Several topics draw attention and present doubts to jurists involving the digital economy and its intersection with the most varied branches of law. At the end of 2022, we published an analysis on criminal prosecution, regulation and practical challenges of crypto-assets in the Revista do Conselho Nacional de Justiça.
In recent times, the issue of online betting has been taking up space in the media (and in the concern of jurists).
US newspaper The Wall Street Journal showed that the risk of financial crimes increases in proportion to online gambling. Europol carried out a survey on the involvement of organized crime in sports betting and the main findings point out that: technology facilitates activities; criminal organizations manipulate sports betting, consequently increasing money laundering; football is the most popular sport and tennis is growing. We understand that the risk is heightened when it goes to the virtual environment (little or zero regulation).
In Brazil, the Poder360 website showed that electronic sports betting moves BRL 100 billion per year. According to the newspaper O Globo, the activity grows 11.5% each year, and could reach up to US$ 127.3 billion in 2027. According to PL 845/2023, US$ 35 billion in sports betting was transacted during the 2022 World Cup.
Thus, this brief article will discuss the criminal challenges through comparative law, bills and legislation in force in Brazil.
Betting through virtual means is provided for in Law 13.756/18. Article 29 defines the lottery betting modality (called fixed quota) as a system related to real sports-themed events, authorized or granted by the Ministry of Finance and operated in a competitive environment, establishes that it will be an exclusive public service of the Union, and will be regulated by the aforementioned ministry in up to two years. Article 30 deals with the destination of the collection product in physical or virtual means, art. 31 of the incidence of income tax and art. 32 inspection fee.
Recent news shows that the Ministry of Finance is evolving in the elaboration of a Provisional Measure (PM) to overcome the lack of regulation.
Article 814 of the Civil Code provides: “gambling or betting debts do not require payment; but the amount voluntarily paid cannot be recovered, unless it was gained by fraud, or if the person who lost it is a minor or prohibited person.” In the international aspect, the Superior Court of Justice allowed a casino to collect gambling debts from a Brazilian when the debtor was in the country, based on article 9 of the LINDB (STJ –REsp 1.628.974-SP, Rel. Min. Ricardo Villas Bôas Cueva, j: 6/13/17, Third Panel, DJe 08/25/2017)
Pending the discussion of the applicability of said judgment when the bet is made by a resident/domiciled in Brazil on a website abroad that has no presence in the country, considering that games of chance are expressly provided for as a criminal offense.
DL 3,688/41 defines, in its article 50, as a misdemeanor “to establish or exploit gambling in a public place or accessible to the public, with or without payment of entry fee”, fines from R$ 2,000 to R$ 200,000 for those who participate and defines gambling as being “the game in which the gain and loss depend exclusively or mainly on luck; bets on horse racing outside the racecourse or where they are authorised; bets on any other sporting competition.”
Poker is not considered a game of chance, but a game of the mind, in view of the focus on intellectual dexterity, logical reasoning, emotional control of the players, among others. However, the 13th Chamber of Public Law of the TJSP maintained a monocratic decision authorizing the denial of a permit to establish a poker house (Appeal 1001861-28.2018.8.26.0081 Rapporteur Des. Isabel Cogan, j. 5/2/20, p. 6/2/20)
The Federal Revenue has already manifested itself for the levy of the IRPF in cases of receipt of amounts from bets on websites abroad, given the lack of an exemption rule for such income in Brazil, according to SC Cosit 61/18.
There are several bills on the regulation of betting. Bill 442/91, approved by the Chamber of Deputies in February 2022, is over 30 years old and does not expressly mention online betting. Pierpaolo Bottini points out that “the approved bill has a chapter on the prevention of money laundering, which imposes a series of obligations on gaming operators, such as the implementation of betting and risk assessment procedures, and the communication to Coaf of suspicious and atypical operations.”
Such a chapter can also be used for online betting operators. Bill 600/2023 prohibits the offer of games not expressly authorized by law; exclusion from the market of companies that entice athletes, referees and coaches to commit fraud; allocation of resources to mitigate social damages and improve inspection and control and stipulation of limits to publicity, advertising and sponsorship actions; Bill 845/2023, has measures to explore betting such as the payment of BRL 20 million to the Brazilian State for a five-year authorization and the obligation of advertising for “Responsible Gaming”; Bill 2350/22 requires a warning in bookmakers, poker, lotteries, among others, in which randomness and luck factors define the final result, even if there is some kind of skill or knowledge on the part of the player or bettor.
Australia is an interesting case study of online gambling as it has banned the provision of non-government licensed online casinos and sports betting since 2001 through the Interactive Gambling Act. In 2017, the legislation underwent a reform that also sends references of directors of companies that do not comply with the legislation to the Australian authorities (which can harm them in obtaining a visa to enter the country, for example).
There is also a list of those licensed to operate in Australia and guidance on how the industry can follow the rules. The government estimates that since the changes around 180 online betting operators have left the Australian market. This experience can serve as a model for Brazilian authorities seeking to regulate the sector.
The difficulty in criminal prosecution with the virtual world and with transnational issues faces challenges in the most diverse spheres, whether it be the location of the bettor and the betting site, identification of a possible crime of money laundering and responsible persons, competent jurisdiction for criminal prosecution, location of the laundering product, among others. The prosecution of those who use gambling in a casino for money laundering has become more complex.
Thus, it is essential to regulate the activity – the Australian experience serves as an inspiration – which must be accompanied by international cooperation and national articulation between the Powers of the Republic.
Salise Sanchotene
PhD in Public Law and Legal Philosophy from the Universidad Autónoma de Madrid. Judge of the Federal Regional Court of the 4th Region (TRF4) and counselor of the National Council of Justice (CNJ)
Doris Canen
LLM in International Tax Law from King’s College London (Chevening Scholar)
