Gaming Law 2024 Comparisons

Brazil is the largest and most populated country in Latin America, with a total area of 3,265,080 square miles and a population of more than 212 million people (it is the fifth largest country in the world in terms of size, and the seventh in terms of population). Brazil is a federation divided into 26 states, one Federal District and 5,570 municipalities.

Almost all gambling activities have been prohibited in Brazil for over 75 years. In Brazil, gambling does not have a legal definition. Instead, Decree-Law No 3,688/1941 (the “Misdemeanours Law”), drafted with the intention of preserving social morality, provides in Article 50 for:

• the prohibition of “games of chance”, punishable with imprisonment for three months to one year; and
• a fine for those who establish or carry out games of chance in a public place or place accessible to the public, by means of the payment of an entry fee or otherwise.

There are three definitions of “game of chance”:

• a game in which the winnings and the losses depend exclusively or mainly on chance;
• bets on horse racing outside a racetrack or where they are authorised; and
• bets on any other sporting competition.

Since the general ban on games of chance in 1941, the only legal gambling activities were:

• the lotteries under the state monopoly; and
• horse-race betting.

Recent Changes

After a gambling ban of more than 75 years, with a brief and failed attempt at regulation of bingo in the 1990s, Brazil has recently seen considerable development in terms of gambling activities.

Poker, although unregulated, is legal in Brazil, as it is considered a skill-based game. This understanding has been confirmed by several court decisions.

The opening of the Brazilian gambling market started with the creation of the virtual and land-based instant lottery (called LOTEX) by Law No 13,155/2015.

Law No 13,756/2018 created fixed-odds sports betting as a lottery modality, granting powers for the Ministry of the Economy to regulate it and to issue the respective licences. 2023 saw significant discussions concerning the regulation of sports betting, both at national and at state levels. By October 2023, three states – Minas Gerais, Rio de Janeiro and Paraná – had commenced sports-betting operations within their territories.

Also, in late October 2023, the Minister of Finance signed Normative Ordinance No 1,330/2023, establishing the general conditions for the commercial exploitation of the fixed-odds betting lottery, and regulating general rules regarding the matter. In late December 2023, Law No 14,790/2023 was enacted, regulating the lottery modality called fixed-odds betting and amending Law No 13,756/2018. According to Article 3 of Law No 14,790/2023, fixed-odds bets may involve:

• real events with a sports theme; or
• virtual events from online games.

In 2024, the Secretariat of Prizes and Betting of the Ministry of Finance (SPA), the entity empowered to regulate fixed-odds betting in Brazil, issued several ordinances as per Decree No 11,907/2024, including but not limited to:

• Ordinance SPA/MF No 615/2024, which establishes general rules for payment transactions in fixed-odds lottery betting;
• Ordinance SPA/MF No 722/2024, which establishes general rules for the functioning of betting systems and provision of data to the regulator in the operation of the fixed-odds lottery betting modality;
• Ordinance SPA/MF No 827/2024, which establishes the rules and conditions for obtaining authorisation for the commercial operation of the fixed-odds betting lottery modality by private economic agents throughout the national territory;
• Ordinance SPA/MF No 1,143/2024, which provides for policies, procedures and internal controls for the prevention of money laundering, terrorist financing and the proliferation of weapons of mass destruction (AML/FTP);
• Ordinance SPA/MF No 1,207/2024, which establishes technical requirements for the operation and certification of online games and live game studios that are among the betting objects of the fixed-odds lottery betting modality;
• Ordinance SPA/MF No 1,231/2024, which establishes rules and guidelines for responsible gaming and for communication and marketing actions, and which regulates the rights and duties of bettors and operators;
• Ordinance SPA/MF No 1,233/2024, which regulates the sanctioning regime within the scope of the commercial operation of the fixed-odds lottery betting modality; and
• Ordinance SPA/MF No 1,475/2024, which establishes the conditions for a company to participate in the transition period of the regulation for the operation of fixed-odds betting, and which sets the rules for the cessation of operations for companies that do not meet these conditions.

Sports Betting

Online fixed-odds sports betting was legalised by Law No 13,756/2018, and is regulated by Law No 14,790/2023 and by the specific regulation issued by the SPA in 2024.

Horse-Race Betting

Horse-race betting is regulated by Law No 7,291/1984 and Decree No 96,993/1988. Horse-race wagering is restricted to non-profit entities that own the racetracks, and that are duly authorised by the Ministry of Agriculture, Livestock and Food Supply. These entities may operate betting websites focused on horse-racing content.

Bingo

Online bingo is prohibited in Brazil.

Casinos

Online casinos are considered “online games” as described in Article 2, VIII and IX, of Law No 14,790/2023. As per Article 14, paragraph 2, fixed-odds bets that involve “online game events” may only be offered through virtual platforms.

Lotteries

The state-owned Caixa Econômica Federal currently runs the federal lottery and has recently launched a website to sell lottery tickets. All state-owned lotteries operating in Brazil are also authorised to offer their products online.

Poker

Poker has been recognised as a sport by the former Ministry of Sports, now the Secretariat of Sports, an agency of the Ministry of Citizenship. As a skill-based game, online poker is permitted. According to the sole paragraph of Article 3, I of Ordinance SPA/MF No 1,207/2024, skill-based games do not fall under the category of virtual events in online fixed-odds betting.

Fantasy Sports

Article 49 of Law 14,790/2023 expressly states that the development or provision of services related to fantasy sports does not constitute the operation of a lottery modality, commercial promotion or fixed-odds betting, and is exempt from requiring public authorisation.

Certain provisions of Law No 14,790/2023 are, however, applicable to fantasy sports, such as Article 31 regarding taxation of net prizes obtained by bettors from the fixed-odds betting lottery, which will be subject to Individual Income Tax (IRPF) at a rate of 15%. The sole paragraph of Article 3 of Ordinance SPA/MF 1,207/2024 stipulates that fantasy sports do not fall under the category of virtual events in online fixed-odds betting.

Social Gaming

Social gaming is not regulated in Brazil. It is permitted, provided that chance is not the sole or preponderant factor in determining the final result of the game, or provided that the players are not entitled to win prizes with monetary value.

Offshore Gambling Offering

Article 7 of Law No 14,790/2023 stipulates that only legal entities established under Brazilian law with headquarters and management located within the national territory, and which meet the requirements set forth in the regulations issued by the SPA, will be eligible for authorisation to operate fixed-odds betting.

In May 2024, Ordinance SPA/MF No 827/2024 set out an adjustment period for legal entities that were operating in Brazil at the time of the publication of Law No 14,790/2023, to comply with the applicable legal and regulatory provisions regarding fixed-odds betting lotteries.

Later, Article 2 of Ordinance SPA/MF No 1,475/2024, issued in September 2024, set out that only legal entities that have applied for a licence until 17 September 2024 are considered to be within the adjustment period starting from 1 October 2024.

Sports Betting

Land-based fixed-odds sports betting was legalised by Law No 13,756/2018 and is regulated by Law No 14,790/2023 as well as by the ordinances issued by the SPA and the Ministry of Finance (MF). Betting exchange is allowed and, as per Article 49 of Ordinance SPA/MF 1,231/2024, the betting operator is responsible for:

• providing, executing and settling the bets;
• crediting the prize amount to the winner’s account; and
• debiting it from the loser’s account.

Horse-Race Betting

Horse-race betting is regulated by Law No 7,291/1984 and Decree No 96,993/1988. Horse-race wagering is restricted to non-profit entities that own the racetracks, and that are duly authorised by the Ministry of Agriculture, Livestock and Food Supply. These entities may appoint agents to facilitate wagering on their behalf, and can also hire private suppliers, which are not subject to licensing or any specific regulation.

Bingo

Commercial bingos are prohibited in Brazil. In 2015, Law No 13,019/2014 was amended by Law No 13,204/2015 to include Article 84-B, which states that civil society organisations will be entitled to distribute, or promise to distribute, prizes – through sweepstakes, gift cards, competitions or similar operations – in order to raise additional resources for their maintenance or costs. Based on this provision, several “non-profit” bingo halls are operating in the country, but, according to SECAP’s understanding, these operations would need to have been previously approved by the Ministry of the Economy.

Casinos

Casinos are prohibited in Brazil. Article 14, paragraph 2 of Law No 14,790/2023 only allows fixed-odds bets that involve “online game events” (casinos) to be offered through virtual platforms.

Lotteries

Caixa Econômica Federal runs the federal lottery and has a network of over 13,500 agencies. Caixa Econômica Federal was granted control of the federal lottery following Decree No 50,954/1961, which cancelled all lottery licences granted to the private sector. State lotteries run by member states and the Federal District are legislated at subnational level, and therefore can be subject to diverse legal frameworks. At the time of writing (October 2024), sports betting licences are available in the states of Paraná and Rio de Janeiro.

Poker

Poker has been recognised as a sport by the Secretariat of Sports. As a skill-based game, online poker is permitted. According to the sole paragraph of Article 3, I of Ordinance SPA/MF No 1,207/2024, skill-based games do not fall under the category of virtual events in online fixed-odds betting.

Gaming Machines

Gaming machines are prohibited in Brazil.

The general prohibition on gambling in Brazil is set forth in Article 50 of the Misdemeanours Law, which imposes imprisonment for three months to one year and a fine for those who establish or exploit games of chance in a public place or a place accessible to the public, by means of the payment of an entry fee or otherwise.

The federal lottery operated by the Ministry of Finance is regulated by several laws and decrees.

LOTEX (the instant lottery) was created by Law No 13,155/2015 and amended by Law No 13,756/2018, and is regulated by Decree No 9,327/2018. Decree No 11,675/2023 also regulates LOTEX and allows the Ministry of Finance to authorise, on a temporary basis, direct operation by Caixa Econômica Federal for a specified period or until the commencement of indirect operation by the winning operator of the future concession-bidding process.

Horse-race betting is regulated by Law No 7,291/1984 and Decree No 96,993/1988.

Fixed-odds sports betting was legalised by Law No 13,756/2018 and is regulated by Law No 14,790/2023 as well as by the ordinances issued by the Ministry of Finance and SPA.

Law No 14,455/2022 authorised the federal executive power to create the health and tourism lotteries.

In Brazil, gambling does not have a legal definition.

In fact, the word “gambling” does not have a perfect translation into Portuguese. It can mean a bet or a game, involving a consideration, a prize and chance.

A “bet” is defined in Article 2, I of Law 14,790/2023 as “an act through which a certain amount is placed at risk with the expectation of obtaining a prize”. An “online game” is defined, in item VIII, as an “electronic mechanism that enables virtual betting on a game in which the outcome is determined by the result of a future random event, based on a random number, symbol, figure or object generator as defined in the system’s rules”.

Article 50 of the Misdemeanours Law establishes that the operation of illegal games of chance in a public place or in a place available to the public is subject to imprisonment for between three months and one year, and to a fine.

Games of chance are treated as misdemeanours, which are recognised by law as offences punishable by minor penalties (Article 61 of Law No 9,099/1995). In other words, a misdemeanour is a less offensive crime when compared to a criminal violation of Brazilian law.

On the other hand, “skill-based games” are defined in Article 2, VIII of Ordinance SPA/MF No 1,207/2024 as “a category of game in which the outcome is determined primarily or predominantly by the mental or motor skills of the participant, such as dexterity, expertise, intelligence, competence and knowledge, even though there may be non-prevalent random events”. This is the case with poker, for instance, and these games are legal in Brazil and do not fall under the category of virtual events in online fixed-odds betting.

The Misdemeanours Law dates from 1941 and does not differentiate between online and land-based activities.

Decree No 9,327/2018, which regulates LOTEX, defines physical bets as those made by the client upon the purchase of a printed ticket and virtual bets as those made by the client via electronic channels.

Law No 13,756/2018, which introduced fixed-odds sports betting as a lottery modality, sets forth that this can be offered both by land-based and by online operators. Law No 14,790/2023 and the ordinances issued by the SPA regulate fixed-odds sports betting.

See 3.3 Definition of Land-Based Gambling.

According to Article 50 of the Misdemeanours Law, a person is guilty of illegal betting if they establish or explore games of chance, an offence punishable with imprisonment for between three months and a year and with a fine. Whoever is found taking part in a game of chance, even via the internet or any other means of communication, as a cashier or bettor, is subject to a fine ranging from BRL2,000 to BRL200,000.

Currently, all prosecution cases related to Article 50 are suspended until the Brazilian Supreme Court judges Extraordinary Appeal No 966,177. The scope of that judgment will determine whether Article 50 of the Misdemeanours Law complies with the constitutional precepts concerning free enterprise and fundamental freedoms, as provided for in Articles 1, IV; 5, XLI; and 170 of the Federal Constitution.

An unlawful gambling operator can be penalised with imprisonment for between three months and a year, and with a fine. Players and punters involved with unlawful gambling are subject to fines ranging between BRL2,000 and BRL200,000.

Since the general ban on games of chance was imposed in 1941 by the Misdemeanours Law and reinforced by Decree-Law No 9,215/1946, several bills of law have been discussed in the Congress for the legalisation of gaming activities. Currently, they are appended to Bill of Law No 442/1991 (renumbered as Bill of Law No 2,234/2022 in the Senate), which was already approved at the Chamber of Deputies and by the Constitution and Justice Committee and, as of August 2024, is under discussion at the Plenary of the Federal Senate.

Once a bill of law is approved by the Federal Senate, it will have to be approved by the Chamber of Deputies. If amended, the bill of law will need further approval of any amendments by the Chamber of Deputies, the house of origin, prior to being presented and signed by the President.

Bill of Law No 442/1991 (Renumbered at the Senate to Bill of Law No 2,234/2022)

The details of this bill are as follows.

• Origin: Chamber of Deputies.
• Current situation: as of August 2024, under discussions in the Plenary of the Federal Senate.
• Summary: authorises the operation of games of chance in Brazil.
• Status: approved by the Chamber of Deputies.
• Next steps: awaiting a session vote at the Senate.
• Modalities: casinos, bingos, fixed-odds sports betting, videobingo, online gaming, jogo do bicho.
• Licences:
1. casinos – public bid for concession, 30-year term, renewable for equal terms;
2. bingos – authorisation for 25 years, renewable for one equal term;
3. jogo do bicho – BRL10 million minimum paid-up capital, 25-year term, renewable for equal terms;
4. online gaming – not defined; and
5. videobingo – not defined.

In 2024, Decree No 11,907/2024 established the SPA within the organisational structure of the Ministry of Finance and its responsibilities for licensing, permitting, granting, regulating, monitoring, supervising, overseeing and sanctioning fixed-odds betting, lotteries and other activities.

The Ministry of Agriculture, Livestock and Food Supply is responsible for the regulation of horse-race betting.

Regulation tends to be prescriptive. Consumer and data protection rules, on the other hand, are more risk-based, with the operator being held liable for the negative effects on consumers and data subjects, even if the prescriptive regulations have been complied with.

Law No 14,790/2023 regulates fixed-odds betting in Brazil. In 2024, the SPA issued several ordinances for the purpose of regulating fixed-odds betting, including Ordinance SPA/MF No 827/2024, which establishes the rules and conditions for obtaining authorisation for the commercial operation of the fixed-odds betting lottery modality by private economic agents throughout the national territory.

Sports Betting

The commercial operation of the fixed-odds betting lottery, as referred to in Article 29 of Law No 13,756/2018 and Articles 4 and 6 of Law No 14,790/2023, throughout the national territory, will be exclusive to legal entities that are licensed by the SPA to act as betting operators. After fulfilling the requirements set forth in the applicable legislation, the licence will be granted through the publication of an authorisation ordinance in the Official Gazette of the Union.

Horse-Race Betting

The horse-race betting licence issued by the Ministry of Agriculture, Livestock and Food Supply is called Carta Patente.

Poker

Poker does not require specific licences.

Fantasy Sports

Fantasy sports do not require specific licences.

Social Gaming

Social gaming does not require specific licences.

See 13.1 Types of Authorisations and Licences.

Sports Betting

Licences can be obtained at the SPA, by legal entities established under Brazilian laws with headquarters and management located within the national territory, and which meet all the requirements set forth in applicable laws, including Ordinance SPA/MF No 827/2024.

Horse-Race Betting

Licences can be obtained at the Ministry of Agriculture, Livestock and Food Supply.

Lotteries

No lottery licences are available in Brazil at the federal level.

Sports Betting

Fixed-odds betting licences are granted for a duration of five years.

Horse-Race Betting

Horse-race betting licences do not have an expiry date.

Sports Betting

Specific application requirements for fixed-odds betting are described in Ordinance SPA/MF No 827/2024. Only legal entities established under Brazilian laws with headquarters and management located within the national territory, and organised as limited liability companies or corporations with a minimum corporate capital of BRL30 million, may apply to the SPA for the licence. Subsidiaries of a foreign company, established under Brazilian law with headquarters and management in national territory, may be authorised to operate fixed-odds betting lotteries, provided that a Brazilian holds at least 20% of the operating agent’s share capital as a partner.

In addition, the legal entity must present evidence of integrity and prior experience in gaming services, and must submit certain information and documents related to technical, legal, financial, tax and labour aspects and the good standing of the shareholders, ultimate beneficial owners and administrators.

Horse-Race Betting

The applicant must:

• be a non-profit entity legally incorporated in Brazil;
• own or have the rights to use a racetrack;
• demonstrate the technical and economic viability of the weekly racing schedule;
• present the floor plan of the race field; and
• present the draft of a general betting plan (which includes the rules applicable for each game to be run by the operator, such as prizes, ticket value, minimum and maximum betting amounts, and payout).

Lotteries

Currently, no lottery licences are available in Brazil at the federal level.

Entities may apply for fixed-odd betting at any time, in accordance with the administrative procedure established in the regulations of the Ministry of Finance and SPA (Article 9 of Law No 14,790/2023). The SPA must notify the applicant legal entities within 150 days of the application date to pay the licence fee and to present the requirements described in Ordinance SPA/MF No 827/2024. Applying entities will then have 30 days to make payment and present evidence of compliance with the requirements.

For application fees, BRL30 million allows the operation of up to three commercial brands to be explored by the legal entity in its electronic channels, per licence.

Law No 14,790/2023 amended Article 32 of Law No 13,756/2018 to establish the monthly Gaming Monitoring Fee for the commercial operation of the fixed-odds betting lottery; it is triggered by the regular exercise of regulatory authority and is applied monthly to the proceeds of the collection after deducting the amounts referred to in Article 30, paragraph 1-A of Law No 13,756/2018 for social destinations.

Land-based gambling is restricted to:

• federal and state lotteries;
• fixed-odds betting;
• horse-race betting at racetracks and agencies;
• poker rooms; and
• future LOTEX and sports-betting points of sale.

Premises licensing varies according to the gambling modality.

Caixa Econômica Federal’s lottery agencies are concessions granted by the federal government, and the premises licences are granted by Caixa Econômica Federal.

Fixed-odds betting premises are subject to the conditions described in Law No 14,790/2023. At the time of the application for the licence, the applying entity must identify whether it intends to offer bets in virtual or physical modalities, either separately or jointly, in accordance with Article 14 of Law No 14,790/2023.

Horse-race entities must apply for their agents’ and agencies’ licences before the Ministry of Agriculture, Livestock and Food Supply. The horse-race entity remains entirely responsible for any and all acts of the agent. The agent’s licence is granted to the agent (an individual or a legal entity) to facilitate wagering only at the specified venue.

The Direct Action of Unconstitutionality (ADI) 7640 in the Federal Supreme Court (STF) challenges some provisions of Law No 14,790/2023. ADI 7640 was proposed by the states of São Paulo, Minas Gerais, Paraná, Acre, Mato Grosso do Sul, Rio de Janeiro and the Federal District. These states contest changes brought in by the new law that prohibit companies from participating in lottery services in more than one state and restrict advertising to only where the service is operated.

The National Confederation of Commerce of Goods, Services and Tourism (CNC) has filed ADI 7721 in the STF, questioning the validity of Law No 14,790/2023. The entity requests the precautionary suspension of the law until the judgment on the merits, alleging that the legislation contributes to the increase in indebtedness of Brazilian families. Minister Luiz Fux, rapporteur of ADI 7721 in the STF, has convened a public hearing to discuss the impacts of online betting in Brazil. The event will take place in November 2024.

B2C licences are regulated by Ordinance SPA/MF No 827/2024 for the commercial operation of the fixed-odds lottery betting modality by private economic agents throughout the national territory. Online games events are considered as fixed-odds betting, as per Article 3 of Law No 14,790/2023.

There are currently no regulations on B2B licences at the federal level.

Rules applicable to affiliates are described in Ordinance SPA/MF No 1,231/2024. As per Article 22, communication, advertising and marketing actions carried out by affiliates are considered part of the actions of the betting operator, and the operators are required to ensure:

• that their affiliates comply with applicable laws;
• the establishment of written contracts with their affiliates, in Portuguese, that explicitly specify whether or not subcontracting is allowed, in which case the operator’s responsibility cannot be waived;
• the affiliates’ duty to comply with legal, regulatory and self-regulatory rules regarding communication, advertising and marketing; and
• the criteria for compensating affiliates.

According to Ordinance SPA/MF No 827/2024, a licence will be granted considering the limit of up to three brands to be exploited by the legal entity in its electronic channels, per authorisation act. The licensed operating agent will be liable for all brands appointed in its application to operate fixed-odds betting. Therefore, it is not possible to offer white label solutions.

Online games events are considered as fixed-odds betting, as per Article 3 of Law No 14,790/2023. Therefore, the recent changes described in 1.1 Current Outlook and Recent Changes are applicable.

Also, online gambling provisions are included in Bill of Law No 442/1991 (Renumbered as Bill of Law No 2,234/2022 in the Senate), under discussions in the Plenary of the State Senate.

Technical measures for the operating of betting systems and the provision of data to the Betting System of the SPA (SIGAP) in the operating of the fixed-odds betting lottery modality are described in Ordinance SPA/MF No 722/2024.

Ordinance SPA/MF No 1,207/2024 establishes the technical requirements for online games and live game studios to be observed by fixed-odds betting lottery operators.

General rules applicable to payment transactions by authorised fixed-odds betting agents are described in Ordinance SPA/MF No 615/2024.

Normative Ordinance No 1,330/2023 and Ordinance SPA/MF No 1,231/2024 provide that responsible gaming measures must be put in place to:

• prevent compulsive or pathological gambling;
• protect vulnerable individuals (mainly children and adolescents); and
• ensure that bettors are over 18 years of age.

Normative Ordinance No 1,330/2023 and Ordinance SPA/MF No 1,231/2024 establish that responsible gambling consists of measures, guidelines and practices to be adopted for:

• the prevention of compulsive or pathological gambling disorders;
• the prevention and non-inducement of debt; and
• the protection of vulnerable individuals, especially minors and the elderly.

In addition, Ordinance SPA/MF No 1,231/2024 establishes specific and detailed measures to be implemented by the operating agent to ensure responsible gaming is complied with. Among the requirements, there is the obligation for the operator to implement gaming management tools and to promote informative and preventative actions to raise awareness among bettors about compulsive or pathological gambling disorders (starting at the bettor’s registration in the betting system), by creating a specific responsible gaming policy and disseminating and implementing legal requirements, best practices and harm reduction.

Normative Ordinance No 1,330/2023 and Ordinance SPA/MF No 1,231/2024 provide that operators must have internal control mechanisms and systems that allow the bettor to establish:

• a daily limit for gambling or betting;
• a maximum loss limit;
• a pause period; and
• self-exclusion.

Law No 9,613/1998 defines the anti-money laundering (AML) legal framework in Brazil. Pursuant to Article 1, money laundering under Brazilian legislation is the act of hiding or disguising the nature, origin, location, disposition, remittance or ownership of property, goods, rights or values arising directly or indirectly from a criminal offence. This law created the Conselho de Controle de Atividades Financeiras (COAF), the regulatory body in charge of pursuing, investigating and sanctioning any activity related to money-laundering crimes. The COAF issues directives to regulate activities of industries that may facilitate money laundering, such as gambling.

More recently, Normative Ordinance No 1,330/2023 and Ordinance SPA/MF No 1,143/2024 provide that sports-betting operators must inform the COAF in the case of suspected money-laundering activities, and must develop and implement policies, procedures and internal controls to identify, assess, control and monitor the risks associated with money laundering, terrorist financing and proliferation of weapons of mass destruction.

For the purpose of preventing money laundering, Ministry of Finance Ordinance GM/MF No 537/2013 establishes that entities that distribute money or goods through the operation of lotteries should pay special attention to serious suspicions of crimes defined in Law No 9,613/1998.

Normative Ordinance No 1,330/2023 confirms this mandatory communication with the COAF. Detailed provisions related to policies on AML in gambling are set forth in Ordinance SPA/MF No 1,143/2024, which is applicable to betting operating agents in relation to their AML duties and the prevention of other related crimes that are legally attributed to them, including under the responsibility of their administrators, in accordance with Article 12 of Law No 9,613/1998. Betting operating agents must request authorisation to use the Financial Activities Control System (SISCOAF), keeping their data and those of the corresponding users updated in the system.

Decree No 57,690/1966 and Decree No 4,563/2002 regulate advertising in Brazil. According to the latter, all advertisements in Brazil must comply with the rules set forth by the Standard Rules Executive Council (CENP). This council is responsible for regulating the commercial relations between advertisers and agencies, while the National Council for Advertising Self-Regulation (CONAR) is responsible for ensuring ethics in advertising content.

Both the CENP and CONAR are non-governmental organisations comprised of members of the advertising industry, and define their own statutes and codes. CONAR’s Self-Regulation Code also includes a specific rule, according to which, advertising content must not “induce criminal or illegal activities”.

The legal definition of advertising is set forth by Article 2 of Decree No 57,690/1966 as any paid form of dissemination of ideas, merchandise, products or services by an identified advertiser.

Article 23, Paragraph 2 of Normative Ordinance No 1,330/2023 and Article 14 of Ordinance SPA/MF No 1,231/2024 establish that additional aspects of advertising may be provided for in an advertising self-regulation code.

For that purpose, in 2023 CONAR issued Annex X to CONAR’s Self-Regulation Code, with specific rules to ensure that betting advertisements are responsible and with particular attention paid to the need to protect children, adolescents and other vulnerable individuals.

Ordinance SPA/MF No 1,231/2024 further regulates the conditions that operating agents must observe to advertise fixed-odds betting in Brazil.

Ordinance SPA/MF No 827/2024 stipulates, as a condition to the issuance of the licence, that operating agents must adopt and implement a code of conduct and dissemination of best practices in advertising and publicity.

No advertisement may:

• encourage or stimulate any type of offence or racial, social, political, religious or national discrimination;
• contain statements or visual or audio presentations that may offend the decency standards of the audience it intends to reach;
• exploit the consumer’s credulity, lack of knowledge or inexperience;
• cause fear without a relevant social reason; or
• exploit any type of superstition.

In the specific area of fixed-odds betting, Normative Ordinance No 1,330/2023 and Ordinance SPA/MF No 1,231/2024 provides that advertising, public relations and marketing actions for these operations may not:

• be aired in schools and universities;
• lack an age restriction notice, embodied by the “18+” symbol or the notice “prohibited for individuals under 18 years of age”;
• disseminate misleading claims about the odds of winning or the potential gains that bettors can expect;
• portray betting as socially appealing or contain statements from celebrities or digital influencers that suggest gambling contributes to personal or social success or improved financial conditions;
• use sexually suggestive messages or objectify physical attributes;
• incite intensification or exaggeration in the practice of betting;
• promote the product as a means to recover losses from previous bets or other financial losses;
• in any way offend cultural beliefs or traditions of the country, especially those against gambling; and
• suggest or induce the belief that, among other situations, skill, dexterity or experience can influence the outcome of a sports event.

Article 50 of CONAR’s Self-Regulation Code states that violators of the rules established in that Code are subject to the following penalties:

• a warning in writing;
• a recommendation to modify or correct the advertisement;
• a recommendation to the vehicle to suspend the broadcasting of the advertisement; and
• a public disclosure of CONAR’s opinion as regards the advertiser, the agency and the vehicle for non-compliance with the measures so recommended.

In December 2023, CONAR issued Annex X to its Self-Regulation Code, with rules to ensure that betting advertisements are responsible, with particular attention paid to the need to protect children, adolescents and other vulnerable individuals.

Ordinance SPA/MF No 1,231/2024 was also enacted with the purpose of establishing rules and guidelines for responsible gaming and for communication and marketing actions; it regulates the rights and duties of bettors and operators.

Fixed-odds betting operating agents must disclosed to the SPA situations involving merger, spin-off, acquisition, transformation, transfer or modification of direct or indirect corporate control, by submitting all necessary documentation within 30 days from the occurrence of one of these events.

There are currently no acquisitions or changes of control regulations in place for horse-race betting in Brazil.

The occurrence of a merger, spin-off, acquisition, transformation, transfer or modification of direct or indirect corporate control of the operating agent may trigger the revision of the licence granted by the SPA, as per Article 6 of Ordinance SPA/MF No 827/2024. The SPA will have 150 days to review documentation submitted by the operating agent and decide thereon. 

There are currently no requirements for passive investors in acquisitions or changes of control.

See 13.2 Application Process regarding Article 7 of Normative Ordinance No 1,330/2023.

Article 5, paragraph 1 of Law No 14,790/2023, and Article 6 of Ordinance SPA/MF No 827/2024, determine that the licence to operate fixed-odds betting granted by the Ministry of Finance may be reviewed whenever there is a merger, spin-off, incorporation, transformation, or any direct or indirect transfer or modification of corporate control within the authorised operating agent.

According to paragraphs 1 to 4 of Article 6, Ordinance SPA/MF No 827/2024, within up to 30 days from the occurrence of any of these events, the licensed operating agent must submit all necessary documentation to the Secretariat of Prizes and Betting of the Ministry of Finance (SPA), to ensure compliance with the rules and conditions established in applicable laws.

The operating agent is allowed to present a consultation to the SPA in advance to confirm that the intended corporate changes will not result in a review of the granted licence.

The SPA will review the terms of the licence in a specific administrative process, within up to 150 days starting from the date of submission of the documentation or the formalisation of the consultation, as applicable.

Horse-Race Betting

The Ministry of Agriculture, Livestock and Food Supply is the regulatory body in charge of regulating, monitoring and enforcing the regulation and penalties involving racetracks in Brazil.

Sports Betting

In 2024, Decree No 11,907/2024 established the SPA within the organisational structure of the Ministry of Finance and its responsibilities for licensing, permitting, granting, regulating, monitoring, supervising, overseeing and sanctioning fixed-odds betting, lotteries and other activities.

Also, as per Ordinance SPA/MF No 1,143/2024, operating agents will be subject to monitoring by the COAF, the regulatory body in charge of pursuing, investigating and sanctioning any activity related to money-laundering crimes.

According to Article 41 of Law 14,790/2023, administrative sanctions include the following:

• a warning;
• for a legal person, a fine ranging from 0.1% to 20% on the revenue product after deducting the related regarding the payment of prizes and income tax levied on the prize, relative to the last fiscal year before the initiation of the administrative sanctioning process, which shall never be less than the advantage obtained (when its estimation is possible) nor exceed BRL2 billion per infraction;
• for other natural or legal persons of public or private law, and for any associations of entities or persons constituted in fact or in law – whether temporarily or not, with or without legal personality, not engaging in business activity and when it is not possible to use the revenue product criterion – the fine shall be between BRL50,000 and BRL2 billion per infraction;
• partial or total suspension of the exercise of activities for a period of up to 180 days;
• revocation of authorisation, extinction of permission or concession, cancellation of registration, disaccreditation or similar releasing action;
• prohibition from obtaining ownership of a new authorisation, grant, permission, accreditation, registration or similar releasing action for a maximum period of ten years;
• prohibition from carrying out certain activities or types of operations for a maximum period of ten years;
• prohibition from participating in tenders that have as their object the concession or permission of public services, in the federal public administration, direct or indirect, for a period of not less than five years; and
• disqualification from acting as a director or administrator, and from holding positions in the bodies provided for in the by-laws or in the corporate charter of a legal person that operates any type of lottery, for a maximum period of 20 years.

The sanctioning procedural rite is described in Ordinance SPA/MF No 1,233/2024.

Operating agents and their administrators that fail to comply with AML obligations described in Ordinance No 1,143/2024 may also be subject to the sanctions provided for in Article 12 of Law 9,613/1998, by means of an administrative sanctioning process. Sanctions described in Article 12 of Law No 9,613/1998 include the following.

• A warning.
• A variable monetary fine not exceeding:
1. double the value of the transaction;
2. double the actual profit obtained or that would presumably have been obtained from the transaction; or
3. BRL20 million.
• Temporary disqualification, for a period of up to ten years, from holding the position of administrator in operating legal entities and others described in Law No 9,613/1998.
• Revocation or suspension of the authorisation to engage in activities, operations or functioning.

See also 13.5 Personal Sanctions.

See the second and third points listed in 11.2 Sanctions for the financial penalties to be calculated and charged by the SPA.

Article 33 of Law No 14,790/2023 establishes that the operating agent must use auditable systems and provide unrestricted, continuous and real-time access to the Ministry of Finance, as requested.

As per Article 55 of Decree No 11,907/2024, the SPA (as one of the branches of the Ministry of Finance) will be responsible for licensing, permitting, granting, regulating, monitoring, supervising, overseeing and sanctioning fixed-odds betting, lotteries and other activities.

Article 4 of Ordinance SPA/MF No 1,233/2024, which regulates the sanctioning regime within the scope of the commercial exploitation of the fixed-odds betting lottery modality, establishes that the administrative sanctioning process will be initiated, conducted and reviewed by the Undersecretariat of Monitoring and Oversight of the SPA.

Also, as per Ordinance SPA/MF No 1,143/2024, operating agents will be subject to monitoring of the COAF, the regulatory body in charge of pursuing, investigating and sanctioning any activity related to money-laundering crimes.

All gambling companies in Brazil are subject to the levy of corporate income tax (IRPJ) and social contribution on net profit (CSLL) at a combined general rate of 34%. The IRPJ rate is 15%, and a 10% surcharge applies to taxable income exceeding BRL240,000 per year. CSLL is due at a rate of 9%.

The effective tax rate may vary according to the system elected by the Brazilian legal entity for calculating IRPJ and CSLL (actual profit system or deemed profit system). Companies with total revenues greater than BRL78 million in the previous year are automatically subject to the actual profit system.

• Actual profit system – the tax basis is determined based on the accounting net profit, adjusted in accordance with the addition of non-deductible expenses and the exclusion of certain amounts. The Programme of Social Integration (PIS) and Contribution for the Financing of Social Security (COFINS) are taxed under the non-cumulative method, at the rates of 1.65% and 7.6% respectively, allowing credits from acquisitions.
• Deemed profit system – the tax basis for services is 32% on the company’s gross revenues, on an accrual or cash basis. The PIS and COFINS are taxed under the cumulative method, at the rates of 0.65% and 3% respectively, not allowing credits.

Besides the ordinary corporate taxes, gambling companies’ activities are also subject to the following taxes.

Instant Lottery – LOTEX

Taxation on the operator

The LOTEX operator’s gross revenue is 18.3% of the total sales. This is the tax basis for PIS (1.65%), COFINS (7.6%) and ISS (2% to 5%).

Taxation on players’ winnings

Lottery cash prizes that exceed the value of the first tier of the individual income tax monthly rate table (BRL2,112) are subject to income tax withholding at a rate of 30%, as set forth in Article 732, I of Decree No 9,580 of 22 November 2018 and Article 56 of Law No 11,941 of 27 May 2009.

Prizes in goods and services are subject to income tax withholding at a rate of 20%, as set forth in Article 733 of Decree No 9,580 of 22 November 2018.

Horse-Race Betting

Taxation on horsemen’s winnings

Prizes paid to horsemen, breeders and jockeys are subject to income tax withholding at a rate of 15%, as set forth in Article 737 of Decree No 9,580 of 22 November 2018.

Taxation on players’ winnings

Bettors’ prizes are subject to income tax withholding at a rate of 30%, as set forth in Article 732, II of Decree No 9,580 of 22 November 2018.

Sports Betting

Taxation on the operator

As per Article 30, paragraph 1-A, from the proceeds of the revenue, after the deductions regarding payment of prizes and income tax on prizes:

• 88% will be allocated to cover the operating and maintenance expenses of the operator and other betting games, except for the lottery modalities provided for in Law No 13,756/2023; and
• 12% will be allocated as social destinations, for the purposes of education, public safety, sports, social security, tourism, health and other social areas.

Taxation on players’ winnings

Fixed-odds sports-betting lottery cash prizes that exceed the value of the first tier of the individual income tax monthly rate table (BRL2,112) are subject to income tax withholding at a rate of 30%, as set forth in Article 732, I of Decree No 9,580 of 22 November 2018 and Article 56 of Law No 11,941 of 27 May 2009.

As per Article 31 of Law No 14,790/2023, net prizes obtained from fixed-odds betting lotteries will be taxed by the Individual Income Tax (IRPF) at a rate of 15%.

Poker

Taxation on the operator

The taxation applies as follows.

• Tournaments – the operator’s gross revenue is the total of the tournament’s entry fees minus the amount separated for the prize pool. This is the tax basis for PIS (0.65% or 1.65%), COFINS (3% or 7.6%) and ISS (2% to 5%).
• Ring games – the operator’s gross revenue is the rake collected in each hand. This is the tax basis for PIS (0.65% or 1.65%), COFINS (3% or 7.6%) and ISS (2% to 5%).

Taxation on players’ winnings

According to the Receita Federal do Brasil (RFB), when the prize depends on the performance of the participants, it is deemed as remuneration for the work, regardless of whether the prizes are paid in cash or in the form of goods and services. Therefore, if the prize is paid by a Brazilian legal entity to an individual fiscally resident in Brazil, it will be subject to personal income tax withholding calculated on the following progressive tax rates (in Brazilian reais):

• from BRL0 up to BRL2.112 – income tax exemption, no deductible amount;
• from BRL2,112.01 up to BRL2,826.65 – 7.5% withholding tax, BRL158.40 deductible;
• from BRL2,826.66 up to BRL3,751.05 – 15% withholding tax, BRL370.40 deductible;
• from BRL3,751.06 up to BRL4,664.68 – 22.5% withholding tax, BRL651,73 deductible; and
• from BRL4,664.69 and above – 27.5% withholding tax, BRL884.98 deductible.

According to Article 31 of Law 14,790/2023, net prizes obtained from fixed-odds betting lottery bettors will be subject to Individual Income Tax (IRPF) at a rate of 15%.

Article 51 of Law No 14,790/2023 also amended Article 30, paragraph 1-A of Law No 13,756/2018, with the effect that, from the proceeds of the collection and after deducting the amounts of the payment of prizes and of income tax applicable to the prizes:

• 88% will be allocated to cover the operating and maintenance expenses of the fixed-odds betting lottery operator and other betting games; and
• 12% will be allocated as social destinations, for the purposes of education, public safety, sports, social security, tourism, health and other social areas.

The procedures of payment by the operating agent of social destinations are described in Ordinance SPA/MF No 1,121/2024.

According to Article 7, I of Normative Ordinance No 1,330/2023, licences will not be granted to individuals. Only legal entities established under Brazilian laws, with headquarters and management located within the national territory, that meet all the requirements set forth in applicable laws, will be eligible for the licence to operate fixed-odds betting lotteries.

Application is subject to the confirmation of reputation and knowledge of the applicant entity’s controllers and administrators, as per Article 11 of Law No 14,790/2023. Key application requirements for directors, owners and senior management are established in Ordinance SPA No 827/2024 and involve:

• integrity requirements;
• a minimum of three years of professional experience in a field related to their role as administrators; and
• a higher education degree in an area compatible with the position to be held.

According to Article 7 of Normative Ordinance No 1,330/2023, a licence will not be granted to legal entities whose partners or controlling shareholders, individuals or members of a control agreement, managers and other individuals composing their corporate structure meet the following criteria.

• If they hold direct or indirect participation in a football joint stock company or a professional sports organisation.
• If they act as professional athletes, members of technical teams, referees or managers of Brazilian sports teams.
• If they are suspended from bidding and contracting with the Public Administration or have been declared unfit by the Public Administration at the federal, state or municipal level or the Federal District, while the reasons for the punishment persist or until their rehabilitation is achieved.
• If they are spouses, partners or relatives, either by blood or by affinity, up to the third degree, of public servants or service providers working in the area of the Ministry of Finance responsible for granting the authorisations referred to in applicable laws.
• If they have a prohibition under special law.
• If they have a conviction for:
1. administrative misconduct;
2. bankruptcy;
3. tax evasion;
4. malfeasance;
5. active or passive corruption;
6. extortion;
7. embezzlement;
8. offences against the popular economy;
9. offences against public faith;
10. offences against intellectual property; and
11. offences against the National Financial System.
• If they have a conviction with a criminal sentence that temporarily or permanently bars access to public office, by a final judicial decision.

If the licence is granted, the operating agent must pay a licence grant fee in the amount of BRL30 million.

Law No 14,790/2023 amended Article 32 of Law No 13,756/2018 to establish the monthly Gaming Monitoring Fee for the commercial operation of the fixed-odds betting lottery, which is triggered by the regular exercise of regulatory authority and is applied monthly to the proceeds of collection after deducting the amounts referred to in 12.2 Recent or Forthcoming Changes.

No personal authorisations and licences are currently available for fixed-odds betting activities.

Personal sanctions can be applied solely or jointly with financial penalties, and include disqualification from acting as a director or administrator, as well as from holding positions in the bodies provided for in the by-laws or in the corporate charter of a legal person that operates any type of lottery, for a maximum period of 20 years (Law No 14,790/2023, Article 41, IX).

Application is subject to the confirmation of reputation and knowledge of the applicant entity’s controllers and administrators, as per Article 11 of Law No 14,790/2023.

Normative Ordinance No 1,330/2023 establishes conditions of controlling partners or shareholders and other individuals comprising their corporate structure that may prevent a legal entity from obtaining a licence to operate fixed-odds betting activities.

Ordinance SPA/MF No 827/2024 determines that the licence shall be subject to integrity requirements, minimum professional experience and formal education of managers.

Administrators, partners, officers, managers and employees of the operating agent are also prevented, directly or indirectly, from betting (Article 26, II of Law No 14,790/2023).