The beginning of online betting in Brazil

The issue of online betting began in Brazil in 2018, at the fading lights of the Michel Temer government, with the legalisation of ‘bets’. The law stipulated regulation in two years, extendable for another two, but absolutely nothing was done to regulate the sector.

Society needed regulation, but between 2018 and the beginning of 2023, anyone who wanted to operate, seriously or not, set up in a game with no rules. Those who exploited this type of business made money in the face of the Jair Bolsonaro government's failure to regulate the sector.

Lula’s administration: First steps to regulation

During this period, the betting industry grew rapidly. It became one of the main supports for football, for example.

At the start of the Lula administration, the challenge was urgent, but there were no simple solutions due to the complexity of the inherited situation.

The Ministry of Finance has been tackling the issue since the beginning of 2023, aware of the shortcomings of the 2018 law. A provisional measure was sent to Congress in July 2023, banning betting for children and teenagers, and the advertising of unauthorised bets, establishing the obligation for the operator to be incorporated in Brazil, in addition to the payment of grants and taxes - with the provision of penalties that had hitherto been non-existent. That was the start of regulation.

The same Provisional Measure introduced mechanisms to combat the manipulation of results, money laundering and concerns about gambling addiction. Congress did not convert the Provisional Measure, but incorporated its content into a bill, also initiated by the Executive. The challenge was already great, but parliamentarians broadened the scope of fixed-odds betting, including provision for online games to operate.

Secretariat for Prizes and Betting (SPA/MF)

Although altered from the government's proposal, the law passed in December 2023 granted the Ministry of Finance the power to regulate the betting sector. Thus, in 2024 the Secretariat for Prizes and Betting (SPA/MF) was created and a regulatory agenda was announced, providing for total regulation of the sector within six months. This was achieved with the publication of ten ordinances by July this year.

Essential rules were laid down, such as the obligation for transfers of amounts involving bets to take place only between institutions authorised by the Central Bank and the ban on the use of credit cards to avoid indebtedness. Money laundering prevention rules were created.

The SPA/MF action also established specific regulations on responsible gambling, obliging companies to identify all gamblers and their profiles, with means of protecting their mental and financial health. In extreme situations, access to gamblers under special supervision is prohibited.

Regulation lists on Ads and Influencers: in and out

The regulation made progress on another sensitive point, dealing with advertising and the responsibility of digital influencers. It established that children and teenagers cannot participate in or be the target audience for advertising. It reaffirmed the importance of making it clear to the public that betting is not an investment, nor does it guarantee easy money or enrichment.

Since last month, a strict filter has allowed bets ‘in the process of adapting’ to operate, involving only companies that had submitted an official request to the SPA/MF. The most recent list of companies authorised to operate fixed odds betting at national level, up to 31 December this year, lists 96 companies with 210 sites respectively. The state lists have 18 companies.

On the other hand, a ‘negative list’ has been built up with more than 2,000 illegal, fraudulent and even criminal websites that will be blocked, as determined by Finance Minister Fernando Haddad.

A broad effort is currently underway to advance the implementation of regulations, ensuring protection for gamblers, in constant co-operation with the Ministries of Justice, Health, Sport, Communications (through the National Telecommunications Agency) and the Federal Attorney General's Office, as well as the Central Bank. With transparency, collaboration and responsibility, today there is light on a scenario that for so many years was under an irresponsible blackout.