The Secretariat of Prizes and Betting (SPA) of the Ministry of Finance published, in early August 2024, two Ordinances; No. 1,225 and No. 1,233, which deal with rules regarding the inspection and sanctions applicable to fixed-odds betting operators. It is important to highlight that these Ordinances come into force as of January 1, 2025.
Ordinance No. 1,225 deals with the inspection and monitoring of fixed-odds betting and their respective operating agents. On the other hand, Ordinance No. 1,233 establishes the rules for the sanctioning process within the scope of the commercial exploitation of this modality.
In other words, Ordinance No. 1,225 assigns the SPA the authority to inspect betting, also allowing collaboration with other public bodies to monitor activities and ensure compliance with legal standards.
It should be noted that the purpose of the regulation is to monitor the activities of individuals or legal entities that are not duly authorized by the SPA to operate the fixed-odds modality.
The Ordinance differentiated monitoring from inspection: while monitoring must be carried out continuously and systematically by the SPA, inspection must be carried out in a scheduled manner. It should not be forgotten that, at the end of each inspection, the SPA must issue a detailed report, containing the actions taken, the analyses performed and the proposed referrals.
The SPA was also provided with the possibility of periodically accessing data and information within the scope of monitoring and inspection actions through the Betting Management System – SIGAP or any other system that may replace it.
In addition, the Ordinance included coercive and precautionary measures, which may be applied before the initiation or during the processing of the administrative sanctioning process. However, for these measures to be applied, the requirements of likelihood and risk of delay must be met, as provided for in our legal system.
These measures include:
(i) temporary deactivation of instruments or similar devices;
(ii) temporary suspension of prize payments; and
(iii) withdrawal of tickets issued. In cases where evidence of violations is identified, the SPA must initiate administrative sanctioning proceedings for investigation, which were regulated by Ordinance No. 1,233.
Ordinance No. 1,233 stipulated the violations that would be punishable in the field of fixed-odds betting, including the dissemination of advertising or commercial propaganda by unauthorized operators, the obstruction of inspection by the Prizes and Betting Secretariat of the Ministry of Finance, and the execution of practices that undermine sports integrity, among others.
It should also be noted that the sanctioning procedural process was provided for, which must be initiated, instructed and analyzed by the SPA and, subsequently, forwarded to the SPA's Sanctioning Action Sub-Secretariat for a decision, against which the interested party may appeal.
In addition, item II of art. 29 was included, which establishes the value of the fine for legal entities, set between 0.1% (one tenth of a percent) and 20% (twenty percent) on the proceeds of the collection, after deducting the amounts mentioned in items III and V of the caput of art. 30 of Law No. 13,756/2018.
It is important to note that this calculation must consider the fiscal year prior to the initiation of the administrative sanctioning process, and the fine cannot be less than the benefit obtained, when it is possible to estimate it, nor more than R$2,000,000,000 (two billion reais) per violation. But that is not all, the Ordinance included penalties of a) cancellation of the authorization and b) prohibition from participating in public bidding processes, both of which are already being considered by the sector, since such rules already exist for other sectors.
Regarding the deadline for presenting the defense, a period of 30 (thirty) days was stipulated for the filing of the administrative proceedings, a period that is longer than that normally practiced by other regulatory bodies.
Our team at Salis Advisory remains available to clarify any additional questions.
Rodrigo Pedrosa Nholla
Partner at Salis Advisory, financial consultant and former Director of the Procon Foundation of the State of São Paulo. Former Member of the Technical Chamber for Supplementary Health of the Court of Justice of São Paulo, Former Advisor to the Consumer Relations Committee of Elektro, Former Director of Contracts and Tenders of the Secretariat for Green and Environment of the City of São Paulo, Partner at Salis Advisory, a financial consultant.
