Law No. 14,790 was
enacted to reaffirm the lawfulness of fixed-odds sports betting and to expand the original scope to allow bets on online games. The Ministry of Finance shall publish the regulation to allow companies to actually apply for a sports betting license no later than the second quarter of 2024, based on the government predictions.
WIRE / PULSE / INSIGHT / REPORTS P89
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