Online sports betting has been rapidly growing around the globe, reaching not only established markets such as the United States and the United Kingdom but also expanding to developing nations, including Brazil.
In Brazil, enthusiasm for sports, especially football, is a tradition, which significantly contributes to the interest and participation in sports betting.
A study conducted by SimilarWeb identified that betting sites generated 14.2 billion hits worldwide in 2022. Brazil tops the list with 3.2 billion hits, almost 25% of the total indicated in the survey.
Most sports betting in Brazil takes place online, with a significant presence of international sports betting sites that accept players from Brazil.
Until recently, sports betting was considered as a “gambling game" and therefore an illegal service, for which it was not possible to apply for a trademark registration before the Brazilian Patent Trademark Office – “INPI”.
In 2018, through Law 13.756/2018, sports betting became legal in Brazil, but still in a very embryonic way.
Law No. 14.790/2023, also known as the Sports Betting Law, came into force on December 30, 2023, and modified Law No. 13.756/2018, establishing a new legal framework for the operation of fixed-odds betting in the country, the so-called sports betting.
Law 14.790/2023 establishes the bases for the operationalization, detailed regulation of sports betting, both in physical and online environments, as well as tax, inspection, anti-fraud, player protection and social impact aspects.
Among the main conditions for operating in the betting market, being legal entities incorporated under Brazilian law is the most relevant for international players. It is also mandatory for the company to be resident in the country. Foreign companies may be authorized to operate fixed-odds lotteries by setting up a subsidiary in Brazil.
Permanent or fixed-term licenses/authorizations must be requested from the regulatory authorities, with the submission of a series of documents and information demonstrating compliance with all the criteria and requirements established by Law 14.790/2023, such as constitution, financial, technical, and ethical.
The Law 14.790/2023 is in the regulation phase. The Brazilian Ministry of Finance has established a schedule for the implementation of measures, which will occur by the end of the first semester of this year. Still in the first phase of execution (which will take place in 4 phases), the Brazilian Ministry of Finance expects the publication of ordinances until the end of April establishing the general rules to be observed by the payment methods, technical and security requirements of the betting systems used by the operating agents for the exploitation of the lottery modality, and the rules, conditions, and opening of the procedure for the application for the authorization for the commercial exploitation of fixed-odds betting throughout the national territory.
For now, the available regulations impacting the operation of sports betting concern the payment methods and advertising means. Regarding payment methods, the rule issued by the Ministry of Finance determines, among other criteria, that the payment of financial resources by bettors, as well as the payment of prizes by operating agents, must be carried out exclusively through electronic transfer (PIX, TED, debit cards or prepaid cards, and book transfer, in the case of accounts held at the same institution) between a registered account of the bettor and the transactional account of the operating agent, both maintained at financial institutions or payment institutions authorized to operate by the Central Bank of Brazil.
It is also forbidden for the operating agent to accept financial contributions through cash, payment slips, crypto assets, credit cards, or any other post-paid instruments or any other alternative form of deposit that may hinder the identification of the source of the funds and as a prudential measure to discourage indebtedness among Brazilian families. Regarding advertising means, the National Council for Advertising Self-Regulation (CONAR) has established rules to regulate advertising related to sports betting in Brazil. These guidelines aim to ensure that advertisements are presented truthfully and to prevent the promotion of unrealistic expectations or the encouragement of excessive gambling. They also emphasize responsible gambling practices and prohibit targeting children and vulnerable individuals.
Brazil's goal, based on international best practices, is to establish a healthy market for all players. From the bettors' point of view, the intention is to avoid compulsive gambling and exposing the public to fraud through a strong monitoring system, which will generate benefits for companies, government, and players.
With the regulation of the commercial exploitation of the "betting market" in Brazil, the market becomes safer and more attractive, creating a competitive environment as new commercial opportunities open up.
In this scenario, the expectation is that companies will create strong and distinct trademarks, so that to become prominent in this competitive market, which, naturally, will result in a race for brand registrations at the INPI.
From the point of view of the Industrial Property Law - LPI (Law No. 9.279/96), it is worth remembering that any visually perceptible distinctive sign can be registered as a trademark at the INPI, as long as it is not included in the legal prohibitions.
In the context of legal prohibitions, trademark applications aimed to identify products and services considered illegal in Brazil must be rejected by the INPI on the basis of article 124, III of the Industrial Property Law – IPLaw (Law No. 9.279/96), which prohibits the registration as a trademark of "expressions, figures, drawings or any other signs that are contrary to morals and standards of respectability or that offend the honor or image of persons or attempt freedom of conscience, belief, religious cult or ideas and feelings worthy of respect and veneration", as well as article 128, §Paragraph 1 of IP Law, which states that "Persons under private law may only apply for registration of a mark that relates to the activity in with they actually and lawfully engage, either directly or through companies they directly or indirectly control, declaring that condition on the application itself, under the penalties of law ".
Historically, trademarks that sought to identify betting services in Brazil were undoubtedly rejected by the INPI. Currently, with the advent of laws regulating the matter, it is noted that, for most of the cases, the INPI publishes the following office action:
“Provide clarification regarding the services claimed on the TM filing application, taking into account the legislation on the exploitation of gambling game/game of chance in force in the country, as well as the provisions of §1 of art. 128 of the IPLaw. Alternatively, submit a specification deleting the items mentioned or replacing them with services compatible with the class claimed and considered lawful under the legislation in force on the date of this requirement.” (underlined emphasis added – Application # 926129660, claiming “provision of online gaming services [computers]; Gambling or betting services” – Office action published on 20FEV2024).
Against this decision, it would be possible to comply with the office action, restricting the services of "games of chance or betting" to only "sports betting services", without failing to draw the INPI's attention to the new law in force regulating sports betting services in the country.
The problem is that, despite the fact that the commercial exploitation of sports betting has been legal in the country since 2018 (although only regulated in 2023), INPI’ examiners still don't seem to be completely familiar with the subject, in addition to the fact that there is still no formal guideline from the Trademark Board of Directors on the subject, leaving a track of contradictory decisions at the administrative level. For no other reason, decisions such as the one below, published on 07MARCH2023, are not uncommon:
“Clarify whether wishing to keep the item "Online betting", which is considered illegal under Brazilian law, or whether choosing to replace it with other items that do not fall under this condition. Please note that trademarks containing lottery services can only be filed by Caixa Econômica Federal (a Brazilian Federal Bank). However, the NCL's Auxiliary List of Services(11) includes the legal service of "selling lottery tickets", which can be requested if a change in specification is desired.
As for "betting in general" services, be advised that with the exception of betting on horse races, the service is illegal, according to art. 50 of Decree Law 3688/41”’ (underlined emphasis added – Application # 925652865, claiming “organization of competitions [education or entertainment];organization of sports competitions; provision of online, non-downloadable electronic publications; provision of services for electronic games; provision of services for online games [computers];entertainment services; award services; organization of electronic sports competitions; organization of entertainment events; organization and presentation of sports events; electronic sports services; online betting games” – Office action published on 07MARCH2023).
Of course, undue decisions can always be appealed, and despite the subject not being scheduled on the regulatory agenda of the INPI for the biennium of 2024/2025, we know that the INPI has been working to avoid controversial decisions. In contact with the INPI, we were informed that, in order to avoid office actions or rejections, it is necessary that the application be claimed only to "sports betting" or "betting service (only sports betting)", in class 41.
Fair enough! The regulation of sports betting in Brazil brings the need for companies to legalize an activity that, until then, operated in an environment of uncertainty or through international platforms, and this includes applying for a license or authorization with the Ministry of Finance (MF), as well as the trademarks protection through the INPI, as well as to other regulatory aspects.
The process of obtaining authorization to operate in the Brazilian betting market, as well as registering the corresponding trademarks, can be complex and requires careful preparation and daily updates, including, in many cases, a review of trademarks portfolio strategies and regulatory authorization, as well as a consultation with local experts.
Considering these guidelines, players in the Brazilian betting market can not only successfully navigate the regulatory and operational environment, but also contribute to the ethical growth of the sector in the country. The key to success involves combining the legal aspect with technological innovation, marketing and a commitment to social responsibility.
