BRAZILIAN UPDATE
Chamber of Deputies for deliberation, prior to being forwarded to President Lula for sanctioning. On 21st December, Bill of Law No, 3,626/2023 was approved by the Chamber of Deputies with igaming being re-included, marking defeat for the Evangelical Bench (which, up to the last minute, tried to push the vote into 2024). Following the Christmas break, the approved consolidated text was sent to President Lula, who sanctioned the same with some vetoes that had been requested by the Ministry of Finance and will be further reviewed in this article. The bill of law became Law No. 14,790/2023 and was published in an extraordinary issue of the Official Gazette on 30th December. It is expected that this new federal law will be further regulated by a series of administrative ordinances (known in Portuguese as portarias ), to be issued by the Ministry of Finance. It is important to remember, however, that the legal framework for games of chance will only be complete when Bill of Law No. 442/1991, approved by the Chamber of Deputies in February 2022 and renumbered Bill of Law No. 2,234/2022 after reaching the Senate, which seeks to legalize land-based casinos and bingo parlors, as well as jogo do bicho, is enacted as a federal law. It was to be voted on by the Senate on 20th December 2023, but the session was cancelled, pushing the vote into 2024. The enactment of Law No. 14,790/2023 will certainly serve as a catalyst for moving this process forward after the Congressional Recess ends on 1st February 2024.
virtual bets on games in relation to which the result is unknown at the time the bet is placed and is determined by the outcome of a future aleatory event, using a random generator of numbers, symbols, figures or objects defined in the rules system. Besides fixed odds sports betting (the new law confirming that in-play bets are permitted), which have grown exponentially in Brazil since 2018, with the enactment of Law No. 13,756/2018, practically any online game in which the bettor knows what the return on the bet will be at the time it is placed will be considered to be lawful given that the definition provided for online gaming is quite broad. The Ministry of Finance will have to further regulate which online games fall within the above- mentioned scope. 2. Licensing While the details of the licensing process are to be laid down by a portaria , the law confirms that licenses will be provided on a discretionary basis, under an open licensing model (where there is no limitation on the number of licenses that can be issued), for a five-year term and valid nationwide. Applicants must be companies incorporated under Brazilian law and having their registered offices in Brazil. The requirement for having a minimum Brazilian share capital ownership of 20 percent was, unfortunately and unjustifiably, maintained, thereby constituting a potential market entry barrier to foreign operators. The law, however, is not precise as to what “Brazilian” entails, whether indeed it is a Brazilian national (individual) or a Brazilian corporate entity (i.e. one incorporated under Brazilian law and having its registered offices in Brazil). If the latter is acceptable, foreign operators (which continue to represent the majority accessing the Brazilian market) may have to add another corporate layer to their local corporate structures by first incorporating a local holding company to own the equity – or at least 20 percent of the same – in the local company applying for the license. If the latter is not the case, then, besides establishing a joint venture with a local, it may be possible to implement other legal structures to accommodate this legal requirement (such as, for example, splitting the share capital into voting and non-voting capital, with the Brazilian holding the latter). The law also determines that the controlling shareholder cannot, directly or indirectly, be a shareholder in a SAF (football corporation) or professional sporting organization, or form part
Law No. 14,790/23: Main aspects 1. Scope
The law provides the general conditions for the exploitation of the fixed odds lottery within Brazilian territory where bets can be placed by individual bettors above the age of 18 (there being certain impediments applied to bettors) on: i. Actual sports-themed events that cannot exclusively involve minors, in which the outcome of the same is unknown at the time the bet is placed and which are conducted in accordance with the rules established by the national sporting organization under the Brazilian General Sports Law, or affiliated entities, or by sports administration organizations headquartered overseas; and ii. Virtual online gaming events, where online gaming is defined as the electronic channel making available
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IMGL MAGAZINE | JANUARY 2024
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