In a historic moment and a tight legislative debate, the Senate's Constitution and Justice Commission (CCJ) approved Bill No. 2,234/2022. The matter will now be considered by the Plenary of the Legislative House. If there are no changes to its text, the Bill will be sent for presidential sanction. Should any alterations be made during the plenary session, the Bill will return to the House of Representatives for reconsideration in its House of origin.
Organized into more than 120 articles, the Bill is very proactive in allowing the practice of gambling throughout the national territory, but in a regulated and structured manner. Gambling, also known as games of chance, are those whose results for the player or bettor depend exclusively or predominantly on the element of luck. They differ, therefore, from skill-based practices, such as fixed-odds betting, which is already regulated, and poker.
Taking another step in the regulation of gambling in the country, the bill proposes the express repeal of Article 50 of the Law of Criminal Misdemeanors, which classifies games of chance as a criminal offense. It authorizes the practices as long as they are carried out in accordance with the law.
This makes the assessment of the legality or illegality of a particular game more objective, which previously (and still today) depended on a specific predominance test of each initiative to determine whether it was skill or chance (luck). Furthermore, if the contravention provision is revoked, many discussions about the personal criminal liability of leaders and investors in such practices will be overcome, bringing greater security to those who participate in the sector.
If approved, the Bill will completely change the legal landscape of gambling in the country, adding to the regulation brought by the Fixed-Odds Betting Law (Federal Law No. 14,790/2023) and ongoing regulation by the Ministry of Finance. It comes at a good time, as the industry has been preparing to operate under the new regulatory frameworks.
The sum of these legal frameworks aims to bring legal security to Brazil regarding the matter, conceptually defining which practices are authorized and, above all, how they can be exploited. This is essential for developing a proactive path for investments, job creation, lawful circulation of resources, and tax collection. Any legislation that comes to provide definitions and consider a relevant industry can be seen in a positive light.
In this context, it is interesting to note that many of the requirements that already need to be met by fixed-odds betting operators are also present in the new project for games of chance. This brings security and facilitates investments, creating an almost unique framework of what needs to be followed in a clear and standardized way that every entrepreneur demands for the safe scalability of their business.
This group of common themes includes, for example, provisions on advertising, responsible gambling, and governance and prevention measures that need to be adopted. From the experience with companies operating fixed-odds betting (bets) and even in evaluations and due diligence stages of M&A, it is possible to see how a clear legal path of what needs to be done is fundamental for the business.
It is also worth mentioning that M&A activities themselves will certainly have a very positive impact from the new regulation. Whether due to the growth of investments in Brazil or because it is a clear incentive for the launch of new companies or for companies to raise funds for their development.
Particularly for investors, clear regulation and more assessable risks are essential. Unlike what is seen abroad, the Venture Capital market in Brazil in relation to iGaming activities has not yet explored its full potential. The legalization of games of chance will certainly be a driving force for the sector, requiring a careful and dedicated look at the new regulatory and compliance metrics.
Maurício Tamer
Lawyer in the Digital Law and Data Protection area at Machado Meyer Advogados
