Brazil Operators Seek Clarity About Permissible Casino Games

June 14, 2024
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Following a positive resolution to one key pending policy question, industry groups are now hoping that Brazil's new gambling regulator will take inspiration from Italy in allowing for a wide range of casino-style games to be offered under the guise of fixed-odds betting.
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Following a positive resolution to one key pending policy question, industry groups are now hoping that Brazil's new gambling regulator will take inspiration from Italy in allowing for a wide range of casino-style games to be offered under the guise of fixed-odds betting.

Speaking during Vixio GamblingCompliance's "Betting on Brazil" webinar, Luiz Felipe Maia of Maia Yoshiyasu law firm called the issue of what constitutes an online game the most complicated point of discussion currently between operators and Brazil's new Secretariat for Prizes and Bets (SPA) regarding the implementation of Law No. 14.790

The Vixio webinar was hosted less than 24 hours after the SPA confirmed that a statutory requirement for each operator to have a Brazilian investor could be satisfied through a Brazilian company, and would not require a Brazilian natural person as a partner.

After welcoming that development, Maia noted the SPA's head regulator, the newly appointed Regis Dudena, had so far taken a cautious approach to the issue of permissible casino games.

“He said that he’s not sure whether online casino games would fit into the definition of online games as defined by the law,” said Maia, referencing comments made by Dudena last week at a legal seminar in São Paulo. 

“I think I understand his caution, not to take any position before he is certain whether it is or it is not legal.”

Rafael Marchetti Marcondes, legal director for Brazil's Institute of Responsible Gaming (IBJR) trade group and chief legal officer for Rei do Pitaco, said that the IBJR had spent the past months working with the Ministry of Finance on defining what forms of games could be encompassed under fixed-odds betting. 

He noted that Dudena has acknowledged that government officials are now evaluating the legal framework and regulations of Italy, where online casino games are also legislated as fixed-odds bets.

The IBJR is working with law firms in Italy and the Italian regulator to help educate Brazilian officials “and the reason why is under the Italian legislation, crash games are accepted as fixed-odds bets. I think that this is a way that the regulator will now model things,” Marchetti Marcondes told Vixio webinar attendees.

Maia also warned that a more restrictive interpretation of permissible online games creates “the risk of litigation because the regulator must define the requirements within the framework of the law”.

“They're not supposed to create additional requirements, and then that could ... create room for litigation. That may take even more time, potentially suspending the whole application process.”

Past statements in Brazil have suggested that government officials may not be comfortable that certain jackpot-based games and crash games would fit under the definition of a fixed-odds bet as provided by December's law.

Maia also said that negative connotations with the term “casino” among Brazilian policymakers may also be a factor that gets in the way of productive discussions on the issue.

“I think it's up to us now to show the regulator that one online game with multiple odds, depending on multiple quotation results, fits in the definition provided by the law,” he said. 

Where the SPA ultimately lands on the issue will determine how much of the current offshore market is ultimately channelled in Brazil's licensing and regulated market, agreed Maia and Marchetti Marcondes.

Maia said he had some operator clients who are in the process of preparing their licence applications, but they will be waiting to actually submit them until “they have more clarity on this point”.

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