Brazilian Finance Ministry Issues New Regulation For Sports Betting Market

On October 27, the Brazilian Finance Ministry (MF) issued a significant regulatory milestone for sports betting activities (Ordinance No. 1,300/2023) which establishes the general framework for national and international companies seeking to operate in the sports betting market in Brazil.

The Ordinance outlines the minimum requirements for obtaining authorization for commercial exploitation of the activity, limiting it to both domestic and foreign legal entities (the latter being required to regular formal presence in Brazil). Other key requirements include demonstrating the lawful nature of the resources supporting company´s share capital, the legal fitness of individuals accountable for company, its partners, ultimate beneficiaries, and key executives, as well as the need to establish a corporate governance structure compatible with the complexity, specificity and risks of the business and the provision of a customer service for bettors, to be based in Brazil and with service in Portuguese, to address inquiries, concerns, complaints, or any other issues related to sport betting.

It is also worthy of note that professional athletes, members of technical and refereeing committees, or managers of Brazilian sports teams are barred from participation in the corporate structure of such entities.

As to communication, advertising and marketing initiatives aimed at promoting these services, the Ordinance mandates the use of warning clauses regarding the potential dangers associated with gambling. These statements must prominently feature phrases like “Play with Responsibility” or another message that underscores social responsibility for the broader public. Furthermore, the Ordinance imposes a series of stringent restrictions on advertising and marketing content including (i) the prohibition of promotional activities within educational institutions, such as schools and universities; (ii) portraying gambling as socially desirable; (iii) statements by celebrities and influencers suggesting that gambling contributes to personal and/or social success, or improving financial conditions; (iv) messages of a sexual nature or that objectify physical attributes; (v) offenses against cultural and/or traditional beliefs; (vi) the participation of children or minors or any marketing messaging directed at them; (vii) the requirement for all advertising to include age restriction warnings, including the “18+” symbol or the warning “prohibited for children under 18”.

As discussed in our last report on this subject, it is worth noting that the National Council of Advertisement Self-Regulation – CONAR may establish additional restrictions and guidelines to MF’s regulations and issue specific recommendations for the communication, advertising and marketing actions, under the terms of Provisional Measure No. 1,182/2023, article 33 §2.

Please feel free to contact fernanda.magalhaes@kasznarleonardos.com if you have any questions or would like to discuss about your specific project.