Brazil: Creation of the Prizes and Betting Secretariat improves the structure of the Ministry of Finance

Decree No. 11,907, which creates the Prizes and Betting Secretariat (SPA) of the Ministry of Finance (MF), was published in the Official Gazette of the Union this Wednesday (31/1). The decision updates and improves the structure of the MF, by establishing the new SPA, with its respective competencies and its own functional framework.

The secretariat arrives to add the structure of the MF and improve government actions, with special attention to the process of regulating the fixed-odd betting market, which covers sports betting (so-called bets) and online games, as well as to fulfill the legal duties of the Ministry of Finance regarding lotteries and commercial promotions.

Actions to monitor and prevent money laundering will also be carried out by the new Secretariat, as well as market monitoring, aiming, among other points, at establishing responsible gaming policies, which consist of measures, guidelines and practices to be adopted for prevention. to compulsive or pathological gambling disorder, to prevent and not induce debt and to protect vulnerable people, especially minors, in addition to monitoring and supervising communication, advertising and marketing actions, among other duties provided for in Law No. 14,790, 2023.

The Ministry of Finance therefore now has eight secretariats: Executive Secretariat; Special Secretariat of the Federal Revenue; National Treasury Secretariat; Secretariat for International Affairs; Secretariat of Economic Policy; Secretariat of Economic Reforms; Extraordinary Secretariat for Tax Reform, and Secretariat of the Prizes and Bets Secretariat.

Operation

The SPA will have three sub-secretariats. In total, the new Secretariat will have 38 professional positions.

The Sub-Secretariat for Authorization will take care, among other things, of analyzing requests for authorization of actions for the free distribution of prizes, through a draw, gift certificate, contest or similar operation; advance capture of popular savings; exploration of fixed-odd betting and other lottery modalities; in addition to sweepstakes and lotteries carried out by horse racing promoters.

The Undersecretariat for Monitoring and Inspection will supervise and develop inspection actions relating to the modalities authorized by the Undersecretariat for Authorization. The Sub-Secretariat for Sanctioning Action will judge the Administrative Sanctioning Processes, in the first instance, observing the legal and infra-legal limits and powers provided, as well as requests for reconsideration and requests for review formulated in these processes.

The SPA's activities will be carried out in line with the Ministry of Sports, a department that received responsibilities relating to sporting integrity, in particular monitoring the manipulation of results in sporting events, in addition to responsibilities relating to transfers destined to athletes, clubs and administrative entities of sport.

Bets

At the end of 2023, President Luiz Inácio Lula da Silva sanctioned Law No. 14,790/2023, dealing with fixed-odd bets and regulating the well-known “bets market”. The new legislation regulates the sector and promotes changes to Laws No. 5,768/1971 and No. 13,756/2018.

The Law sanctioned by President Lula and published at the end of last year established criteria on taxation, standards for the commercial exploitation of fixed odds bets; defined the distribution of the revenue collected; established sanctions and also established the powers of the Ministry of Finance in regulating, authorizing, monitoring and inspecting the activity. This universe encompasses virtual betting, physical betting, real sporting events, online games and virtual online gaming events.

With the enactment of Law No. 14,790/2023, a gap in lack of regulation that had been open for years was filled. This is because the lottery modality called “fixed-odd betting” should have been regulated by the end of 2020 (two years after the publication of Law No. 13,756/2018, which legalized this modality), which was not fulfilled by the previous government. In other words, the “bets” market had been legitimized in the country since 2018, but since then the sector has operated without specific inspection and taxation rules; leaving bettors and sports activities exposed to the possibilities of scams and fraud.