Last month, the Plenary of the House of Representatives approved the replacement to Bill No. 2796/2021, which establishes the "Legal Framework for the Electronic Games Industry and for Fantasy Games" in Brazil. The approval of this milestone represents a huge advance for the fantasy sport industry, a modality that gains its formal recognition and its legal delimitation from this legislative proposition still under way.
The Bill came from an initiative to regulate the video game market and, primarily, separate these games from games of chance. The purpose of the legislator is quite clear, in § 2 of Art. 2 of the substitute approved in the House, which expressly indicates that it is not possible to consider electronic gaming the slot machines and the other games of chance. This differentiation is of paramount importance, too, for the correct development of the fantasy sport industry.
The definition of fantasy came from the suggestion of Amendment No. 2, whose content was eventually incorporated into the substitute, and brings with it elements that outline the activity that were based on foreign norms, especially in U.S. legislation, which in the Unlawful Internet Gambling Enforcement Act of 2006 makes clear the differentiation of fantasy for sports betting (Subchapter IV, §5362, 1, E, ix).
In the Legal Framework of Gaming, the Brazilian legislature defines fantasy as being the "disputes that occurred in a virtual environment, from the performance of athletes in real sporting events" and adopts four main criteria so that an activity can be framed in the modality: I – that the result depends on the user's technique to form his virtual team, that is, departing eminently from their knowledge, strategy and skills; II - that the rules of virtual dispute be pre-established; III - that the value of the prize is fixed; and IV – that the results are not based on the performance of a single team or a single athlete in a sports event verified in the real world (§ 3 of Art. 2 of the substitute approved in the Chamber).
This legal delimitation of the fantasy framework guarantees security to the modality that is sometimes confused with other activities.
The substitute item I differentiates fantasy from chance games. The Brazilian Law on Criminal Misdemeanors (art. 50 of Decree-Law No. 3,688/1941) determines that gambling is those whose gain or loss depend solely or mainly on luck. At this point, the legislator was concerned to emphasize that in fantasy, the player's success stems eminently from his abilities. Luck can even be present, but it is not decisive to achieve a positive result. The relevant, in the case of fantasy, ends up being the skill, knowledge, strategy, and study of each participant.
The elements brought by the Legislature in the Legal Framework of the Games, are also important to differentiate the fantasy of the lotteries. As provided for in Article 40 of Decree-Law No. 6,259/1944, the lottery has as its striking feature the placement of tickets, lists, coupons, vouchers, papers, manuscripts, signs, symbols, or any means of distribution of numbers. This characteristic, as noted in the definition brought in the substitute, is not present in fantasy, which has its result based on the player's performance, not depending on a random number assigned to it.
Lottery sports include fixed-quota betting, popularly known as sports betting, which, because they have sports as a backdrop, are often also confused (mistakenly) with fantasy. At this point, the legislative proposal is fundamental once again. By defining in the replacement to Bill No. 2796/2021 the differentiating requirements of fantasy, the legislator predicted in item IV of the text approved by the House of Representatives that in fantasy the outcome of the game depends on a combination of events, the joint actions of more than one player and other of one team, which keeps him away from sports betting, in which it can result from only the action of a single player or a single team.
The advances suggested by the Legal Framework of Gaming in conceptualizing fantasy also contribute to differentiate them from another type of activity, commercial promotions. The commercial promotion consists of the free distribution of prizes. In them, consumers compete for prizes from a raffle, contest or gift card. The main purpose of a commercial promotion is to promote a brand or product. It is a middle activity to achieve an end. In fantasy, and at that point walked well the legislator once again, it is clear from the defining elements brought in the substitute, it is an activity that does not seek to promote a brand or a product, because it is an end in itself. That is, the main goal of fantasy is the game itself and the entertainment that it generates to its users, it is not sought with the game to leverage other activities, such as the sale of advertising space or other products.
For all that has been exposed, it is clear the importance of the legal conceptualization contained in the Legal Framework about what comes to be fantasy. The replacement approved by the House of Representatives is not only timely, because if approved by the Federal Senate should boost the growth of the industry, but it is also important to remove existing uncertainties about what is effectively the activity.
The replacement for Bill No. 2796/2021 is under review by the reviewing house of the National Congress and depends on the subsequent presidential sanction. But even with these legislative steps pending, the industry already has high expectations from the advance of this legal framework. Now is to follow the next steps with the hope of better days.
Barbara Teles
Regulatory and public affairs lawyer of Rei do Pitaco
Rafael Marchetti Marcondes
Chief legal officer of Rei do Pitaco
