Brazil’s Gambling Regulations: An Overview

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Brazil is significant for any sector as it is the seventh-largest country by population. Since the 1940s, Brazil has maintained a closed gambling market, permitting only state-owned lotteries and horse-race wagering. Although bingo and slot machines briefly had a stint in the 1990s, they were banned in the mid-2000s under a court order, solidifying the restrictive gambling landscape in the South American country.

The Brazilian Civil Code classifies bets as contracts, therefore only those over majors (those aged above 18 years) are legally allowed to gamble. Further, the Brazilian Child and Adolescent Protection Statute prohibits entry of children and teenagers into venues where billiards and snooker are played, and venues where bets are made.

  1. Legal Exceptions: Poker, Skill Games, and Social Gaming

Private entities can operate poker, skill games, and social gaming without specific licenses, providing some room for recreational gambling outside state-controlled avenues.

2. Controlled Horse-Race Wagering

Horse-race wagering is limited to non-profit entities with racetracks authorized by the Ministry of Agriculture. These entities can appoint agents and hire private suppliers, operating without specific licensing or regulatory oversight.

3. Government Monopoly on Lotteries

Lotteries are exclusively state-owned in Brazil, with Caixa a state-owned financial services company gaining control over the distribution of the federal lottery in 1961, cancelling all private lottery licenses. Only provinces with existing lotteries before 1967 can independently operate their lotteries. SECAP, which comes under the Ministry of Economy, administrates and regulates lottery activities in Brazil.

Over 13,000 lottery points of sale are privately operated with permission from Caixa. State lotteries must comply with the gaming standards set forth by the Secretariat and may not create new gaming products.

The Fixed-Odds Betting lottery law was enacted into law permitting betting on sports events. The entities licensed to conduct betting on sports events are required to ensure 80% of the turnover (land-based) and 89% of the turnover (online) towards the prize pool.

4. Provincial Lotteries’ Brief Venture into New Products

From 1993, some provinces developed new gaming products, including bingo venues, slot machine parlours, and online gaming, under state laws. However, the 2007 Supreme Court ruling declared state and municipal legislation on gambling unconstitutional.

5. Offshore Gambling: Legal Loophole and Consumer Protection Concerns

A legal loophole enables offshore operators to offer gambling products to Brazilian citizens. Contracts between Brazilian clients and offshore operators are deemed valid if the operator’s website is hosted in a jurisdiction authorizing gambling. Despite potential legal consequences, the Brazilian government has not taken action against foreign operators.

6. Jurisdictional Impact: Consumer Protection Laws and Financial Transactions

The contract’s validity, subject to the operator’s jurisdiction, has implications for consumer protection and unauthorized cross-border financial transactions in Brazil. While potential criminal aspects exist, the government has not pursued action against foreign operators.