On December 30, 2023, President Lula sanctioned Law 14.790 to regulate fixed-odds betting (popularly known as "sports betting" or "bets"), a measure that was eagerly awaited by the market, especially after the issuance of MP No. 1.182/2023.
Now in effect, the new law establishes the contours for the exploitation of this public service and provides general guidelines for the effective start of the activity.
Among them is the nature of how authorization will be granted by the Ministry of Finance; the requirements for its exploitation; general advertising rules; mandatory adoption of policies promoting prevention of gambling addiction and money laundering; a fixed grant value to be paid by each operator; means of payment for bets; taxation of prizes; infractions and their respective penalties; it states that "fantasy sports" do not constitute a lottery modality, and it also promotes changes in Law No. 13.756/2018, regarding other lottery modalities, and in Law No. 5.768/71 (which regulates the free distribution of prizes through drawings, scratch cards, or contests).
However, some specific points draw attention. The first is the pending part of the regulation necessary for the effective implementation of "bets": general requirements for private partner participation in the delegation offered by the State have not been defined, nor have the requirements and guidelines to be observed by operators when formulating policies for preventing money laundering, match-fixing, terrorism financing, guidelines for ombudsman and customer service, warnings about the risk of ludopathy, and requirements for monitoring the activities of bettors to identify potential harms associated with gambling.
So far, only the National Council for Advertising Self-Regulation (Conar) has issued regulations (Annex X of the Brazilian Self-Regulation Advertising Code) specifying the rules to be followed regarding the advertising of bets, especially focusing on the need for special care in protecting children, adolescents, and vulnerable individuals.
The Annex highlights the organization's concern with the content of advertising about bets, especially to ensure they are socially responsible. Although the provisions may seem overly abstract (which may be due to the novelty of the topic), Conar's recommendations are noteworthy, especially given the care that the "advertising" theme will have to be treated from now on.
Law 14.790/23 also prohibits payment institutions from allowing fixed-odds betting transactions by legal entities that have not received authorization to operate this service under the terms of the law in force and establishes the need to adopt secure mechanisms to verify the bettor's identity, validate bets, and monitor suspicious activities.
The last point that raises a red flag is the amendment made to Law No. 13.756/2018 to include "art. 35-A", which deals with the possibility of States and the Federal District exploring all lottery modalities provided for in federal legislation. The new addition prevents the same economic group or legal entity from exploring more than one concession, limiting it to one State or the Federal District. It also prohibits multi-jurisdictional exploitation of state or district lotteries.
These recent changes do not appear beneficial for the Public Administration, the operator, or the end-user of the service for several reasons, starting with the decrease in competitiveness in state and district concessions – operators will now select which ones are more interesting to participate in. These provisions – which unfortunately were not subject to veto – will undoubtedly generate heated discussions, not only in the legislative sphere but also in the judiciary.
Danielle Franco
Master's student in Public Law at FGV-SP and head of the Administrative Law area at GVM Advogados
Anna Anastasia
Specialist in Administrative Law from PUC-MG and associate lawyer at GVM Advogados
