Navigating Brazil's Evolving Gambling Landscape: Insights from Legal Expert

Brazil enacted Law 14.790 at the end of 2023, aiming to achieve a 'zero-tax deficit' this year. This law continues the regulation of sports betting and iGaming, with iGaming being broadly defined as all games of chance offered in a virtual environment. The law prohibits land-based casinos, but further details on allowed games are awaited through ordinances. Three ordinances have been released so far, covering accreditation of testing labs, payment methods, and technical requirements for gaming websites.

Neil Montgomery, a lawyer at Montgomery & Associados, highlights the challenges local operators face due to strict regulations on payments and advertising. He notes the ambiguity surrounding the need for a central bank license for payment processors and the impact of Conar's advertising guidelines. With federal licenses unavailable, operators mostly operate from overseas, avoiding taxes and legal obligations, potentially leading to channelization issues.

Montgomery discusses concerns about the ban on promotional bets potentially driving people towards the black market, emphasizing the importance of bonuses for attracting new clients. He attributes the strict regulations to the government's aim to combat gambling addiction and promote gambling as entertainment.

Regarding long-term implications, Montgomery suggests that state licenses may gain importance due to delays at the federal level. He explains how states like Rio de Janeiro offer more attractive licenses, leading operators to prefer state-level licensing, which could undermine federal compliance efforts.

Montgomery reflects on lessons Brazil can learn from other Latin American countries with regulated gambling markets, stressing the need for timely regulations and adaptation to market dynamics. He also discusses challenges posed by the requirement for 20% Brazilian ownership in federal licenses, suggesting potential circumvention through corporate structures.

Overall, Montgomery raises concerns about excessive regulation potentially driving operators to the black market and highlights uncertainties surrounding regulatory frameworks, particularly regarding the 20% Brazilian ownership requirement.

By fLEXI tEAM