Analysis: Brazilian Gambling / Online Betting Law

Unlike many South American nations, Brazil still has a lot of work ahead of it to regulate its gambling and betting market. Due, in part, to its outdated legislation (most of which was last updated in the 1940s), as of today only lottery and horse bets have been regularized in Brazil. Online betting has not yet been properly regulated.

On the Internet with World War II Era Laws

Like almost all other forms of betting, online betting – whether sports betting or betting at online casinos – has yet to be settled in Brazil. The origins of the latest betting regulations can be found in the 1940s.

In 1941 the Criminal Convention Act in Brazil prohibited all forms of unauthorized sports betting. This law was then followed by a decree from President Dutra in 1946, which disallowed many other forms of betting. This included banning the operation of all physical casinos.

At present, only the following forms of betting have been fully regulated:

  • Lottery
  • Horse betting
  • Bingo

More forms of sports betting are available through operators that contain State participation, such as CAIXA.

Flying in the Face of Lawmakers

Nevertheless, many foreign online betting operators offer their services to Brazilian customers. Most of them are happy to process Brazilian transactions, and many support popular payment methods at the local level, such as Boleto Bancário and e-wallet. Many also offer Portuguese versions of their websites, which aim to reach Brazilian consumers.

In total, it is estimated that the unregulated portion of the Brazilian betting market is around 5 billion dollars. In fact, in 2010 alone, estimates suggest that Brazilians spent about 4 billion dollars on online gambling alone.

These numbers are sure to grow with the number of smartphone owners growing in Brazil.

Failed Legislation

Although Brazil is considered one of the strongest opponents to online betting in the region, its attempts to try to block online betting have largely failed.

In recent years, various forms of legislation designed to prevent Brazilian customers from using online betting services have been submitted for approval. But although many of them have presidential support, none of them have passed:

  • In 2008, legislation along the lines of the United States Internet Betting Act was brought to the table before the Brazilian Congress.
  • In 2010, an attempt was made to block financial transactions between Brazilians and online betting operators, a bill that was taken to the Senate.
  • In addition, additional attempts were made to force Brazilian Internet Service Providers to block online gambling websites, which occurred in 2009.

In fact, some politicians openly questioned whether banning foreign operators (who dominate the Brazilian online betting market) could ever be effectively put into practice. From these voices, we can distinguish Senator Alves Filho, a well-known opponent of online betting regulation.

Improbable Change

Despite the fact that no significant changes in legislation have been brought to the table since that time, it seems that Brazil will be preparing to launch new measures regarding online betting, which could happen at any time. Politically, the country is still quite hostile to the idea, and in addition there are also factors that complicate the scenario of change that some politicians want to achieve:

  • The 2014 World Cup, the period in which Brazilian bets on football usually skyrocket.
  • The possibility of lifting the ban on real casinos in Brazil, to allow casinos to become a tool for regional development and to attract tourists.

With the monopoly supported by the State, with CAIXA being the only regulated Brazilian operator that can manage sports betting, such as football betting, the government may want to protect this monopoly to achieve a higher level of success.

In addition, the notion of legalizing gambling in casinos to transform Brazil into a betting operator similar to Las Vegas and Macau (which would be favorable for Brazil due to the direct impact on the economy, bringing benefits), may further complicate this issue.

Timeline

  • 2010: The Brazilian Congress fails to try to approve a bill to ban Brazilians from making transactions with online betting operators.
  • 2009: Legislation to compel Internet Service Providers (ISPs) to block online gambling websites in Brazil fails.
  • 2008: Project to ban online betting forms is not approved.
  • 1946: Presidential decree bans some forms of gambling, including casinos.
  • 1941: Law bans unauthorized forms of betting.

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