Gaming Law 2022 Comparisons

Brazil is the largest and most populated country in Latin America, with a total area of 3,265,080 square miles and a population of more than 216 million people (it is the fifth-largest country in the world with regard to size, and the seventh-largest in population). Brazil is a federation divided into 26 states, one federal district and 5,570 municipalities.

Almost all gambling activities have been prohibited in Brazil for over 75 years. In Brazil, gambling does not have a legal definition. Instead, Decree-Law No 3,688/1941 (the “Misdemeanours Law”), drafted with the intention of preserving social morality, provides in Article 50 for the prohibition of “games of chance”, punishable with imprisonment for three months to one year, and a fine for those who establish or carry out games of chance in a public place or a place accessible to the public, by means of the payment of an entry fee or otherwise. There are three definitions of a “game of chance”:

• a game in which the winnings and the losses depend exclusively or mainly on chance;
• bets on horse racing outside a race track or where it is authorised; and
• bets on any other sporting competition.

Since the general ban on games of chance in 1941, the only legal gambling activities are the lotteries under state monopoly and horse race betting. According to Brazilian case law, poker is considered a game of skill and, therefore, is not illegal.

Several bills of law are currently under discussion in Congress, comprising integrated resort casinos, bingo, online gaming and lotteries.

After a gambling ban of more than 75 years, with a brief and failed attempt at regulation of bingo in the 1990s, Brazil has recently seen some development in terms of gambling activities.

Poker, although unregulated, is legal in Brazil, as it is considered a skill-based game. This understanding has been confirmed by several court decisions.

The opening of the Brazilian gambling market started with the creation of the virtual and land-based instant lottery called LOTEX by Law No 13,155/2015.

Law No 13,756/2018 created fixed-odds sports betting as a lottery modality, granting powers for the Ministry of Economy to regulate it and issue the respective licences. According to the law, the Ministry of Economy has up to four years to complete the regulation.

There have been several discussions in 2022 related to gambling regulation and legalisation, mostly aimed at providing additional sources of revenue for the government and funding recovery plans related to the COVID-19 pandemic. More specifically, Law No 14.455/2022 was enacted as a result of Bill of Law No 1,561/2020 being approved by Congress. It directs temporary lotteries to be created, the revenues of which will be earmarked for health and tourism.

Public Consultations Issued by SECAP

The Secretariat for Public Policy Evaluation, Planning, Energy and Lottery (SECAP) was restructured and renamed the Special Secretariat for Productivity and Competitiveness (Secretaria Especial de Produtividade e Competitividade or SEPEC) by Decree No 11,036/2022 in April 2022. A department of the Ministry of Economy, SEPEC is in charge of regulating sports betting and lotteries. The former SECAP issued three public consultations on the matter and hosted a number of webinars to assist the ongoing work towards the establishment of regulations aligned with globally accepted best practices.

The first public consultation, published in July 2019, had seven general questions regarding regulation and aimed to gather opinions from the public and understand the market’s expectations prior to the issuance of any ruling on the subject. The second public consultation, published in September 2019, aimed to collect contributions to a draft Decree on Fixed-Odds Sports Betting. Finally, the third public consultation, published in February 2020, introduced a new draft decree in light of a legal opinion issued by the Ministry of Economy’s legal staff.

As per the contents of the third public consultation, the bidding procedures would offer 30 licences under a concession model and bidding would be held every six months until the national market was supplied by a limited number of companies operating in such activity or, in different cases, up to a period of four years after the first public bidding session. The number of 30 licences is likely to be increased, according to the regulator.

The draft proposed by the regulator in the third public consultation and the limit on the number of concessions to 30 were policies left behind by the regulator after the change in command of SECAP in the first half of 2020.

On 10 June 2020, the Council of the Investment Partnerships Programme included fixed-odds sports betting in the programme. With this resolution, the National Economic and Social Development Bank (Banco Nacional de Desenvolvimento Econômico e Social or BNDES) will lead the concession process under the supervision of the Ministry of Economy, as approved by Decree No 10,467/2020.

Courts Establishing Important Precedents

While Congress is slowly progressing in the legalisation and regulation of gambling activities in Brazil, the courts are playing a noteworthy role in the definition of gambling-related precedents.

On 23 November 2015, a court decision in the southern state of Rio Grande do Sul ruled on the grounds that gambling is not illegal since the prohibition set out in Article 50 of the Misdemeanours Law would be unconstitutional (Case No 0042094-45.2015.8.21.9000 from the State Court of Rio Grande do Sul). The public attorney has appealed the ruling before the Brazilian Supreme Court (RE 966177), and such appeal has been granted “general repercussion” effects, meaning its final award will be binding upon all other similar cases in the country.

On 6 June 2020, the Brazilian Supreme Court ruled (RE 634764) that the local tax on services (“ISS”) can be levied on betting activities and that the constitutional tax basis for horse racing is the amount of the “take” (equivalent to gross gaming revenue, or "GGR"). This is a seminal precedent for future discussions on the tax basis of sports betting, so it can be argued that ISS can only be levied on the GGR of sports betting.

On 30 September 2020, the Brazilian Supreme Court also ruled the federal monopoly on lottery operations to be unconstitutional (ADPF 492, ADPF 493 and ADI 4,986). As a result, the states were found to have the right to operate 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 has a direct impact on sports betting – created as a lottery modality by Law No 13,756/2018 – since all states will be able to operate sports betting within their territories. Currently, the majority of states are enacting state-level laws and a number of them have already initiated preliminary studies (specifically, Amazonas, Distrito Federal, Maranhão, Minas Gerais, Paraná, Pernambuco, Rio de Janeiro, São Paulo and Tocantins) to assess the feasibility of offering lottery products potentially embracing sports betting modalities and aimed at choosing the best regulatory model (concessions, licences) to enable them to partner with private partners in future operations.

Under this scenario, the federal government will be able to issue federal licences that will allow the federal licensees to operate online and retail businesses all over the national territory, regardless of any state licence. At the same time, each state will be able to operate sports betting within its borders, directly or with a private operator as a partner. Since making a state lottery available outside the respective state territory is a criminal misdemeanour in Brazil, there will be a lot of discussion on how the place where the online bet is made will be determined.

Finally, on 17 June 2021, the State of São Paulo Court of Appeals confirmed a circuit court opinion issued in 2020 (Case No 1038886-96.2017.8.26.0053), according to which, ISS cannot be levied on the whole amount of the buy-ins of poker tournaments, but only on the fees earned by the organiser (ie, total buy-ins minus prizes). More careful consideration to GGR is being given by the legal system as a regular and reasonable basis for taxation.

Delay to Privatisation Process for Sports Betting

The unexpected complexity that has arisen has halted the privatisation process for the moment, in order to consider the far-reaching impacts of the Supreme Court ruling on the potential market and regulation of sports betting.

In addition, as a result of that ruling, now that every state and the federal district will be entitled to offer instant lottery products, in October 2020 the consortium formed by IGT and Scientific Games announced it was forfeiting the award of LOTEX even before executing the concession contract, under the justification that the negotiation with Caixa Econômica Federal (the Federal Savings Bank) to sell tickets at its accredited points of sale was unsuccessful. It is expected that updated studies will be held before a new tender can be set, with new ways of engagement and collaboration with the private sector.

Sports Betting

Online fixed-odds sports betting was legalised by Law No 13,756/2018, recently amended by Law No 14,183/2021, and the Ministry of Economy is currently working on the regulation, which is not expected to be issued until early 2023. Pari-mutuel betting and head-to-head betting on sports events are prohibited.

Horse Race Betting

Horse race betting is regulated by Law No 7,291/1984 and Decree No 96,993/1988. Horse race wagering is restricted to non-profit entities that own the race tracks, and are duly authorised by the Ministry of Agriculture, Livestock and Food Supply. These entities may operate betting websites focused on horse racing content.

Bingo

Online bingo is prohibited in Brazil.

Casinos 

Online casinos are prohibited in Brazil.

Lotteries

The state-owned Caixa Econômica Federal currently runs the federal lottery and has recently launched a website to sell lottery tickets. All state-owned lotteries operating in Brazil are also authorised to offer their products online.

Poker 

Poker has been recognised as a sport by the former Ministry of Sports, now the Secretariat of Sports, an agency of the Ministry of Citizenship. As a skill-based game, online poker is permitted, but there is no regulation in place.  

There has been some discussion as to whether only poker tournaments should be legal, or if ring games should also be authorised. Based on the civil law concept of betting, it is understood that ring poker games cannot be classified as a form of sports betting, even if they involve real money. Hence, provided that the rules of a ring game establish that the player must play for a minimum amount of time before being able to leave the table, the multiplicity of hands is enough to argue that the outcome of the game relies more on skill than chance, making it legal in Brazil.

Fantasy Sports 

Fantasy sports are not regulated in Brazil. Based on the fact that the result of a fantasy sports game depends more on the knowledge and skill of the players than on chance, it is understood that fantasy sports are permitted in Brazil.

Social Gaming 

Social gaming is not regulated in Brazil. However, it is permitted, provided that chance is not the sole or preponderant factor in determining the final result of the game, and that the players are not entitled to win prizes with monetary value.

Offshore Gambling Offer 

The territorial restriction set forth in Article 2 of the Misdemeanours Law – according to which, Brazilian law is only applicable to a misdemeanour committed in Brazilian territory – currently allows offshore online operators to offer their betting services to Brazilian residents. 

Bets and games are types of contracts according to the Brazilian Civil Code (Law No 10,406/2002) and one of the general rules is that a contract by and between absent parties is deemed as executed in the place of the proponent. This is set forth by Article 9, paragraph 2 of the Law of Introduction to the Brazilian Rules of Law (Decree-Law No 4,657/1942) and repeated in Article 435 of the Brazilian Civil Code. Hence, if an offshore operator’s website is hosted in another jurisdiction where gambling is authorised, the contract between the Brazilian client and that operator is valid and subject to the law in the operator’s jurisdiction, being beyond the scope of the Misdemeanours Law. However, these contracts are still enforceable in Brazil and the respective debts can be collected in this country. 

Sports Betting 

Land-based fixed-odds sports betting was legalised in December 2018 by Law No 13,756/2018 and amended in 2021 by Law 14,183/2021, and the Ministry of Economy is currently working on the regulation, which is not expected to be issued until 2023. Pool betting, betting exchanges and head-to-head betting on sports events are prohibited.

Horse Race Betting 

Horse race betting is regulated by Law No 7,291/1984 and Decree No 96,993/1988. Horse race wagering is restricted to non-profit entities that own the race tracks, and are duly authorised by the Ministry of Agriculture, Livestock and Food Supply. These entities may appoint agents to facilitate wagering on their behalf, and can also hire private suppliers, which are not subject to licensing or any specific regulation.

Bingo 

Commercial bingo is prohibited in Brazil. In 2015, Law No 13,019/2014 was amended by Law No 13,204/2015, to include Article 84-B, which states that civil society organisations will be entitled to distribute, or promise to distribute, prizes – through sweepstakes, gift cards, competitions, or similar operations – in order to raise additional resources for their maintenance or costing. Based on this provision, several “non-profit” bingo halls are operating in the country, but according to SECAP’s understanding, these operations would need to have been previously approved by the Ministry of Economy.

Casinos 

Casinos are prohibited in Brazil.

Lotteries

Caixa Econômica Federal runs the federal lottery and has a network of over 13,500 agencies. Caixa was granted control of the federal lottery as a result of Decree No 50,954/1961, which cancelled all lottery licences granted to the private sector. Before the Supreme Court ruling issued in September 2020 (ADPF 492, ADPF 493 and ADI 4,986), only the lotteries of the states of Rio de Janeiro, Minas Gerais, Ceará, and Paraíba were operational. 

Now, all 26 states and the federal district will be able to open and operate their own lotteries, offering the same lottery products authorised by the federal legislation, including fixed-odds sports betting and instant lotteries. Despite legal uncertainty, since the decision was analysed under the lens of federative autonomy and constitutional powers of states and municipalities, cities such as Guarulhos (state of São Paulo), Atibaia (state of São Paulo), Porto Alegre (state of Rio Grande do Sul)  and Colatina (state of Espírito Santo) have been racing to enact their own legislation on lotteries as well as allow for future operations on those same grounds. 

In September 2022, Law No 14.455/2022 was enacted as a result of Bill of Law No 1,561/2020 being approved by Congress. It directs temporary lotteries to be created, the revenues of which will be earmarked for health and tourism.

Poker 

Poker has been recognised as a sport by the Secretariat of Sports. As a skill-based game, online poker is permitted, but there is no regulation in place. There has been some discussion as to whether only poker tournaments should be legal, or if ring games should also be authorised. Based on the civil law concept of betting, it is understood that ring games do not involve bets and are therefore also legal.

Gaming Machines 

Gaming machines are prohibited in Brazil. 

The general prohibition on gambling in Brazil is set forth in Article 50 of the Misdemeanours Law, which imposes imprisonment for three months to one year and a fine for those who establish or exploit games of chance in a public place or a place accessible to the public, by means of the payment of an entry fee or otherwise. 

The federal lottery operated by Caixa Econômica Federal 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 – authorises 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 football entities in this contest and the instalment of tax debts, besides amending Laws No 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. 

LOTEX (the instant lottery) was created by Law No 13,155/2015, amended by Law No 13,756 of/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 legalised 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 Investment Partnerships Programme for privatisations by Decree No 10,467/2020. 

In Brazil, gambling does not have a legal definition. As a matter of fact, the word “gambling” does not have a perfect translation into Portuguese. It can mean a bet or a game, involving a consideration, a prize and chance. 

“Game” is a contract type that can be defined as a legal transaction whereby two or more people hold a particular promise (usually with pecuniary content) in favour of the person who achieves a favourable result in the performance of an act in which the parties participate. 

Note that the game (and thus the success or failure of each party) necessarily depends on the performance of each party (called a “player”), either by their intelligence, skill, strength, or pure luck. 

“Bet” is another contract type, defined as a legal transaction in which two or more people with different opinions on a certain event promise to perform a particular action (in general, with monetary content) to the benefit of the party whose opinion prevails. Hence, in the bet, there is no requirement for the active participation of any party (called a “bettor”) to influence the outcome of the event, but rather only the expression of their personal opinion. 

The subtle difference between a “game” and a “bet” is that the result of a game will depend on the action of the parties, while the result of a bet depends on facts unrelated to the parties’ will. Such legal definitions have been construed by judicial precedent and are not expressly set forth by law, even though they are widely accepted and applied by the Brazilian courts. 

Article 50 of the Misdemeanours Law 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. “Games of chance” are defined as: 

• games in which winning or losing depends exclusively or predominantly on chance; 
• bets on horse races outside the race track or other authorised venues; and 
• bets on any other sporting 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, according to Professor Humberto José da Nova, includes “safeguarding morality” in order to “prevent certain illegal and vicious acts, or defend certain moral sentiments regarded as indispensable to harmonious social co-existence, the effects of which are harmful to the interests of 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. 

The Misdemeanours Law dates from 1941 and does not differentiate between online and land-based activities. 

Decree No 9,327/2018, which regulates LOTEX, defines physical bets as those made by the client upon the purchase of a printed ticket and virtual bets as those made by the client via electronic channels. 

Law No 13,756/2018, which introduced fixed-odds sports betting as a lottery modality, sets forth that it can be offered by both land-based and online operators. 

See 3.3 Definition of Land-Based Gambling. 

According to Article 50 of the Misdemeanours Law, a person is guilty of illegal betting if they establish or explore games of chance, an offence punishable with imprisonment for between three months and one year, and a fine. Whoever is found taking part in a game of chance, even via the internet or any other means of communication, as a cashier or bettor, is subject to a fine that ranges from BRL2,000 to BRL200,000. 

Currently, all prosecution cases related to Article 50 are suspended until the Brazilian Supreme Court judges Extraordinary Appeal No 966,177. The scope of that judgment will be to determine whether Article 50 of the Misdemeanours Law complies with the constitutional precepts concerning free enterprise and fundamental freedoms, as provided for in Articles 1, IV; 5, XLI; and 170 of the federal constitution.

An unlawful gambling operator can be penalised with imprisonment for between three months and one year, and a fine. Players and punters involved with unlawful gambling are subject to fines ranging between BRL2,000 and BRL200,000. 

Since the general ban on games of chance was imposed in 1941 by the Misdemeanours Law, and reinforced by Decree-Law No 9,215/1946, several bills of law have been discussed in Congress for the legalisation of gaming activities. Currently, they are appended to Bills of Law Nos 186/2014 and 2,234/2022, at the Senate. 

While Bill of Law No 186/2014 is ready to be presented on the Senate floor, Bill of Law No 442/1991 was approved by the Chamber of Deputies and sent to be analysed by the Senate, where it was renumbered as Bill of Law No 2,234/2022.  

Once a bill of law is approved on the floor of one of the houses of Congress, it will have to be approved by the other house. If amended, it will need further approval of any amendments by the house of origin, prior to being presented and signed by the president.

Bill of Law No 2,234/2022 (Formerly No 442/1991)

• Origin: Chamber of Deputies (originally numbered as Bill of Law No 44/1991). 
• Summary: authorises the operation of games of chance in Brazil. 
• Status: approved by the Chamber of Deputies and renumbered as Senate Bill of Law No 2,234/2022. 
• Next steps: pending analysis by the Federal Senate. 
• Modalities: casinos, bingo, fixed-odds sports betting, video lottery terminals (VLTs), online gaming, lotteries, jogo do bicho. 
• Licences: 
1. casinos – public bid for concession; 30-year term, renewable for equal terms; 
2. bingo – authorisation for 20 years, renewable for one equal term; 
3. jogo do bicho – BRL5 million minimum paid-up capital; unlimited time licence; 
4. lotteries – states may have bids for a concession of lottery services with a 20-year term; 
5. online gaming – not defined; and 
6. VLTs – BRL20 million minimum paid-up capital, type of licence not yet defined. 

Bill of Law No 186/2014 

• Origin: Senate. 
• Summary: authorises the operation of games of chance in Brazil. 
• Status: a draft proposed by the rapporteur, Senator Benedito de Lira, was rejected by the Justice and Constitution Commission. 
• Next steps: voting on the floor of the Senate to be scheduled. ¬Modalities: jogo do bicho; video-bingo (Class II machines) and video-jogo (VLTs), both land-based and online; bingo; casino resorts; sports betting and other non-sports-related types of betting, both land-based and online; and online casino games. 
• Licences: 
1. all gaming modalities must be approved by the federal government; 
2. casinos, sports betting and online games are to be licensed by the federal government; 
3. bingo is to be licensed by the states and the federal district; and 
4. jogo do bicho and VLTs are to be licensed by the municipalities. 

The procedures and criteria for licensing are yet to be determined by future regulation.

Bill of Law No 213/2017 

• Origin: Senate. 
• Summary: prohibits transactions with credit or debit cards, or e-currencies aimed at taking part in games of chance at foreign-hosted websites. 
• Status: draft presented by the sponsor, Senator Ciro Nogueira, was proposed by the rapporteur, Senator Jorginho Mello, to proceed to consideration at the Commission of Economic Affairs (CEA). Following presentation of Amendment No. 1 by Senator Plínio Valério, the rapporteur asked for further analysis to be taken before the voting session by the CEA can be resumed. 
• Next steps: voting in the Commission of Economic Affairs to be scheduled.

Bill of Law No 2,648/2019 

• Origin: Senate. 
• Summary: regulates casino activities in resorts located in the Brazilian territory. 
• Status: draft presented by the sponsor, Senator Roberto Rocha, is pending analysis by the rapporteur, Senator Angelo Coronel, at the Commission of Regional Development and Tourism. 
• Next steps: report to be presented by Senator Angelo Coronel. 
• Modalities: any and all gaming modalities operated in casinos. 
• Licences: all gaming modalities must be approved by the federal government.

Bill of Law No 3,234/2019 

• Origin: Chamber of Deputies. 
• Summary: authorises the establishment of Special Touristic Regions in Northeastern Brazil. 
• Status: report presented by the rapporteur, Representative Eduardo Bismarck, was approved with amendments by the Tourism and Taxation Commissions. 
• Next steps: awaiting the nomination of a rapporteur at the Commission of Constitution, Justice and Citizenship (CCJC). 
• Modalities: not expressly referred to. 
• Licences: all gaming modalities must be approved by the federal government.

Bill of Law No 4,495/2020 

• Origin: Senate. 
• Summary: regulates expansion of the tourism industry by establishing integrated resorts in the Brazilian territory. 
• Status: nomination of Senator Veneziano Vital do Rêgo as the rapporteur at the Senate floor. 
• Next steps: voting on the floor of the Senate to be scheduled. 
• Modalities: any and all games of chance operated in casinos. 
• Licences: all gaming modalities must be approved by the federal government. 

Since April 2022, SEPEC has been in charge of regulating lotteries, including the fixed-odds sports betting lottery modality, the regulation of which is currently being drafted. 

The Ministry of Agriculture, Livestock and Food Supply is responsible for the regulation of horse race betting. 

In general, Brazilian regulation tends to be prescriptive. Consumer and data protection rules, on the other hand, are more risk-based, with the operator being held liable for the negative effects on consumers and data subjects, even if the prescriptive regulations have been complied with. 

The Secretariat for Public Policy Evaluation, Planning, Energy and Lottery (SECAP) was restructured and renamed Special Secretariat for Productivity and Competitiveness (SEPEC) by Decree No 11,036/2022 in April 2022. A department of the Ministry of Economy, SEPEC is in charge of regulating sports betting and lotteries. 

Sports Betting 

According to the latest public statements made by SECAP, this is likely to be a concession model with a limited number of licences to be sold in a public tender.

Horse Race Betting

The horse race betting licence issued by the Ministry of Agriculture, Livestock and Food Supply is called “Carta Patente”.

Poker 

Poker does not require specific licences.

Fantasy Sports 

Fantasy sports do not require specific licences.

Social Gaming 

Social gaming does not require specific licences.

Sports Betting 

Licences are not yet available.

Horse Race Betting

Licences can be obtained at the Ministry of Agriculture, Livestock and Food Supply.

Lotteries 

There are no lottery licences available in Brazil, but several state lotteries are looking for service providers. 

Sports Betting

This is yet to be determined by BNDES.

Horse Race Betting 

Horse race betting licences do not have an expiry date. 

Sports Betting 

Application requirements are yet to be regulated.

Horse Race Betting 

The applicant must: 

• be a non-profit entity legally incorporated in Brazil; 
• own or have the rights to use a race track; 
• demonstrate the technical and economic viability of the weekly racing schedule; 
• present the floor plan of the race field; and 
• present the draft of a general betting plan (which includes the rules applicable for each race to be run by the operator, such as prize, ticket value, minimum and maximum betting amounts, and payout).

Lotteries 

Currently, there are no lottery licences available in Brazil, but several state lotteries are looking for service providers. The duration of each contract with every state depends on the rules defined in the public procurement process. 

No information has been provided in this jurisdiction. 

No information has been provided in this jurisdiction. 

No information has been provided in this jurisdiction. 

Land-based gambling is restricted to federal and state lotteries, horse race betting at race tracks and agencies, poker rooms, and future LOTEX and sports betting points of sale. 

Premises licensing varies according to the gambling modality. 

Caixa Econômica Federal’s lottery agencies are concessions granted by the federal government, and the premises licences are granted by Caixa. 

Horse racing entities must apply for their agents’ and agencies' licences before the Ministry of Agriculture, Livestock and Food Supply. Each horse racing entity remains entirely responsible for any and all acts of the agent. The agent licence is granted to the agent (an individual or a legal entity) to facilitate wagering only at the specified venue. 

The Brazilian Supreme Court’s ruling from 30 September 2020, which ruled as unconstitutional the federal monopoly on lottery operations, will completely change the landscape of land-based gaming in the country. Every state now has the right to operate the exact same lottery modalities created by the federal law and this will increase the offer of lottery products in the country. It will also create a variety of legal arguments between the states and the Union on how much room the states have to innovate and create attractive features in their local lotteries. 

B2C licences are not yet available. 

There are currently no regulations on B2B licences. 

There are currently no regulations on affiliates in Brazil. 

There are currently no regulations on white-label providers in Brazil. 

The inclusion of sports betting in the Investment Partnerships Programme was formalised by Decree No 10,467/2020, designating BNDES as responsible for the execution and monitoring of the privatisation process and the Ministry of Economy as co-ordinator of the procedures and stages of that process. SEPEC is now in charge of the regulation of sports betting. 

If LOTEX is taken as an example, there were 15 months between the date BNDES hired independent experts (8 March 2017) and the first tender attempt (25 June 2018), which was a no-show. In this sense, and taking the COVID-19 pandemic into consideration, it appears very unlikely that sports betting regulation will be issued in Brazil in 2022.

There are currently no technical measures in place in Brazil. 

There are currently no responsible gambling requirements in force. 

There are currently no recent or expected forthcoming changes. 

There are currently no gambling management tools defined in the regulation. 

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 the 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 and handover dates, as well as the winners’ name, proof of identification and personal address. 

There are currently no recent or expected forthcoming changes. 

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 must 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 the 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 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, in any type of game; and 
• any case involving terrorism or suspicions of terrorism. 

If the operator does not communicate any suspicious transaction to COAF during the calendar year, it must issue a negative certification to SEPEC by 31 January 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 will be identified by their taxpayer number ("CPF") to play either online or at land-based shops. Operators of fixed-odds betting lotteries need 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 will 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. 

Decree No 57,690/1966 and Decree No 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 advertising content. 

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

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. 

Currently, the only criminal provision regarding gambling advertising is the prohibition to promote illegal lotteries, established by Article 51 of the Misdemeanours Law. 

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

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

No advertisement may: 

• 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. 

There are currently no recent or expected forthcoming changes. 

There are currently no acquisitions or changes of control regulations in place for sports betting and horse race betting in Brazil. 

There are currently no regulations in place for change of corporate control triggers.

There are currently no requirements for passive investors in acquisitions or changes of control. 

Horse Race Betting

The Ministry of Agriculture, Livestock and Food Supply is the regulatory body in charge of regulating, monitoring and enforcing the regulation and penalties involving race tracks in Brazil.

Sports Betting

Since April 2022, SEPEC is the regulatory body in charge of regulating, monitoring and enforcing the regulations and penalties for lotteries in Brazil, which includes the fixed-odds sports betting lottery modality, both land-based and online. 

Regulation is still being drafted, and there is no history of enforcement yet. In the past, sanctions have been applied by the federal and state courts upon requests by public attorneys’ offices. 

Regulation is still being drafted, and there is no history of enforcement yet. 

Regulation is still being drafted, and there is no history of enforcement yet. 

About 70% of all Brazilians are mobile internet users, and, on average, Brazilians spend four hours and 45 minutes each day on the internet on their mobile devices. This represents just over 50% of all the time they spend online every day. Brazil has the third-highest mobile internet usage in the world, behind Thailand and the Philippines. Online payment methods are becoming more and more accessible, and all these factors create a very attractive environment for the growth of social games. There is also no trend towards the regulation of social games in the near future. 

Brazil has the third-largest esports fanbase in the world (China and USA are the largest), with 21.1 million fans, of which, 9.1 million watch professional content more than once per month. It is estimated that by the end of 2021, almost 30 million Brazilians watched esports in some capacity. 

Besides the live broadcast of esports via social media, several sports channels already have live esports events as recurring content in Brazil. 

Fantasy sports are skill-based games and have become quite popular in Brazil. CartolaFC, the fantasy sports platform operated by TV Globo, the largest TV network in Brazil, has over five million free subscribers and more than 400,000 paying users (at BRL49.90 for renewals and BRL59.90 for new members, each), with revenues over BRL16 million per year, since it was granted authorisation by SECAP to draw prizes. 

Poker is a game of skill that is legal in Brazil and, as such, it is not regulated. Some groups are lobbying for the regulation of skill-based games (“sports of the mind”) as a way to have more clarity on the applicable taxation of tournaments and ring games. 

Four of Brazil’s financial supervisory authorities have come together to regulate emerging technologies, including blockchain. Several agencies under the Ministry of Economy – namely, the Central Bank of Brazil ("BCB"), the Securities Commission ("CVM") and the Superintendence of Private Insurance ("SUSEP") – announced in June 2019 their intention to adopt new regulations to manage fintech and cryptocurrency advances, with the creation of a regulatory sandbox framework for new fintech projects and companies. 

All three agencies have accepted blockchain or distributed ledger technology companies to each of their sandbox programmes. 

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 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 Profit 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 a rate of 1.65% and 7.6% respectively, allowing credits from acquisitions.

Deemed Profit 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 a rate 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 ISS (2–5%). 

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 of 22 November 2018 and Article 56 of Law No 11,941 of 27 May 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 of 22 November 2018.

Horse Race Betting 

Taxation on horse owners’ winnings

Prizes paid to horse owners and breeders are subject to income tax withholding at a rate of 15%, as set forth in Article 737 of Decree No 9,580 of 22 November 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 of 22 November 2018.

Sports Betting

Taxation on the operator 

Law No 13,756 of 12 December 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 to the regulator that those tax burdens were excessive. As a 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 the current discussions involve a 10% tax on GGR, which will mean a total tax burden of from 21.25–24.25% on GGR when added to PIS (1.65%), COFINS (7.6%) and ISS (2–5%). 

In July 2021, the original legislation on sports betting was amended by Law No 14,183/2021, which introduced taxation standards more aligned to international practices. According to the new set of rules, 0.1% of the total land-based handle/turnover and 0.05% of the total online handle/turnover must be paid to social security. As for the public funds related to education, public safety and sports, taxation is levied on the GGR at rates, respectively, of 0.82%, 2.55% and 1.63%. Additionally, the new law establishes that no more than 95% of the GGR can be used to cover expenses of costs and maintenance of the operator. 

Taxation on players’ winnings 

Fixed-odds sports betting 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 of 22 November 2018 and Article 56 of Law No 11,941 of 27 May 2009. 

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 (2–5%). 
• 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 (2–5%). 

Taxation on players’ winnings 

According to the RFB, when the prize depends on the performance of the participants, it is deemed as remuneration for 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 reals): 

• 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. 

See 3.7 Recent or Forthcoming Legislative Changes.