From a reading point of view of the Consumer Protection Code, there seems to be no doubt that the bettor is the “final recipient” of a “service” provided by the operator. But for this to happen, it is necessary to frame the bet as a service.
The CDC's definition of service is as follows: “activity provided in the consumer market, for remuneration, including banking, financial, credit and insurance services”.
Here, we already have a first challenge: the “provision” of the “betting services” does not occur through remuneration. The betting operator is not to be confused with a broker, an intermediary, a bookmaker.
The bettor bets “against” the operator and the latter is only remunerated on a win-lose basis: the operator retains the entire amount bet if the bettor loses the bet or returns the amount with a pre-defined multiplier if the bettor wins. In specific cases, even, the value of the bet can be returned (for example, if the possibility of a football match ending with 0 goals or 1 goal total is at stake, if there are two goals, the money can be returned and “nobody” wins).
That is why the operator acts as a “custodian” of the money that the bettor deposits to place his bets, but – usually – does not charge the bettor for this “service”, there is no remuneration or consumption relationship at this stage. Only in a second moment, depending on the result of the area, the operator will be able to earn profits. This situation, to some extent, resembles that of an investor in the stock market.
The individual who buys a share in a publicly-held company is, to some extent, “betting” in two scenarios: 1) in the scenario of obtaining profits from the result of the business activity; 2) in secondary market fluctuations, in which it can make gains from the appreciation of the asset.
While there is no doubt that the individual is a consumer in relation to the services provided by capital market intermediaries, such as securities brokerages, the situation of the individual shareholder vis-à-vis the company whose shares he acquired is ambiguous.
If we are talking about an individual who buys a handful of shares with the expectation of earning in one of the two scenarios (primary results or secondary market), he will certainly not receive “corporate” treatment by the company, partners, administrators, etc. It will not have enough representation (significant influence) to have any management power in the company.
His investment, however, is based on the expectation that the company will do a good job and, in the end, this will generate dividends and a possible appreciation of the security. This expectation in relation to the company's return, however, does not make it a provider of “financial return” services. This does not mean, of course, that this shareholder should not be protected - and that is exactly why he gains the status of "investor" and his protection is given, above all, against possible abuses that may be practiced by shareholder-investors, in particular, the controller and other insiders, such as administrators.
The regulation of publicly held companies, with the presence of an autonomous regulator, as in the case of the CVM, guarantees investors due protection against irregular abuses, but does not shield them from the typical risks of the market in which they have chosen to venture.
If it is true that it does not seem appropriate to confuse betting with investment, on the other hand it is undeniable that both have the common element of risk. Here we already have a first indication of an answer in the sense that the bet is not, in essence, a service provided under the terms of consumer legislation, but, even so, requires special protection for the bettor.
A little confusion should be avoided from the outset: the fact that lotteries are subject to the CDC should not be interpreted as a simple assumption that gambling is a service to the consumer. The jurisprudence that applies the CDC to lottery shops does so, above all, because lottery shops are providers of banking services, as permissionaires of Caixa Econômica Federal.
However, this opinion is not unanimous.
It happens that the lottery betting modality is different from sports betting. When someone pays an amount to buy a lottery bet “title”, he is “paying” the lottery for a “service “provided – those who do not win do not recover the amount bet, nor does the winner (even if he takes a hefty sum home). In lottery, the value of the bets forms a mutuality from which both the value of the prize and the remuneration of the “operator” come from, so that the operator is not at risk.
This is not the case with fixed-odds bets, even when we look at the spread phenomenon that exists between the multipliers, known as juice.
In a bet with two possible outcomes A or B, let's say that 10 bettors bet R$1 each on A and 10 bettors, R$1 each on B. The total value of the pre-set multiplier will be, for example, 1, 96 (the odds, in the jargon). Thus, if A or B is the result, the total volume of prizes distributed will be R$9.60 – BRL 0.96 per winner, leaving R$0.40 in profit for the bookmaker.
This, however, is not a certain remuneration – a consideration for the betting service, because, as you can imagine, in the real world, punters do not need to be divided into homogeneous groups, so that if the 20 total punters had hit the bet with this pre-defined multiplier, the operator would need to withdraw R$9.60 from its cash, leaving a loss of R$9.20 – since, even so, it would have juice of R$0.40.
In other words, the fact that this spread generates a profit depends, absolutely, on a good management by the operator, which, to some extent, takes this risk in contrast to the chances of bettors, in a very different situation from the consumption relationship, in that the service provider company assumes the risks of the business activity.
Finally, some market practices that aim to attract new customers – such as facilitating the withdrawal of bets during the course of a game (cash out) or the conversion of subscriptions and winnings into convertible bonuses into bets – can bring greater confusion to this distinction, but it is certain that confusing betting with consumption can bring more obstacles than solutions, even for gamblers who feel harmed.
Pedro Simões
Coordinator of the Corporate Criminal and Compliance Team at the Duarte Garcia, Serra Netto e Terra office and educational director of the Institute for the Prevention of Money Laundering and Combating the Financing of Terrorism (IPLD).
Source: Exame
