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Brazil-facing operators have been ordered to immediately cease offering bonuses to players, just days after the country’s chief betting regulator called on the industry to voluntarily comply with forthcoming restrictions.
Consumer protection authority Senacon published an order on Tuesday (November 19) to immediately impose a ban on “any advertising of rewards related to advances, bonuses or prior advantages … for placing a bet”.
Such bonuses already are prohibited in Brazil under legislation and regulations that are due to become effective from January 1, but Senacon’s order means operators will now have to cease offering bonuses during the final few weeks of Brazil’s unregulated market as well.
The consumer authority within Brazil’s Ministry of Justice and Public Security also ordered an immediate ban on any advertisements that target children or adolescents, which similarly will be banned through formal regulations as of January 1 but are already prohibited under self-regulatory standards adopted by advertising council CONAR.
In a statement, Senacon said the new restrictions were intended “to prevent over-indebtedness” among Brazilian families.
“The suspension of all marketing that offers rewards, bonuses or prior advantages is a necessary action to guarantee that consumers are not induced into betting in an irresponsible manner,” stated Wadih Damous, Brazil’s national consumer secretary.
Per the order, all operators named on the Brazilian betting regulator’s whitelist have 20 days to report to Senacon on how they are complying with the new restrictions and those that fail to comply may be fined up to R$50,000 (US$8,650) per day.
Senacon’s action was taken several weeks after the federal consumer protection agency initially demanded information from 17 leading operators in Brazil about the types of bonuses they are providing to customers, in apparent contradiction with one provision of a December 2023 federal law to regulate sports betting and online gaming.
Various operators have continued to offer welcome and deposit bonuses to Brazilian players through the course of 2024, on the basis that regulations to prohibit them do not become effective until the launch of the regulated market from January.
However, Brazil’s chief gambling regulator also recently called for operators to proactively comply with forthcoming legal restrictions on bonuses, similar to how they have already voluntarily stopped accepting credit-card deposits.
“The regulatory obligation isn’t there this year,” Regis Dudena, head of the Ministry of Finance’s Secretariat for Prizes and Bets (SPA), told Brazilian political journal Jota during an extensive interview published on Monday.
“But I think this could be an opportunity to show the society that’s watching them that there are serious companies that are actually here to comply with the rules.”
Although Article 29 of December 2023’s Law 14.790 generally bans bonuses or promotional offers, the SPA has advised that only welcome or deposit bonuses are prohibited and free bets or other types of rewards can still be offered via loyalty programmes for existing customers.
Loyalty bonuses do not appear to be implicated by the Senacon order or an accompanying technical memo from the agency, which merely repeat the language of the law and SPA regulations without offering any additional clarification.
Critical Weeks Ahead In Licensing Process
The order regarding bonus offers comes as Brazil’s licensing process moves into its final phase following the expiry of a deadline on Monday for the SPA to advise initial applicants for a federal licence whether they have been successful.
A May 22 licensing ordinance grants the SPA a 180-day window — or until November 18 — to process applications for all operators that stepped forward to apply within a period of 90 days.
Those operators that receive notification of a successful application will have 30 days to pay an upfront fee of R$30m (US$5.2m) and show proof of minimum capital of the same amount plus R$5m in financial reserves.
To go live on January 1, operators also must submit compliance certificates from a registered independent testing lab, establish customer-support functions within Brazil and register a .bet.br domain name.
In his interview with Jota, Dudena said the SPA expects to publish a list of licensed operators eligible to launch on January 1 at some point during the second half of December.
Meanwhile, the SPA chief also welcomed an earlier emergency order that was published last week by a Brazilian Supreme Court justice in response to two constitutional challenges seeking to overturn Law 14.790 and prohibit online betting.
Justice Luiz Fux’s order similarly called for an immediate ban on advertising to minors, alongside accompanying restrictions to prevent welfare funds from being used for online gambling.
Dudena noted that the judge had the authority to fully suspend implementation of the law and declined to do so.
“The signal he has given is that he is not questioning the constitutionality of the law,” Dudena told Jota.
“To say (the risk that the law could be declared unconstitutional) has passed, based on a preliminary decision, I think that is too much, but this was a relevant signal.”
