Last Friday (26), the Brazilian Ministry of Finance published Ordinance No. 1,330 (“Ordinance”).
The Ordinance addresses the general conditions for the commercial operation of the fixed-odds betting lottery modality in Brazil and regulates general rules regarding the rights and obligations of the bettor, money laundering prevention and other offenses, responsible gambling, and prior expression of interest.
This is an important step in regulating betting in Brazil. You can find below the current regulatory landscape and the key Ordinance information.
/ regulatory landscape
Currently, we have the following rules and projects regarding betting, in addition to Ordinance No. 1,330:
1. Law No. 13,756/2018: it creates, in its article 29, paragraph one, the fixed-odds betting lottery type. This law only authorizes bets related to real sports-themed events, where it is determined, at the time of placing the bet, how much the bettor can win in case of a correct forecast.
2. Provisional Measure No. 1,182/2023: effective until November 21, 2023, it amends Law No. 13,756/2018 to regulate the operation of the fixed-odds betting lottery by the Federal Government. You can find its main aspects here.
3. Bill No. 3,626/2023: it also regulates Law No. 13,756/2018. The Chamber of Deputies approved it on September 13, 2023, and it is currently under consideration in the Federal Senate, which is expected to vote on it by November 11, 2023.
4. Self-regulation: The Brazilian National Council for Self-Regulation in Advertising (“Conar”) formed a working group in August 2023 to develop an exhibit of the Brazilian Self-regulation Advertising Code on betting advertising, which has not yet been published. Self-regulation by Conar, in addition to official regulation, is explicitly encouraged in Law No. 13,756/2018, Provisional Measure No. 1,182/2023, and the Ordinance.
/ key points from the Ordinance
1. when the Ordinance becomes effective: October 27, 2023.
2. to whom the obligations of the Ordinance apply: all companies that commercially operate the fixed-odds betting lottery type within Brazil (Article 2).
3. requirements for the commercial operation of this activity: a grant of authorization issued by the Ministry of Finance is required for the commercial operation of fixed-odds betting in Brazil, without prejudice to other conditions to be determined in regulations yet to be created on the subject (Article 2 and Article 5, paragraph two).
4. who can apply for authorization to operate the fixed-odds betting lottery type: national or foreign legal entities that are duly established in Brazil and meet all the requirements of Law No. 13,756/2018, the Ordinance, and other current legal and regulatory norms (Article 5). The Ordinance also lists who cannot apply for authorization (Article 7), which should be read in conjunction with Article 5.
5. rights of bettors: the Ordinance outlines bettors’ rights in addition to other applicable regulations (e.g., the Brazilian Consumer Protection Code). These rights include receiving adequate, safe, quality service, and receiving information to defend their rights and interests (e.g., the odds established for each bet, Article 10, I), as well as obtaining and using the service with freedom of choice (Article 9, I to III).
6. money laundering prevention and other offenses: to operate this commercial activity, measures must be taken to monitor risks related to potential involvement in money laundering, terrorism financing, and the proliferation of weapons of mass destruction (Article 13).
The Ordinance mentions some examples, such as the presentation of a money laundering prevention policy (Article 13, sole paragraph) and the obligation to report suspicious transactions to the Brazilian Financial Control Council (Article 12).
7. responsible gambling: operators must develop measures to prevent compulsive or pathological gambling disorder and indebtedness, as well as to protect vulnerable individuals, especially minors and the elderly (Article 14). In addition, they should promote informative and preventive actions to raise awareness among bettors about compulsive or pathological gambling disorders (Article 17). Other established measures include, for example, the possibility for the bettor to set a daily time or betting limit (Article 18, I).
8. advertising: the Ordinance stipulates that advertising for fixed-odds betting should be guided by social responsibility and the promotion of awareness of responsible gambling while observing collective safety and combating illegal betting.
Regarding content and dissemination, considering that the topic was already broadly regulated in other norms issued regarding fixed-odds betting, there are some new obligations (Article 21 and its subsections), for example:
a. advertisements for fixed-odds betting cannot be displayed in schools and universities;
b. advertisements must contain an age restriction notice (e.g., “18+”), in addition to the warning clause “gamble responsibly” (or a similar one) (Article 23);
c. advertisements promoting the use of the product to recover losses from previous bets or other financial losses are prohibited.
Given the territorial scope of the grants, the Ordinance also prohibits operators authorized to operate fixed-odds betting exclusively within the States and the Federal District from advertising in nationally broadcast sporting competitions (Article 25).Parte superior do formulário
9. prior expression of interest:
a. what is it: legal entities interested in obtaining authorization to commercially operate fixed-odds betting in the national territory may submit a prior expression of interest to the Ministry of Finance. Those who do so will have priority in the evaluation of their requests for authorization to operate fixed-odds betting when the application period opens (Articles 26 and 29). Exhibit I of the Ordinance provides a model for submitting this expression of interest.
b. when to submit: within a period of up to 30 days, starting from October 27, 2023 (Article 26).
c. prior expression vs. prior authorization: submitting a prior expression of interest does not constitute prior authorization to operate the fixed-odds betting lottery. This expression also does not bind the company (Article 28).
/ next steps
There are still other regulations pending publication on this subject. Therefore, it is advisable to stay informed and plan accordingly as information and operational requirements become available to the public.
