The approval of Law 14,790/23 has stirred the betting market in Brazil, especially with the approaching opening of the regulated market. However, many questions have arisen, including whether betting on eSports will be allowed.
Law 14,790/23 introduced two types of permitted bets: (i) those of a sporting nature, and (ii) those on online games.
Bets on eSports do not fall under the second category of online games, as according to Article 2, Clause VIII, this type of game has its result determined by randomness, which is definitely not the case for eSports, where victory or defeat comes from the skill, strategy, and performance of the competitors.
As for sports betting, a more detailed analysis is required.
Article 2, Clause VII, deals with sports betting, which involves bets on real events with a sports theme. The clause itself clarified that such events are "sports competitions, tournaments, games, or tests, individual or collective (...), whose result is unknown at the time of the bet."
So far, so good. In eSports, the result of games and competitions is completely unknown at the time of the bet.
However, in its subparagraphs "a" and "b," Clause VII introduces two conditions for bets to occur:
a) that the event be promoted or organized in accordance with the rules established by the national sports administration organization, as provided for in Law No. 14,597/23 (General Sports Law), or by its affiliated organizations; or
b) by sports administration organizations based outside the country.
But what is a sports administration organization? The answer to this question is contained in Article 16 of Law No. 9,615/98 (Pelé Law).
This provision clarifies that sports administration organizations are "private legal entities, with autonomous organization and functioning, [with] competences defined in their bylaws or articles of association."
The provision does not define what the corporate purpose of these entities should be, but considering their purpose, it seems clear that it should encompass activities related to the organization of sports, such as formatting and ensuring the realization of sports events.
Therefore, it is possible to have bets on sports events that are organized and regulated by associations, federations, and even companies, as long as they have defined the organization, formatting, or coordination of sports events as their corporate purpose.
eSports have organizations in Brazil and worldwide. The games have well-defined rules, involve a high degree of competitiveness among participants, and there are periodic competitions, including those with high prizes awarded to the winners.
Publishers - responsible for the publication and promotion of these games - often take on these responsibilities. Internationally, there are entities such as ESL, which is an organizer and producer of global esports tournaments, the International Esports Federation (IESF), a global esports organization based in South Korea, and the Esports Integrity Commission (ESIC), a commission that also performs functions similar to those of a sports administration organization.
In Brazil, it is no different. A publisher like Riot coordinates the Brazilian Championship of League of Legends (CBLOL). Garena, another publisher, performs a similar function for the Brazilian Free Fire League (LBFF); Ubisoft organizes Rainbow Six (R6); Electronic Arts, for years, did the same with the FIFA soccer game. There are also independent organizers in Brazil (such as Liga NFA for Free Fire, Liga GG, an organization for League of Legends and Valorant competitions, and so on).
Sometimes, in the world of eSports, the same organizations that administer traditional sports are found, as is the case in Brazil with the Brazilian Football Confederation (CBF), which now administers the eBrasileirão, and the São Paulo Football Federation (FPF), which has organized soccer competitions via PlayStation.
Similarly, abroad, the International Federation of Football (FIFA) organizes the eNations Cup. Formula 1 organizes competitions through the licensed game (F1 23), and the NBA, the North American basketball league, coordinates competitions through the NBA 2k game.
Therefore, eSports have entities that may not be exactly like traditional sports administration organizations, as their reality and needs are different. However, for the purposes of Article 2, Clause VII, subparagraph "a" of Law 14,790/23, all these mentioned entities are similar to sports administration organizations.
The legislator, in the final part of subparagraph "a" of Clause VII of Article 2 of Law 14,790/23, establishes only that if the entity is Brazilian, it must follow the guidelines of the General Sports Law. Compliance with the General Sports Law does not extend to international entities.
Regarding the General Sports Law, when addressing sports administration organizations, it establishes in Article 26, §2, that the entity must take care of the administration and regulation of sports, which, as a rule, is done by leagues, federations, and publishers related to eSports.
The General Sports Law in Article 94, sole paragraph, establishes that the assignment or negotiation of economic rights of athletes must be governed by the specific regulations of each sports administration organization. Also related to the topic, Article 95, §3, provides that entities must oversee the exercise of the sports agent's activity and inform the Federal Revenue Service and the Ministry of Finance of all values involved and paid in the assignment and transfer of athletes. The Annex to the General Sports Law also states that the sports administration organization will be responsible for disclosing athlete rankings.
As seen, the provisions contained in Articles 94 and 95 and in the Annex to the General Sports Law relate to the attributions of sports administration organizations related to athletes. However, Article 16, §3, of the Pelé Law merely allows these entities to affiliate athletes, so if this does not happen, unless there is a better opinion, they are exempt from such attributions.
Thus, none of the guidelines brought by the General Sports Law prevents the recognition of eSports as sports at the national level. On the contrary, the provisions contained in this legislative text, associated with the provisions established in the Pelé Law and Law 14,790/23, lead to the conclusion that in the current configuration of electronic sports in Brazil and worldwide, we are facing organizations comparable to those of traditional sports administrators.
Some questions may persist. Does the Ministry of Sports recognize electronic sports as sports?
The answer is no, just as it does not recognize soccer, volleyball, basketball, or swimming as sports. The Ministry does not declare or attest to the nature of an activity. The acceptance of an activity as a sport occurs due to social recognition. Therefore, the lack of formal recognition by the Ministry of Sports that eSports are not sports is not a demerit for the modality but something normal that happens with all other sports, even the most traditional ones.
It can also be questioned whether eSports would effectively be sports events subject to betting, given the definition brought by Article 2 of the General Sports Law, which considers sports "any form of predominantly physical activity that, informally or organized, aims at the practice of recreational activities, the promotion of health, high sports performance, or entertainment."
The point to observe is that the General Sports Law, as the name itself says, is general; therefore, it only applies to an activity if there is no specific rule about it. Sports betting has specific laws (Law 13,756/18 and Law 14,790/23), so their application will be subsidiary when the special rule makes reference to it or is silent on a certain topic.
In this case, Law 14,790/23 provides guidelines and defines what sports events subject to betting are. This is clear in the reading of Article 2, Clause VII, of Law 14,790/23, which provides a definition of real events with a sports theme. Therefore, the guidelines provided in this law prevail, and there is no need to resort to the General Sports Law in this regard.
The legislator, when he wanted the guidelines to be imported from the General Sports Law, did so clearly, such as when he determined that national sports administration organizations observe what is established about them in the General Sports Law.
Returning and concluding our analysis with the question asked initially in the article's title: is it worth betting on eSports? The answer is yes. Obviously, it is necessary to analyze each case to understand if the game is effectively linked to an entity that qualifies as a sports administration organization. But the definition, as we indicated, is broad and, in general, conforms to the reality of electronic sports, its leagues, federations, and publishers, whether they are in Brazil or abroad.
Rafael Marchetti Marcondes
Chief Legal Officer at Rei do Pitaco, president of the Brazilian Association of Fantasy Sport (ABFS), legal director of the Brazilian Institute of Responsible Gaming (IBJR), and director of government relations of the Brazilian Association for the Defense of Sports Integrity (ABRADIE)
