The landscape of gambling in Brazil has undergone a significant transformation. As of December 30, 2023, with the enactment of Law No. 14,790, the Brazilian government has taken a step forward in legalizing and regulating certain forms of gambling. This marks a departure from the longstanding stance where gambling was deemed mainly illegal in the country. The Ministry of Finance now authorizes and regulates fixed-odds betting operations, encompassing sports events and a variety of online games.

This shift indicates a significant development for Brazil, with a population of over 190 million, positioning it as one of the world's potentially most important markets for legal online gambling. The new regulations bring both opportunities and challenges. While online gambling has been on the rise, the introduction of these laws provides a legal framework for players in Brazil to engage in gambling activities through domestically licensed online casinos.

The move to legalize and regulate online gambling comes as a response to the outdated gambling laws, which only permitted horse racing and lotteries until now. With this change, Brazilian players can now participate in a broader range of gambling activities within their own country, under the oversight of the Brazilian Ministry of Finance, ensuring a safer and more controlled gambling environment.

Before the end of World War II, almost all forms of gambling were legal in Brazil. In 1946, the President banned casinos from operating and prohibited most forms of sports betting. The only legal forms of gambling were betting on horse races and lotteries. This was meant to combat organized crime by banning almost all types of gambling, with the Criminal Contravention Act from 1941 still active today. This has made overall gambling and sports betting illegal, and there is no change in sight in the foreseeable future. However, the state-operated CAIXA has created several types of sports betting available.

New Gambling Regulations in Brazil

On December 30, 2023, a significant shift occurred when the Brazilian President assented to Law No. 14,790, amending Law No. 13,756/2018. This law introduced the regulation of 'fixed-odds betting' about sports events and online games. The Ministry of Finance now authorizes companies to run these operations, defining online games as virtual betting platforms based on random outcomes. Companies must comply with technical requirements and pay substantial fees for operating under up to three commercial brands over five years. This marks a new era in Brazilian gambling, offering structured and legalized options for bettors.

Impact and Implementation of the New Law

The law stipulates several critical aspects, such as authorization requirements for companies, mandatory local ownership stakes, and both virtual and physical forms of betting exploitation. Additionally, operators must adhere to stringent corporate policies, including customer service standards, anti-money laundering measures, and responsible gambling initiatives. This comprehensive framework aims to regulate the gambling industry effectively, ensuring safety, transparency, and integrity in betting activities.

Furthermore, the new legislation introduces specific taxation policies for operators and bettors, with different rates applicable to gross gaming revenue and net prizes from fixed-odds and fantasy sports bets. The law also enforces players' rights by mandating clear information about the financial risks and betting conditions, alongside stringent measures against match-fixing and corruption.

Gambling Advertising Rules

The Ministry of Finance will regulate advertising and marketing related to betting to accompany the new gambling law. The aim is to encourage businesses to adopt practices of self-regulation. This will include identifying advertisements, observing age restrictions, promoting responsible gambling principles, and preventing misleading promotional content. Annex "X" of the Brazilian Self-Regulation Advertising Code has been approved by the Brazilian Council for Self-Regulation in Advertising (Conar) to supplement these rules. The focus is on consumer protection and the promotion of ethical advertising standards.

Next Steps for the Gambling Industry in Brazil

The Ministry of Finance is yet to publish detailed regulations covering the new law's provisions, including eligibility requirements and authorization procedures for interested companies. These forthcoming regulations will set the stage for companies to start the authorization process, ensuring compliance with Brazil's new legal framework for gambling.

In the 1990s, Brazil's Ministry of Finance changed its views on gambling and issued permission to take advantage of both slot and bingo machines. However, this ended in 2004, when all slot and bingo machines were outlawed due to the government's involvement in bribery. Due to the lack of clear regulations, slot machines and bingo games are currently only permitted to operate in territories where the legality of gambling is ambiguous. This has resulted in significant pressure on the entire gambling industry, as the uncertain legal landscape makes it difficult for businesses to operate and for players to enjoy their favorite games with peace of mind. The absence of clear guidelines has also created a challenging environment for regulators, who must balance clients' security with the desire to promote economic growth in the gambling sector. Overall, the current situation has created a complex and often confusing landscape for all involved in the gambling industry.

The Criminal Contravention Act of 1941, designed to prohibit and penalize games of chance, serves to make games of chance punishable by imprisonment if they are carried out in public places. This was meant to make gambling somewhat safer but has outlawed all types of gambling because it only allowed horse races and lotteries to operate legally. Brazilian players looking to play online safely should stick to properly regulated and well-established international online casinos.