After a whole year of waiting since legislative approval, tighter guidelines on bonus offers and advertising will be taking effect on January 1, 2025. Discover what the regulations are all about and how the market is expected to shift in the coming year.
As momentum builds towards enforcing a regulated iGaming market in Brazil on January 1, 2025, the National Consumer Secretariat (Senacon) has issued a directive prohibiting all bonus promotions and fixed odds gambling advertisements targeting minors. Operators were given 10 days to submit transparency reports detailing what strategies they have adopted to implement and comply with the decree, which applies to iGaming and sports betting. Companies that fail to comply will face a daily penalty fee of R$50,000 ($2,762) until full compliance can be proven.
Senacon director Vitor Hugo do Amaral Ferreira signed the measures drawn from the Consumer Defence Code (CDC) and the Statute of Children and Adolescents, which cover consumer rights and protection, especially for vulnerable groups. The prohibitions are reinforced by Ordinance No. 615, issued by the Secretariat of Prizes and Betting (SPA) and the Ministry of Finance, which had previously banned such incentives in its April 2024 ‘Ordinance on Payments.’
Betting market incentives such as bonuses and promotional offers continue to play a pivotal role in the global gambling industry, acting as a glue that binds patrons to operators. Players often find it easier to select gaming sites based on the perks offered, enhancing customer acquisition and engagement. The SPA has explicitly prohibited operators from offering any form of financial benefit or promotional advantage, including upfront credits, bonuses, or similar incentives. This is irrespective of whether they are presented as marketing or advertising tools to encourage betting.
Through Order No. 2,344/2024, operators must halt any advertising targeting minors, aligning with broader consumer protection goals. Given the dire recursions for non-compliance, operators will now need to go beyond the norm to promote their services. While valid, the decision marks a significant departure from industry norms when compared to other established markets. On the flip side, this could prompt global operators to reassess their strategies for entering the Brazilian market, as they will need to comply with stricter rules or face hefty fines.
The ban also includes a provision to ensure that people on social welfare cannot use the benefits for gambling activities. This measure stems from concerns over the potential misuse of government-provided aid intended for essential needs, such as food, housing, and healthcare. By restricting gambling expenditures among welfare recipients like those from the Bolsa Familia Programme (PBF), policymakers aim to safeguard at-risk groups from financial harm and reinforce the ethical use of public funds.
The ruling on welfare funds comes after a Central Bank study in July revealed that about one-fifth of payments made through the PBF funds were spent on iGaming. This aligns with the government’s initiatives to promote responsible gambling and curb exploitative practices within the industry. According to industry experts, advertising sets apart licensed operators from unregulated markets, which means that the current measures may be counterproductive.
When addressing concerns raised by critics, ANJL legal director Pietro Cardia Lorenzoni said in part:
“Advertising is one of the essential ways to differentiate regulated from unregulated gambling,”
He also asserted that a more pressing matter was the gambling black market, whose negative effects are being prolonged by delaying the implementation of the gambling legislation.
The impending overhaul of Brazil’s gambling legal framework has been the subject of debate since it was approved in December of 2023. Since it was officially announced that regulated betting was coming to Brazil, several legislative and legal discussions have addressed concerns raised by various parties—for instance, the Evangelical Bench, which has repeatedly cited social and moral concerns regarding gambling in general.
Most anti-gambling initiatives have been spearheaded by the religious groups in the country who have been pushing back at the possibility of having a legalized online betting market. The National Confederation of Trade in Goods, Services, and Tourism (CNC), a lobbying organization representing retailers, remains a staunch opponent of a legalized betting market in Brazil. The group contends that the potential harms outweigh the benefits, citing adverse effects on multiple facets of citizens’ lives, from financial stability to mental well-being.
To reinforce its stance, CNC filed an ADI (Ação Direta de Inconstitucionalidade) in September 2024, challenging the legal standing of the new regulations and urging the court to deem it unconstitutional. Following this, a two-day public hearing to determine the constitutionality of Law No. 14,790/2023 was held at the Federal Supreme Court in mid-November, where all sides were heard from.
Luis Fux, a Federal Supreme Court Justice and ADI rapporteur, explained the need to protect vulnerable consumers, saying:
“The problems that are brought up here, relating to deprived communities, the minor problems and the other serious problems that are highlighted, lead us to the idea that this resolution must be urgent.”
On the other hand, proponents of the legislation have stood their ground to defend their position on why a regulated market would mean growth for what will become one of the largest betting ecosystems in the world. It is projected that once effected, the legal betting industry in Brazil will bring in about BRL4 billion (£542.3 million/€654.7 million/€695 million) in gambling revenue in the first year alone. For supporters of the legislation, legalizing online gambling positions Brazil competitively within the larger global gaming market.
They have also pointed to the expansion of the unregulated gambling market in the LatAm country, noting underground gambling operations do not contribute to the region’s economic growth. This is a far cry from the steady tax revenue that licensed operators will otherwise generate. ANJL, a vocal supporter of a legalized industry, also pointed out that overly strict measures could interfere with or deter efforts to create over 60,000 jobs.
Although not unique to Brazil, the impending ban on bonus offers and gambling advertising marks a turning point in the ongoing global conversation around responsible gambling. By seeking to achieve a balance between regulation and industry growth with a focus on the consumer, the Brazilian government is sending a clear message that there will be a hands-on implementation of all rules set in the law.
The determination to have an impactful industry with little to no risks for the communities underscores the importance of thoughtful policy design, ensuring smoother enforcement and minimizing disruptions in the future. As these reforms unfold, Brazil’s model may inspire other countries looking to adopt gambling to adopt similarly comprehensive and forward-thinking approaches. Operators may also have to pivot towards different methods of customer acquisition, such as focusing on user experience, game variety, and brand trust.
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