Currently, the iGaming sector has been increasingly prominent, representing a significant and growing portion of the entertainment market. In light of this reality, at the end of 2023, Brazil witnessed a significant milestone for the sports betting industry with the approval of Law 14,790/23.
This legislation established a long-awaited scenario for fixed-odds sports betting in the country. To fully understand the impact of this regulation, it is important to go back in time and explore the events that led to this achievement.
In 2018, Brazil took the first steps towards the legalization of sports betting. At that time, Brazilian legislation recognized the importance of this sector and set a four-year deadline for the government to regulate the activity. However, the said time passed without any effective regulation being implemented.
Drawing on examples from countries like the United Kingdom and the United States, which have well-established regulatory systems for this sector, Brazil, under the current federal administration, implemented significant measures within just one year of its term to fill this gap.
The approval of Law 14,790/23 was a milestone, demonstrating a commitment to improving the fixed-odds sports betting market in the country, ensuring its reliability through the implementation of transparent and clear rules, and eliminating any form of prejudice regarding the exploitation of this activity.
In this context, the private sector began the regularization process with the Ministry of Finance, seeking recognition of its practices and demonstrating interest in adhering to the norms to ensure the smooth functioning of the sector.
A novelty brought by the legislation is the recognition of bettors as end consumers of the product. With this change, in addition to the requirement that operators have prompt customer service channels to resolve possible conflicts, bettors now have access to protection mechanisms, such as Consumer Protection Agencies and the Judiciary, as per the Consumer Protection Code. This ensures respect for the rights of both parties, promoting even more security and confidence.
The regulation established significant guidelines for advertising, including targeting adult audiences and requiring operators to refrain from promoting gambling as a means of employment or enrichment.
It is also important to note that Law 14,790/23 brought, as an innovation, concern about pathological gambling, recognizing its potential negative impacts on society, such as financial, social, and mental health problems. In light of this, it required operators to implement measures to prevent this type of gambling.
Regarding penalties, operators who violate the regulations will face strict sanctions, including fines of up to R$ 1 billion (US$ 200m). This decisive approach aims to maintain the integrity of the sector.
As for the inherent tax issues, the regulation stipulates taxation and an authorization fee of R$ 30 million (US$ 6m), funds that will be allocated to promote the development of sports and the industry in Brazil. This measure not only ensures fiscal compliance in the sector but also represents a significant investment in promoting and strengthening the country's sports and industrial sectors, enhancing opportunities for growth and economic progress.
In summary, with these considerations, we believe that Law 14,790/23 is a significant milestone for sports betting in Brazil, bringing clarity, reliability, and protection for all involved.
Daniel Sitônio
Legal Director of Vai de Bet
