The year 2022 has been very promising in terms of regulating technologies. Some legislative projects have been highlighted in regulating the use of artificial intelligence mechanisms, cryptoactives and social media.

In this scenario, there is great expectation of the market in relation to the advance of the regulation of sports betting, especially because we are in world cup year.

This activity is successful in several countries, with very expressive numbers. In the United States, the practice generated more than $4 billion in revenue in 2021, a growth of almost 180% compared to 2020.

Sports betting (sports betting) are just one of the gaming practices species. Its regulation needs to be considered, alongside, for example, the regulation of lotteries, animal racing betting, physical and online casinos, fantasy games, poker or other games understood to be skill, games and applications.

In Brazil, the modality is already usual and practiced on platforms hosted outside the country, which does not violate rules associated with the practice of games, such as the Law of Criminal Misdemeanors, which in its art. 50 considers the practice of gambling a criminal offense.

Before dealing with the regulation of sports betting in the country, however, it is worth examining two points:

  • the reasons why the Gambling it is regulated; and
  • the main issues justifying legal concern with the subject.

Among the reasons for regulating the Gambling, stand out:

  • the interest in the tax profitability provided by the activity;
  • economic development promoted by the evolution of trade interrelations; and
  • protection of the rights of vulnerable publics (children, the elderly, etc.).

Regarding the concerns and risks involved, the need to:

  • protect responsible gambling;
  • bring legal certainty to investors in the sector and other services involved (financial institutions, advertising agencies, etc.);
  • establish standards of compliance robust;
  • protect users (consumers) in matters relating to fraud, vulnerable public and processing of personal data;
  • avoid the use of platforms for the commission of crimes (especially money laundering);
  • follow appropriate advertising standards;
  • provide legal-contractual and intellectual property protection in all industry relations;
  • contain the increase in cases of pathological gamblers and the resulting social problems; and
  • mitigate the practices of match fixing.

The regulation of online sports betting in Brazil has begun more markedly with the Law 13,756/18. In article 29, this lottery modality is defined as fixed quota bets:

"Art. 29. Lottery is created, in the form of an exclusive public service of the Union, called fixed quota bets, the commercial exploitation of which will take place throughout the national territory. § 1 - The lottery modality of which the Caput this article consists of a betting system related to real sports-themed events, in which it is defined, at the time of the bet, how much the bettor can win in case of correct prognosis".

Regardless of the discussions on the definition established in the law (bets would not exactly be a lottery mode, for example), the fact is that fixed quota bets (or sports bets, online or not) are defined in the order as betting systems related to real sports-themed events, in which, at the time of the bet,  the bettor knows how much he can win if the prognosis of the bet is confirmed.

By detailing the concept a little, you can extract the following elements:

  • there is a bet contract signed with the promise of a payment to the user, if the prognosis is confirmed;
  • the bet must be tied to a real sports-themed event, which includes any sporting event – such as football, chess, e-sports –, but excludes fanciful or non-real situations;
  • the activity must be done by a physical or digital system (set of organized elements), usually supported by the well-known betting platforms that exploit the business (bookmakers); and
  • when the bet is made (either before the sporting event or during), the bettor already knows what amount he will receive if the prognosis of his bet (future results of the sporting event) is confirmed (staked result is equal to the final actual result).

Paragraphs 2 and 3 of Art. 29 defined that such bets will be authorized or granted by the Ministry of Finance, which must regulate the subject within two years after the publication of the law, a renewable term for up to two more years. That is, the maximum deadline is December 2022.

The regulation is in charge of the Secretariat of Evaluation, Planning, Energy and Lottery (Secap) of the Ministry of Economy, and some drafts of the regulatory decree have already circulated.

One of the points that should be addressed in this regulation is the legal definition of the agents involved in this market – who are the regulator, the bettor, the operator, those who provide services to operators, resellers etc.

Another point is how the authorization of the exploitation of the activity will be made:

  • monopoly (most unlikely), limited number of players or open number of players (global trend in Europe, for example, 25 out of 29 countries follow this form);
  • under authorisation, authorisation or concession scheme (the tendency is to be by the authorisation scheme);
  • for how long; and
  • under what criteria.

A third aspect concerns the definition of the powers of the Ministry of Economy and Secap in the regulation, supervision and supervision of this market and how this will be done.

The decree should also establish the obligations of the agents involved in the exploitation of sports betting, such as ensuring responsible gambling and the integrity of betting, mitigating the risks mentioned above and respecting appropriate advertising parameters.

It is also expected that the regulatory decree will regulate the tax operationalization of the collection of the amounts involved in the exploitation of bets.