Brazil: Gambling Law

Gambling is not a legal concept in accordance with Brazilian law. In fact, gambling doesn’t even have a perfect translation in Portuguese.

We can say that it can mean a bet or a game, involving a consideration, a prize and a chance. “Game” is defined as a type of contract in which two or more people have a particular promise (usually with pecuniary content) in favour of the person who achieves a favourable result in performing an act in which the parties actively participate. It is worth clarifying that the game necessarily depends on the performance of each part (called “player”), whether for its intelligence, skill, strength or pure chance.

“Bet” is defined as another type of contract, it would be a legal transaction in which two or more people with different opinions about a given event promise to perform a certain action (usually with pecuniary content) for the benefit of the party whose opinion prevails. Therefore, in the bet, there is No. requirement for the active participation of any party (called “bettor”) to influence the outcome of the event, but only the expression of a personal opinion.

The subtle difference between a “game” and a “bet” is that the outcome of a game will depend on the action of the parties, while the outcome of a bet depends on facts unrelated to the will of the parties.

Brazilian law, in the absence of a literal translation into “gambling”, works with the concept of “games of chance”. Since the general ban on gambling in 1941, the only legal gambling activities are lotteries under the state monopoly and horse racing betting. According to Brazilian jurisprudence, poker is considered a game of skill and therefore not illegal.

There are now several bills under discussion in Congress, comprising integrated resort casinos, bingos, online games and lotteries.

The general gambling prohibition is set forth by the Brazilian Criminal Misdemeanour Act (Decree-Law No. 3.688/1941), drafted with the intention of preserving social morality. It provides in Article 50 for the prohibition of “gambling,” punishable by imprisonment from three months to one year, and a fine for those who establish or perform gambling in a place or public place accessible to the public through the payment of an entrance fee or otherwise. There are three definitions of “games of chance”:

• a game in which winnings and losses depend solely or mainly on chance;
• betting on horse racing outside a racetrack or where they are authorized; and
• bet on any other sports competition.

‘Caixa Econômica Federal’ operates the federal lottery and is regulated by several laws and decrees, mainly:

• Decree-Law No. 6,259/1944: provides for the lottery service and other measures;
• Decree-Law No. 204/1967: provides for the operation of lotteries and other arrangements;
• Law No. 6,717/1979: authorizes the modality of the federal lottery governed by Decree-Law No. 204/1967 and other measures;
• Law No. 11,345/2006: provides for the establishment of a lottery modality for the development of sports practice, the participation of soccer sports entities in this contest, and the installment of tax debts, besides amending Laws Nos. 8,212/1991 and 10,522/2002 (and other provisions); and
• Decree No. 6,187/2007: regulates Law No. 11,345/2006 and establishes the lottery modality called TimeMania.

The instant lottery LOTEX was created by Law No. 13,155/2015, was amended by Law No. 13,756/2018 and is regulated by Decree No. 9,327/2018. Horse race betting is regulated by Law No. 7,291/1984 and Decree No. 96,993/1988.

Fixed-odds sports betting was legalized by Law No. 13,756/2018, recently amended by Law 14,183/2021 to better quantify taxation in reasonable terms. The modality was included in the Program of Partnerships and Investments for privatizations by Decree No. 10,467/2020.

Law No. 14,455/2022 authorized the Federal Executive Power to create the Health and Tourism Lotteries.

For many years the competence to regulate was of Caixa Econômica Federal. In mid-2018, it was transferred to SEFEL – Secretariat of Tax, Energy and Lottery Monitoring, which was later integrated into SECAP – Secretariat of Evaluation, Planning, Energy and Lottery.

In 2022, several changes have taken place on the subject of betting at the Ministry of Economy. The theme was dealt with within the Special Secretariat for the Treasury and Budget (SETO) within the SECAP. In August, the topic of betting was transferred to SEPEC – Special Secretariat for Productivity and Competitiveness, which now has the Undersecretariat for Special Affairs, Lottery, and of Export Processing. On the other hand, the Secretariat for Evaluation, Planning, Energy, and Lottery, at SETO, no longer exists.

The most recent change that took place was the change of the name of the Undersecretary of Specials, Lottery, and Export Processing Zones, which became the Undersecretary of Bets and Commercial Promotion.

Poker, recognized as a sport by the former Ministry of Sports (currently a division of the Ministry of Citizenship), is not regulated. Neither are social games nor any other kind of games of skill.

The free distribution of prizes is regulated by the Ministry of Economy and is subject to Caixa’s previous authorization or the Secretariat, depending on the operator.

Lotteries in Brazil are regulated by Decree-Law No. 204/1967, which accompanies numerous regulations and more specific decrees. From the outset, it is clear that the exploitation is exclusive to the Union:

“Art 1. The exploitation of lottery, as an exceptional derogation from the rules of Criminal Law, constitutes an exclusive public service of the Union not eligible for a concession and will only be permitted under this Decree-Law.

Single paragraph. The net income obtained from the operation of the lottery service will be mandatorily destined to social and medical care applications, undertakings of the public interest.”

That is, only the Federal Government and state governments can somehow exploit the lottery and the betting. In addition, the law is clear from the outset as to which federal body assumes this role on behalf of the Union:

“Art 2. The Federal Lottery, of circulation, throughout the national territory, constitutes a service of the Union, executed by the Superior Council of Federal Savings Funds, through the Administration of the Federal Lottery Service, with the collaboration of the Federal Savings Funds.”

In our legal system, there was no provision for the regulation of sports betting. However, in December 2018, still with Michel Temer in the Presidency of the Republic, Law No. 13.756/18 was approved. This law regulates sports betting in Brazil by fixed quota. In this category, the bettor knows, from the beginning, how much he can profit. The regularization decree is expected to be published by November 2022.

On 30 September 2020, the Brazilian Federal Supreme Court ruled unconstitutional the federal monopoly on lottery operations. As a result, States were found to have the right to operate all the exact same lottery modalities created by federal law. The federal government retains the exclusive constitutional competence to legislate on lottery issues, while the States and the Union share the right to operate the games.

This last ruling directly impacts sports betting, which was created as a lottery modality by Law No. 13,756/2018. Once States (and even Municipalities) are fully capable of regulating lottery modalities already authorized by the Union, they will be able to run and execute them.

There are no licenses available at the moment.

All games of chance are currently forbidden under article 50 of the Brazilian Criminal Misdemeanour Act. It includes casinos, online casinos, bingos, and sweepstakes.

The Brazilian Criminal Misdemeanour Act, drafted with the intention of preserving social morality, provides in Article 50 the prohibition of “gambling,” punishable by imprisonment from three months to one year and a fine for those who establish or perform gambling in a place or public place accessible to the public, through the payment of an entrance fee or otherwise. There are three definitions of “games of chance”:

• games in which winning or losing depends exclusively or predominantly on chance;
• betting on horse racing outside a racetrack or where they are authorised; and
• betting on any other sports competition.

There is no license available for sports betting yet. Land-based casinos, online casinos, bingos, and other gaming modalities are still prohibited under article 50 of the Brazilian Criminal Misdemeanour Act. In most cases, licensing for state or municipal lottery licenses are based on a concession model, where the highest bidder will have the right to operate the lottery games for a given period. Requirements are defined by the tender invitation.

There is no such requirement in the current regulation.

The legal definition of advertising is set forth by Article 2 of Decree No. 57,690/1966 as any paid form of dissemination of ideas, merchandise, products or services by an identified advertiser. Both Decrees Nos. 57,690/1966 and 4,563/2002 regulate advertising in Brazil and, according to the latter, all advertisements in Brazil must comply with the rules set forth by the Standard Rules Executive Council (CENP). This council is responsible for regulating the commercial relations between advertisers and agencies, while the National Council for Advertising Self-Regulation (CONAR) is responsible for ensuring ethics in an advertising content.

Both CENP and CONAR are non-governmental organisations comprised of members of the advertising industry and define their own statutes and codes. CONAR’s Self-Regulation Code also includes a specific rule, according to which, advertisement contents must not “induce criminal or illegal activities”.

Currently, the only criminal provision regarding gambling advertising is the prohibition to promote illegal lotteries, established by Article 51 of the Brazilian Criminal Misdemeanour Act.

CONAR’s restrictions on gambling advrtising have been based on the rule set forth by Article 21 of CONAR’s Self-Regulation Code, according to which, advertisement content must not induce criminal or illegal activities, or encourage, stimulate or incite such activities.

No advertisement shall:

• encourage or stimulate any type of offence or racial, social, political, religious or national discrimination;
• contain statements or visual or audio presentations that may offend the decency standards of the audience it intends to reach;
• exploit the consumer’s credulity, lack of knowledge or inexperience;
• cause fear without a relevant social reason; or
• exploit any type of superstition.

Article 50 of CONAR’s Self-Regulation Code states that violators of the rules established in that Code are subject to the following penalties:

• a warning in writing;
• a recommendation to modify or correct the advertisement;
• a recommendation to the vehicle to suspend the broadcasting of the advertisement; and
• a public disclosure of CONAR’s opinion as regards the advertiser, the agency and the vehicle for non-compliance with the measures so recommended.

Since sports betting is no longer illegal, even before the issuance of the licences, international operators are advertising in Brazil and sponsoring soccer teams.

During the fixed-odds sports betting regulation process, it is expected that a new criminal provision will be established to penalise advertising of unlicensed operators.

Recently, the National Consumer Secretariat (Senacon), an agency of the Ministry of Justice and Public Security (MJSP), opened war against the performance of sports betting sites in Brazil. According to Senacon, these companies are working without legal authorization, without any type of supervision and causing damage to consumers.

They said: “The activity has been explored without proper authorization and without any control, inspection or accountability mechanism, since there is still no regulation required by law, including no rules that mitigate damage to gamblers/consumers, which may, in thesis, to be violating basic consumer rights”.

“With the ostensible publicity with which these companies have been operating in the country, the number of participants in this market, which is already exponential, will increase even more and, consequently, the probability of financial crimes and false high-profit offers in will increase, generating enormous economic damage to society”, justified the Ministry of Justice, which also added: “It is, therefore, up to Senacon to prevent, investigate and repress violations of consumer protection rules, including those related to abusive advertising”.

The Chamber of Deputies decided to update the Pelé Law, concentrating in a single diploma all the rules that seek to regulate sports practice in the country, from Bill of Law No. 1.153/2019, authored by Senator Veneziano Vital do Rêgo (MDB-PB), creating the new “General Sports Law” (LGE). Nine proposals that were being processed in the House on the subject were added to the project. Among other changes, the bill includes the determination that operators of fixed-quota lotteries without headquarters in Brazil will no longer be able to advertise in the country.

The bill was approved by the House of Representatives and, as it has undergone changes, it will return to the Senate for analysis.

There is no regulation on marketing affiliates.

Article 50 of the Brazilian Criminal Misdemeanour Act establishes that the operation of games of chance in a public place or in a place available to the public is subject to imprisonment for between three months and one year, and a fine. As referred above, there are three definitions of “games of chance”:

• games in which winning or losing depends exclusively or predominantly on chance;
• betting on horse racing outside a racetrack or where they are authorised; and
• betting on any other sports competition.

“Public place” includes:

• a private house in which games of chance are held, in which usual players or participants are not members of the family at the dwelling;
• hotels or collective residences where guests or residents are offered games of chance;
• headquarters or premises of a company or association where games of chance are held; and
• establishments that aim to operate games of chance, even if their purpose is disguised.

Games of chance are treated as misdemeanours, which are recognised by law as offences punishable by minor penalties (Article 61 of Law No. 9,099/1995). In other words, a misdemeanour is a lesser offensive crime when compared to a criminal violation of Brazilian law. The term “misdemeanour” is related to setting out “public morality”, which includes “safeguarding morality” in order to “prevent certain illegal and vicious acts, or defend certain moral sentiments regarded as indispensable to harmonious social coexistence, the effects of which are harmful to the interests of the collectivity”.

Contrary to this, “skill-based games” are those in which the results depend on the ability of the player more than on luck. It is the case with poker, for instance, and these games are legal in Brazil.

Furthermore, regarding the advertisement of foreign lotters, Article 54 of the Brazilian Criminal Misdemeanour Act establishes that it is forbidden “to display or have under your custody a foreign lottery draw list”. The penalty is the imprisonment, from one to three months, and a fine.

In addition, Article 57 specifically deals with the announcement of lottery results and establishes that it is forbidden “to disclose, through a newspaper or other printed matter, radio, cinema, or in any other way, even if in disguise, an advertisement, notice or extraction result of a lottery, where the circulation of its tickets would not be legal”, being such conduct punishable by a fine.

Not applicable.

Law No. 9,613/1998, as amended by Law No. 12,683/2012, defines the AML legal framework in Brazil. Pursuant to Article 1, money laundering under Brazilian legislation is the act of hiding or disguising the nature, origin, location, disposition, remittance or ownership of property, goods, rights or values arising directly or indirectly from a criminal offence. This law created the Conselho de Controle de Atividades Financeiras (COAF), the regulatory body in charge of pursuing, investigating and sanctioning any activity related to money laundering crimes. COAF issues directives to regulate activities of industries that may facilitate money laundering, such as gambling.

Ministry of Finance Ruling GM/MF No. 537/2013 establishes procedures to be adopted by entities that distribute money or goods through the operation of lotteries, for the purpose of preventing money laundering and the financing of terrorism. All prize-winners must be identified, and all prizes recorded, including prize description, related amounts, handover dates, as well as the winners’ name, identification document and personal address.

For the purpose of preventing money laundering and the financing of terrorism, Ministry of Finance Ordinance GM/MF No. 537/2013 establishes that entities that distribute money or goods through the operation of lotteries shall pay special attention to serious suspicions of crimes defined in Law No. 9,613/1998, as amended, and communicate suspicious transactions to COAF, such as:

• ticket sales, the acceptance of bets or payment of prizes per decentralised units, per products and on a consolidated basis, in an accumulated amount or frequency considered unjustified in terms of the location, frequency, quantity or value;
• the payment of a prize involving a person domiciled in a jurisdiction considered, by the Financial Action Task Force (FATF), as high risk or characterised by strategic deficiencies in preventing and combating money laundering and the financing of terrorism, or in countries or dependencies qualified, by the Federal Revenue Service of Brazil (RFB), as a favoured taxation or privileged tax regime;
• the payment of more than one prize to the same person;
• the payment of a prize based on the maximum allowed bet for the game type;
• resistance by the client or others involved to provide information, or the provision of false information, or difficult or onerous verification, to identify the client or register the operation; and
• acts of the client or others involved to induce the non-compliance of records requirement established by the legislation to prevent money laundering and terrorist financing. Regardless of analysis or any other consideration, the following operations or proposed operations must be communicated to COAF;
• payment of a prize, in cash, of BRL10,000.00 or more, in any type of game;
• payment of a prize, by means of a cheque issued to the bearer, of an amount equal to or greater than BRL10,000.00, in any type of game; and
• any case involving terrorism or terrorism suspicions.

If the operator does not communicate any suspicious transaction to COAF during the calendar year, it must issue a negative certification to SECAP by January 31 of the following year, confirming there was no occurrence in the previous year.

Based on public statements made by SECAP for fixed-odds sports betting, players shall be identified by their taxpayer number (CPF) to play either online or at land-based shops. Operators of fixed-odds betting lotteries ought to disclose to the regulating authorities all data:

• collected, held, obtained or produced by an association, entity, body or organisation operating internationally that consolidates inputs for the analysis, prohibition, detection, inhibition or prevention of irregularities in the operation of lotteries and for the payouts or suspicious activities that may compromise the integrity of a sports event;
• related to the certification of physical equipment (hardware) and computer programs (software) used by the operator; and
• concerning the validation of each bet attracted by the operator.

The regulator shall require unrestricted access, including in real-time, to the systems used to share such information. This is to be confirmed or changed after BNDES finishes the studies necessary for the definition of the economic model.

In the unofficial version of Decree that regulates the fixed-odds lottery (as required by Article 29 of Law No. 13,756/2018) made available to the media, Chapter V, Section I sets forth the specific rules for Responsible Gaming and Betting Integrity:

Article 12. The operator, in the operation of the fixed-odds lottery, in physical or virtual environment, must promote informative and preventive actions to raise awareness of gamblers and to prevent pathological gambling disorder, through the elaboration of codes of conduct and dissemination of good practices.

Single paragraph. The operator, for the purposes of the provisions of the caput, must:

I – promote the practice of responsible gambling and disclose the necessary information to players, prior to the start of the lottery activity;

II – obtain international certifications on responsible gaming, when required by regulatory act;

III – adopt measures to ensure the prevention of gambling disorders and the protection of vulnerable people, minors and the elderly;

IV – prevent fraud attempts and adopt the applicable treatment measures, when applicable, with due referral of the occurrence to the competent authority;

V – prevent the placing of fixed-odds bets on real sports-themed events that exclusively involve the participation of minors;

VI – prepare a monthly technical report, to be sent to the regulator, detailing the fraud attempts identified and the prevention measures adopted;

VII – implement a communication policy for bettors, containing information on responsible gambling and the dangers of gambling addiction, which must be made available on the operator’s website;

VIII – indicate the channels for complaints, which must be accessible to bettors on the operator’s website;

IX – develop and implement a training program for managers, employees, service providers and resellers, with the objective of enabling them to promote responsible gambling within the scope of the activity of operating the fixed-odds lottery; and

X – issue guidelines so that the development of lottery products and remote channels, as well as communication, advertising and marketing actions, incorporate measures related to the promotion of responsible gambling.

Article 13. The operator must adopt security and integrity mechanisms when placing fixed-odds bets.

Paragraph 1. Sporting events subject to bets must have actions to mitigate results manipulation and corruption in real sporting events, by the operator of fixed-odds bets, in compliance with the provisions of art. 41-C, art. 41-D and art. 41-E, of Law No. 10,671, of 15 May, 2003.

Paragraph 2. The operator must prove to the Ministry of Economy, prior to the start of the commercialization of bets, that it is part of or has a contractual relationship with international bodies for monitoring sports integrity.

Not applicable.

Not applicable.

Tax Rate by Sector

All gambling companies in Brazil are subject to the levy of corporate income tax (IRPJ) and social contribution on net profit (CSLL) at a combined general rate of 34%. The IRPJ rate is 15%, and a 10% surcharge applies to taxable income exceeding BRL240,000.00 per year. CSLL is due at a rate of 9%.

The effective tax rate may vary according to the system elected by the Brazilian legal entity to calculate IRPJ and CSLL (actual profit system or deemed profit system). Companies with total revenues greater than BRL78 million in the previous year are automatically subject to the actual profit system.

• Actual profits system: the tax basis is determined based on the accounting net profit, adjusted in accordance with the addition of non-deductible expenses and the exclusion of certain amounts. The Programme of Social Integration (PIS) and Contribution for the Financing of Social Security (COFINS) are taxed under the non-cumulative method, at the rates of 1.65% and 7.6% respectively, allowing credits from acquisitions;
• Deemed profits system: the tax basis for services is 32% on the company’s gross revenues, on an accrual or cash basis. PIS and COFINS are taxed under the cumulative method, at the rates of 0.65% and 3% respectively, not allowing credits.

Besides the ordinary corporate taxes, gambling companies’ activities are also subject to the following taxes:

Instant Lottery – LOTEX

• Taxation on the operator: the LOTEX operator’s gross revenue is 18.3% of the total sales. This is the tax basis for PIS (1.65%), COFINS (7.6%) and Municipal Service Tax (ISS) (2% to 5%);
• Taxation on players’ winnings: lottery cash prizes that exceed the value of the first tier of the Individual Income Tax monthly rate table (BRL1,903.98) are subject to income tax withholding at a rate of 30%, as set forth in Article 732, I, of Decree No. 9,580/2018 and Article 56 of Law No. 11,941/2009. Prizes in goods and services are subject to income tax withholding at a rate of 20%, as set forth in Article 733 of Decree No. 9,580/2018.

Horse Race Betting

• Taxation on horsemen’s winnings: prizes paid to horsemen, breeders and jockeys are subject to income tax withholding at a rate of 15%, as set forth in Article 737 of Decree No. 9,580/2018;
• Taxation on players’ winnings: bettors’ prizes are subject to income tax withholding at a rate of 30%, as set forth in Article 732, II, of Decree No. 9,580/2018.

Sports Betting

• Taxation on the operator: Law No. 13,756/2018 established that 3% of the total online handle/turnover and 6% of the total land-based handle/turnover must be paid to public funds, social security and sports entities.

After the first public consultation held by SECAP in July 2019, it became clear for the regulator that those tax burdens were excessive. As result, the draft decree published by SECAP during the second and third public consultations proposed a different tax structure, with a flat rate of 1% on handle/turnover for both land-based and online operations. This proposal was abandoned by the regulator and Law No. 14,123/2021 changed the taxation to:

Poker

Taxation on the operator:

• Tournaments: the operator’s gross revenue is the total of the tournament’s entry fees minus the amount separated for the prize pool. This is the tax basis for PIS (0.65% or 1.65%), COFINS (3% or 7.6%) and ISS (2% to 5%);
• Ring games: the operator’s gross revenue is the rake collected in each hand. This is the tax basis for PIS (0.65% or 1.65%), COFINS (3% or 7.6%) and ISS (2% to 5%).

Taxation on players’ winnings: according to the Brazilian Revenue Service, when the prize depends on the performance of the participants, it is deemed as remuneration for the work, regardless of whether the prizes are paid in cash or in the form of goods and services. Therefore, if the prize is paid by a Brazilian legal entity to an individual fiscally resident in Brazil, it will be subject to personal income tax withholding calculated based on the following progressive tax rates (in Brazilian reais):

• from BRL0.00 up to BRL1,903.98: Income Tax Exemption (no deductible amount);
• from BRL1,903.99 up to BRL2,826.65: 7.5% Withholding Tax (BRL142.80 deductible);
• from BRL2,826.66 up to BRL3,751.05: 15% Withholding Tax (BRL354.80 deductible);
• from BRL3,751.06 up to BRL4,664.68: 22.5% Withholding Tax (BRL636.13 deductible); and
• from BRL4,664.69 and above: 27.5% Withholding Tax (BRL869.36 deductible).

Bill of Law No. 442/1991 was approved in February 2022 by the Chamber of Deputies and is waiting to be voted by the Senate. It is expected to be voted until the end of 2022, after the presidential elections. According to the approved draft, gambling modalities thereby are not considered a public service such as lotteries but rather a typical economic activity and include:

Casino

According to the current text, casinos may be installed in resorts as part of integrated resorts structures and must contain at least 100 high-end hotel rooms, meeting and event venues, restaurants, bars and shopping centers.

The physical space of the casino must be at most equal to 20% of the complex’s built-up area, with the possibility of hosting electronic games, roulette, card games and other authorized modalities.

In order to determine specific locations of casinos, the Executive Branch shall consider the existence of tourist heritage and the economic and social potential of the region.

The number of casinos will be calculated by State, according to the State’s population as it follows:

• 3 (three) casinos for states with population over 25 million (only São Paulo, according to official data);
• 2 (two) casinos for states with more than 15 million and up to 25 million people (like Minas Gerais and Rio de Janeiro);
• 1 (one) casino for states with population of up to 15 million and the Distrito Federal.

Each economic group may hold only one concession per State, and accreditation will be preceded by a public auction considering both technical experience and pricing elements.

Touristic cities, classified as tourist centers by the government, will be allowed to host casinos as well, regardless of the population density of the State in which they are located. However, a tourist casino cannot be located less than 100km away from any casino integrated resorts.

Casinos on river vessels, one for each river with 1,500 km to 2,500 km in length; two for each river with a length between 2,500 km and 3,500 km; and three per river with a length greater than 3,500 km.

These vessels may not be anchored in the same location for more than 30 consecutive days, and the concession may be for up to ten establishments. These ships must have a minimum of 50 high-end rooms, restaurants and bars and shopping centers, as well as venues for events and meetings. The Executive Power may grant the exploitation of casino games on maritime vessels in the national territory for up to 10 (ten) establishments.

The minimal capital for casino operators is 100,000,000.00 BRL (one hundred million Brazilian Reais).

Licensed casinos will have a 30-year authorization, renewable for an equal period.

Bingo

The current text allows its permanent operation in bingo houses, allowing municipalities and the Federal District to explore these games in stadiums with capacity of over 15,000 people.

Bingo houses must have a minimum capital of R$ 10 million and be located in places with a minimum area of 1,500 square meters, where up to 400 video bingo machines can also be located, but slot machines will be prohibited.

According to the text, at most one bingo house will be accredited for every 150,000 inhabitants and will have a 25-year authorization, renewable for an equal period.

Jogo do Bicho

For the legalization of “jogo do bicho”, all licencensee’s records, whether of betting or extraction, must be computerized and with the possibility of remote access in real-time by the Union.

Operators must present minimum capital of 10,000,000.00 BRL (ten million Brazilian Reals) and reserve sufficient funds for the payment of obligations, except for the prizes, when insurance, cash guarantee, bank guarantees or surety bonds will be accepted in values still to be determined by future regulation.

Accreditation will be set for a period of 25 years, renewable for an equal period.

There may be at most one operator of “jogo do bicho” for every 700,000 inhabitants of each State of DF. In those areas below the limit there will be allowed only one operator to run the game.

Online gaming

The exploitation of games of chance, through bets in electronic marketing channels, via the internet, mobile telephone, mobile computing devices or any other authorized digital communication channels, will depend on a specific regulation for this purpose, to be prepared by the Ministry of Economy.

No limitations on the number of licenses to be issued per State or population or further details were set in advance by the bill.

Excluded modalities

Important to highlight that previous versions of the draft released at the beginning of December conflicted and revoked the Law No. 13,756/2018, which created and legalized fixed-odds sports betting in Brazil.

Other betting modalities besides horse racing, such as pari-mutuel or direct bets (P2P) remain out of the scope of the draft and thus undefined.

Health and Tourism Lotteries

Law No. 14.455/2022 and potential impact of the Health and Tourism Lotteries on Fixed Odds Sports Betting. It authorizes the Executive to create the Health and Tourism Lotteries. The operators of these lotteries could be private companies and will be able to offer lottery games of numerical predictions, lottery games of sports predictions and the fixed-odds sports betting lottery, in physical and virtual environments.

The approved text maintained the percentage of 95% (ninety-five percent) of the operator, only changing the destinations of the lottery’s social destinations, as follows: 3.37% (three point thirty-seven percent) to the FNS – National Health Fund, in the case of the Health Lottery, or to the Brazilian Agency for the International Promotion of Tourism – Embratur, in the case of the Tourism Lottery. The percentage of 1.63% (one point sixty-three percent) to Brazilian sports entities that cede the rights to use their names, brands, emblems, anthems, symbols and the like for the dissemination and execution of the Fixed-odds lottery. The values of the prizes not claimed by the players of the new lotteries will be reverted to the FNS (Health Lottery), and to Embratur (Tourism Lottery).

Law No. 14.455/2022 was approved and authorizes the Executive to create the Health and Tourism Lotteries. The operators of these lotteries could be private companies and will be able to offer lottery games of numerical predictions, lottery games of sports predictions and the fixed-odds sports betting lottery, in physical and virtual environments. Ainda não está claro como serão viabilizadas as autorizações/licenças.

Regulation of Law No. 13,756/2018 (Fixed-odds Sports Betting Law) is also expected until the end of 2022, and licenses until the end of the first semester of 2023.

Bill of Law No. 442/1991, which intends to regulate gambling in general. Including casinos, bingos, online casinos and other games was approved by the Chamber of Deputies in February 2022 and may be discussed in the Senate in the end of 2022.

The religious groups in the congress are gaining more and more political relevance and oppose any casino bill. The unregulated and uncontrolled operation of hundreds of offshore (an some local) operators, heavily advertising in the country, may generate a conservative reaction from lawmakers and police authorities.

Unfortunately, Brazil is still an unregulated jurisdiction and any start-up looking to enter the market must have an appetite for regulatory uncertainty. That being said, Brazil is by far one of the most interesting gaming markets in the world, with over 212 million people (it is the fifth-largest country in the world with regard to size and the sixth in population) in a single gaming jurisdiction (which means, potentially, a single license and a single regulator).