BRAZILIAN UPDATE
A fter the Bolsonaro administration (2019-2022) failed to regulate Law No. 13,756/2018, which legalized fixed odds sports betting in Brazil1 as a form of lottery, the Lula administration, which took office on 1st January 2023, over twelve months, successfully managed to pass through Congress (albeit with several bumps on the way) the long-awaited regulations for the above-mentioned law. The regulations were enacted on 30th December 2023, as Law No. 14,790/2023. For a market that, in 2022, generated BRL120 billion 1 in bets 2 , the Federal Government was eager to issue such regulations within 2023 and secure vital additional revenues to fund its social programs and strive towards a zero fiscal deficit in 2024. This article provides a recap of the events of 2023 that culminated in this historic milestone in Brazil’s gaming and betting legal framework. For more than eight decades games of chance have been outlawed. Now, we review the main elements of Law No. 14,790/2023 and indicate what to expect in 2024. 2023 in a nutshell In January 2023, the Ministry of Finance, headed by Minister Fernando Haddad, invited São Paulo-based sports lawyer José Francisco Manssur to become Special Advisor to its Executive Secretary and to spearhead the drafting of the regulations for Law No. 13,756/2018. Manssur would have a colossal task in front of him: to interact with all public and private stakeholders for the regulations to be issued as soon as possible, since time was of the essence. His profile proved to be the right fit for the job. Regarded as a skillful lawyer and one who gets the job done, his experience working with government and having co- authored the text of Law No. 14,193/2021 (the Law of Football Corporations – S.A.F), provided the necessary credentials for the job. After several months of interactions with the industry and Congress (including in relation to the format to be adopted for the regulations), the Federal Government decided to put forward, in July, two pieces of legislation, namely: 1. Provisional Measure No. 1,182/2023, which became effective as from the date of its publication in the Official Gazette (25th July) and provided a robust framework for the regulation of fixed odds sports betting; and
2. Bill of Law No. 3,626/2023, which also proposed to amend Law No. 13,756/2018, insofar as fixed odds sports betting was concerned and to amend the legislation governing commercial promotions/sweepstakes (dating from 1971). Since Congress viewed that it had to play a central role in the making of the legal framework, it decided to let Provisional Measure No. 1,182/2023 ultimately forfeit (on 21st November) and to focus on the processing of Bill of Law No. 3,626/2023, which was reformulated to include much of the contents of the Provisional Measure. Bill of Law No. 3,626/2023 was approved by the Chamber of Deputies in September, which, pro-actively, included igaming in the legal framework (until then it had focused only on fixed odds sports betting). Such approval came while a Congressional Investigation (CPI) was underway into match-fixing in Brazilian football and which was interfering with the passage of the bill of law. Later, in October, while Bill of Law No. 3,626/2023 was being reviewed by the Senate, the Ministry of Finance issued Normative Ordinance No. 1,330/2023, establishing general conditions for the operation of fixed odds sports betting in Brazil. It also invited future applicants for a federal license to submit their expressions of interest, with certain basic information and documentation, on the promise that operators filing the same will be granted priority in the review of their applications once the federal licensing process commences. 134 expressions of interest were received. In December 2023, the Ministry of Finance reached out to such interested operators confirming an “alignment” video conference for 10th January 2024 to kick-off a testing phase of the systems the Ministry had developed. On 12th December, following fierce opposition by the so- called Evangelical Bench, which traditionally has opposed the legalization of games of chance in Brazil, the Senate approved Bill of Law No. 3,626/2023 excluding igaming and prohibiting the exploitation of online bets in video terminals at physical establishments. The Senate also included the requirement for future operators (which will have to be incorporated in Brazil and have their registered offices in country) to have at least 20 percent of their share capital held by Brazilians. Due to the Senate having changed the original text approved by the Chamber of Deputies, the Bill of Law had to return to the
1 Currently equivalent to approximately US$24 billion, taking into account a forex rate of USD1.00 = BRL5.00 2 According to a recent study produced by Instituto Brasileiro Jogo Legal – IJL and the BNLData portal
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IMGL MAGAZINE | JANUARY 2024
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