Created in January 2024, the Prizes and Bets Secretariat (SPA), an agency linked to the Ministry of Finance, has the difficult—but unavoidable—task of regulating the operations of sports betting platforms, locally known as "bets," and online casinos in Brazil.
Although the lottery modality of fixed-odds betting (where the player knows the multiplier that will be applied if their bet is successful) was created back in 2018, at the end of the Temer administration, it was only in 2023, with the enactment of Law No. 14,790, that Brazil established a regulatory framework for online gaming and betting.
By this time, the fever had already spread: among the 20 teams that competed in Serie A in 2023, 19 were sponsored by betting houses. Around the stadiums, they also occupied the billboards, and even during the breaks, there were frequent ads on television, always featuring sports idols.
To attract those who do not like football, they attacked from another flank: instead of sports betting, some of the biggest digital influencers in Brazil used their social media to showcase gambling games such as "Aviãozinho" and "Tigrinho."
The result was obvious: Brazil became the country with the highest number of accesses to gaming and betting sites, with almost double the number of accesses than second place, the United Kingdom. According to Datafolha, 15% of Brazilians report making or having placed online sports bets, a percentage that doubles among young people aged 16 to 24.
Faced with the challenge of regulating a market that moved around R$54 billion (US$ 10bn) in 2023 alone, the SPA showed agility and good adaptability. In just three months, the Secretariat had already published about ten ordinances for the sector, addressing thorny issues such as establishing rules and conditions for companies wishing to operate in Brazil, transaction and payment rules, and the procedure for recognizing certifying entities.
In the same period, responding to a request from the Minister of Finance, Fernando Haddad (PT-SP), the SPA coordinated with Congress members to approve a 12% tax on companies and a 15% tax on winnings above R$2,259.20 (US$ 422) received by bettors.
Meanwhile, the SPA also established a partnership with the Ministry of Sports and the Attorney General's Office (AGU) to analyze requests for authorization to operate fixed-odds betting.
Additionally, working with Conar, they helped draft Annex X of the Brazilian Code of Advertising Self-Regulation, setting guidelines for the advertising of betting houses.
With less than a month's delay, the Secretariat has already achieved all the objectives outlined for Phase 1 of its Regulatory Agenda established in Ordinance SPA/MF No. 561/2024: an efficiency that rivals regulatory agencies with larger budgets and bigger teams.
However, according to the Agenda, the SPA will still have to tackle thorny issues in 2024, such as preventing money laundering and terrorism financing, establishing basic player rights, and promoting responsible gambling—a topic of great importance to all involved in the sector.
Challenges
The challenges of regulating gaming and betting are not limited to Congress or the Ministry of Finance.
Earlier this month, six states and the Federal District filed a direct action of unconstitutionality (ADI 7640), challenging two paragraphs of Article 35-A of Law No. 13,756/2018.
Paragraph 2 establishes that an economic group may only obtain one license from one state or the Federal District; and Paragraph 4 states that the commercialization and advertising of state lotteries must be restricted to individuals physically located within the jurisdiction of that state, thus preventing state lotteries from exploiting services beyond their jurisdictions.
Adding to the conflict between federal entities is the fact that federal legislation is silent—neither authorizing nor prohibiting—on the possibility of municipalities also granting licenses to entities to provide lottery services.
In light of this legal vacuum, some municipalities such as Porto Alegre/RS and Guarulhos/SP implemented their municipal lotteries, basing their creation on excerpts from the decision proclaimed by the Supreme Federal Court in the judgment of ADPFs 492 and 493 in 2020.
In the end, it must be recognized that between December 2023 and May 2024, the federal government, particularly the Secretariat of Prizes and Bets, has made significant strides towards regulating a relevant economic activity, which had been exploited without any return to the treasury or the Brazilian population. Today, it is possible to say that the game has changed.
Alessandra Margotti
Doctor and Master in Law from UFMG, partner at Margotti Advocacy, and consultant in compliance with privacy and personal data protection (LGPD)
Carlos Almeida José
Master in Regulatory Law from IDP/Brasília and associate lawyer at Margotti Advocacy
