Expanding, they moved R$ 54 billion (US$ 10.9bn) between January and November 2023. The topic has been addressed by legislators for some time and was ultimately regulated by Law No. 14,790. The Legal Framework for Betting updates regulations on betting activities and lotteries and addresses the use of digital technology in this market.
In this betting environment, it is essential that platform operators and institutions responsible for enabling the execution of betting payments and eventual prizes through electronic channels adjust their procedures.
The legislator was concerned with providing transparency and security to the bettor. Payment operations to unlicensed platforms are prohibited. Institutions and payment arrangement organizers cannot carry out transactions related to betting with entities not authorized to operate in this market.
This prohibition is not automatic and is subject to a transition rule, which establishes that the prohibition will occur within a period defined by the Ministry of Finance, not being less than 90 days from the start of operator accreditation.
Offering transactional accounts or financial services that allow movements by the bettor in a graphic account before the platform and the receipt of prizes is exclusive to institutions authorized by the Central Bank. Only institutions qualified to operate in payment methods will offer payment solutions in betting environments.
The funds of bettors held in transactional accounts before the platform will be treated as separate assets and cannot be confused with those of the platform. These funds do not serve as collateral nor do they respond to platform debts; they are immune to seizure and confiscation due to platform debts. Neither bankruptcy nor judicial recovery of the platform will impact these values.
The platform must have a system for identifying bettors through facial recognition, allowing for obtaining, verifying, and validating the authenticity of bettor information. These systems and procedures must be capable of monitoring bettor financial transactions in order to identify damages associated with gambling practices. Monitoring will consider the bettor's exposure, expenditures, and gambling behavior indicators.
The analysis of bets to detect suspicions of money laundering and terrorism financing will be essential; those that effectively reveal criminal characteristics must be reported to the Financial Activities Control Council (Coaf).
Correctly, the platform cannot financially facilitate bets. It is illegal to advance funds, provide bonuses, or give advantages to the bettor. The law prohibits platforms from entering into agreements and partnerships with financiers in order to carry out merchant funding operations or open credit to finance bets. Not illegal practices that, directly or indirectly, give bettors access to credit.
The social good sought by the payment rules is the protection of bettors against situations of over-indebtedness and disturbances resulting from gambling addiction. In any case, between entertainment, business, regulation, and tax collection, the new regulated Brazilian betting market is consolidating itself as one of the most active and profitable.
Fabio de Almeida Braga
Lawyer and partner in the banking and financial area at Demarest Advogados
