Industry Calls For Clarity Over Brazil Bonus Ban

January 29, 2024
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Forthcoming regulations should clearly define the scope of Brazil’s apparent ban on online betting bonuses to avoid distorted competition among operators who may arrive at varying legal interpretations, according to industry executives and lawyers.
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Forthcoming regulations should clearly define the scope of Brazil’s apparent ban on online betting bonuses to avoid distorted competition among operators who may arrive at varying legal interpretations, according to industry executives and lawyers.

Article 29 of Law 14.790, as enacted in December, expressly forbids licensed operators from offering “an advance, bonus or prior advantage, in any form, even merely as a promotion, publicity or advertising, for placing a bet.” 

As previously highlighted by Vixio GamblingCompliance, however, Brazilian lawyers believe the legislative intent is not to completely ban one of the industry’s most important marketing tactics and that at least retention bonuses should still be permitted under the law. 

It is not clear from the text of the law what “prior” means and forthcoming regulations should clarify whether that refers to the time before a player registers an account, before they place a deposit or some other point in time, said Alex Fonseca, CEO of Superbet in Brazil.

Online gambling bonuses are not offered purely as a way of attracting new customers through advertising, Fonseca noted.

“The question that exists for me as an operator in the market is, can I offer a bonus after a player already has an account?

“The law talks about bonuses as a form of advertising or promotion, and at a “prior” moment. What about later in the lifecycle of the customer on the platform?

“These are the points that have to be clarified to ensure that the operators can comply with the rules in a linear way and not allow this to become subject to different interpretations, operator by operator.”

Fernanda Batistella, senior attorney at Maia Yoshiyasu Advogados law firm, noted that the language on bonuses is included in the same article of Law 14.790 that is intended to prevent the offering of credit to gamblers, which is not the purpose of marketing bonuses for online betting.

She agreed that arriving at a clear understanding of what “prior” refers to is critical in terms of implementation.

“Because there are various ways to offer a bonus, just to say you can’t do it, that does not seem to me to be appropriate; the detail is lacking,” she said.

Both Fonseca and Batistella were speaking on a January 25 webinar on marketing hosted by SBC Noticias Brasil.

Fonseca expressed confidence that the issue will be addressed by Brazil’s Ministry of Finance through forthcoming regulations, but he cautioned that it would be impossible for either those rules or accompanying advertising standards to address every potential scenario in which a bonus could be offered, particularly as the industry continues to evolve.

The rules should instead establish a “baseline”, clearly defining when a bonus can be offered, and then they can be perfected over time, he said.

Speakers on the SBC webinar warned that a blanket ban on all bonuses would be out of line with the approaches of well-regulated international jurisdictions, hand a significant marketing advantage to offshore operators and make Brazil’s licensed market less attractive overall.

“If there is no clarity, this could drive away various international operators,” said Mateus Lemos, CEO of São Paulo-based BB Marketing.

The scope of bonus restrictions is one of several threshold policy questions expected to be addressed via a series of forthcoming regulatory ordinances due to be released by the Ministry of Finance in the coming weeks. 

Formal rules on marketing are also expected to dovetail with self-regulatory standards that were published by Brazilian advertising council CONAR on the same day that Law 14.790 was signed in late December.

Those ad standards, which are partly based on similar standards in international markets such as the UK and Australia, are set to take formal effect on Wednesday (January 31) and will be applicable to Brazilian betting companies, media groups and other advertisers in advance of licences becoming available.

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