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In a first-of-its-kind legal action, the public defender’s office for Rio de Janeiro state has filed a lawsuit seeking more than US$50m in damages alongside harsher regulatory restrictions in order to mitigate leading operators’ alleged violations of Brazilian consumer protection laws.
The consumer protection division of the Rio de Janeiro Public Defender (DPE-RJ) filed a civil public action lawsuit before state courts on July 18, seeking a total of R$300m (US$54m) in moral damages from 43 named operators that include the Brazilian subsidiaries of Betano, Flutter, Entain and bet365.
Citing various newspaper reports of Brazilians entering into debt due to elevated betting activities, the lawsuit collectively accuses the operators of “deliberately omitting” appropriate disclosures of risks of addiction and indebtedness associated with online gambling from their “misleading advertising”.
The DPE-RJ and its consumer protection department Nudecon also allege that operators are acting in “flagrant” violation of an August 2024 regulator ordinance adopted by the Brazil’s Secretariat for Prizes and Bets (SPA), which requires operators to warn players over risks of addition upon registration and then provide ongoing guidance on possible signs of problematic gambling to enable bettors to self-monitor their activity.
“Many people view gambling as a kind of investment with the idea that there will be a return, which is a completely misguided notion and the result of a lack of financial education and misleading advertising,” said Paulo Vinícius Cozzolino Abrahão, the chief public defender for the state of Rio de Janeiro, in a statement announcing the litigation.
“Awareness needs to be raised,” Cozzolino added. “It's the same movement that occurred with cigarettes in the 1990s, and today there is a collective awareness that smoking is not beneficial to health. The issue needs to be addressed with the utmost haste and seriousness.”
In order to guarantee consumer protections, the lawsuit insists that betting advertising should be subject to similar restrictions to tobacco and that operators must immediately comply with more specific limits or risk further fines.
Per the lawsuit, operators should cease using the phrase “gamble responsibly” (“jogue com responsabilidade”) as their chosen disclosure in ads since that slogan offers inadequate information for consumers and implies the responsibility for safer gambling lies solely with them.
Instead, operators must use other messaging approved by Brazilian advertising council CONAR such as “betting may cause addiction” and ensure that these warnings are displayed across the entirety of the screen for at least 10 seconds whenever a player accesses the website or app of a betting platform.
The lawsuit also calls for operators to impose stronger alerting and blocking mechanisms for riskier activities such as repeated bets placed in high amounts, particularly late at night, “in order to ensure responsible and safer gambling”.
Industry Pushback
The legal action has been swiftly criticised by Brazilian industry groups and legal experts that note the lack of specific evidence of non-compliance provided by the Rio public defender’s office in its 240-page filing.
In a statement, industry association ANJL said licensed operators are fully compliant with both SPA and CONAR rules and that the arguments being put forward by the Rio public defender “only apply to the illegal market”.
Brazilian lawyer Caio de Souza Loureiro described the litigation as “yet another example of action driven by misinformation and ideological opposition to the gambling sector”, while questioning why only half of Brazil’s licensed operators had arbitrarily been named as defendants “without individualising the actions of each operator”.
“Additionally, the lawsuit seeks to impose measures and policies that are not provided for by existing laws and regulations from the [SPA]. Brazilian law clearly states that changes to laws and regulations cannot be made through a Class Action,” Loureiro, partner at TozziniFreire law firm in São Paulo, told Vixio GamblingCompliance.
“Given these circumstances, DPE-RJ would be more effective by advocating for stricter enforcement against illegal gaming, as Brazil still has a significant portion of the gaming sector operating illegally due to inadequate enforcement by authorities. Furthermore, DPE-RJ could engage in active dialogue with regulators to enhance the rules and promote responsible gaming.”
Consumer Protection In Enforcement Focus
Despite skepticism over the merits and motivations of the lawsuit, legal experts agreed that it amplifies a broader trend of state-level consumer protection watchdogs angling for a central role in policing Brazil’s newly regulated market for online gambling, despite the more direct regulatory responsibility of the federal government and SPA.
There is also a risk of the legal action being replicated by public defenders or attorneys general in other Brazilian states beyond Rio de Janeiro, lawyers said.
“We are seeing a lot of movement on consumer protection aspects — which is a concern for public authorities lately,” said Udo Seckelmann of Bichara e Motta law firm, pointing to a series of actions being taken by federal and state consumer agencies, public defenders and through individual consumer lawsuits “all at the same time”.
“This focus on consumer protection is legitimate, but perhaps the claims and requests may not be,” he told Vixio.
It should be noted that Nudecon is a specific division of the DPE-RJ and acts independently from the state of Rio de Janeiro’s dedicated consumer protection agency, Sedcon.
Still, that agency has signalled its own interest in an online betting market that remains under intense media and political scrutiny across Brazil.
Last month, Rio de Janeiro’s Sedcon and its national equivalent, Senacon, published a joint guidance memo and 29-point checklist for state and local consumer authorities to use as they apply “continuous vigilance” to the sector and evaluate whether online betting companies are compliant with Brazilian consumer protection requirements.
Among other things, the Sedcon checklist calls on consumer protection agencies to review whether operators have clear terms and conditions, advertise in high-profile spaces or via influencers without offering appropriate disclosures, or unduly limit the amounts players can withdraw from their accounts.
In May, national consumer watchdog Senacon reported that more than 1,000 consumer complaints had already been logged against online betting operators via its portal between the launch of Brazil’s regulated market on January 1 and the end of April.
According to Senacon, the main sources of consumer complaints include prizes not being paid, accounts being suspended without explanation, inefficient customer service and bonus offers with unclear terms.
