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Brazil’s gambling regulator has concluded the rulemaking process to implement a new national law on online betting and gaming through the publication of three ordinances establishing formal rules on responsible gaming and advertising, among other key topics.

The Secretariat for Prizes and Betting (SPA) within the Ministry of Finance published three separate ordinances in the Brazilian government’s official journal on Thursday (August 1), bringing its total number of implementing regulations to ten and ticking off all the areas that the SPA outlined in a formal rulemaking schedule published earlier this year.

Regulators had pledged to release all of the rules by the end of July, to ensure that operators would have a clear line of sight into the regulatory requirements ahead of an initial deadline of August 20 to submit applications for a Brazilian licence.

The final three ordinances were published 24 hours after two further regulations on permitted casino games and tax allocations, with earlier rules having already addressed the licensing process, anti-money laundering requirements, technical standards, certifications and payments. 

In a statement, Brazilian betting association IBJR acknowledged “the importance of publishing all the regulatory ordinances for the betting sector within the deadline established by the Ministry of Finance and SPA”.

“As this is a completely new sector in the Brazilian economy, the effort and commitment of these federal agencies in creating regulations that will allow licensed operators to operate in a transparent, sustainable, fair and safe manner in Brazil, one of the largest markets in the world for this industry, is clear,” added the group, whose members include Flutter, bet365, Entain and Betano.

Responsible Gaming, Advertising In Focus

The most detailed of the three regulations published on Thursday is , which combines two anticipated ordinances into one by addressing both responsible gaming and advertising requirements alongside the rights and responsibilities of operators and players participating in fixed-odds betting. 

The advertising rules established in the ordinance both codify and expand upon pre-existing self-regulatory standards that were adopted by Brazilian advertising council CONAR at the start of this year. 

In a statement, the SPA noted that one intention of the rules was to ensure that operators “may be held responsible for any abusive or misleading advertising carried out by their contracted influencers via social media”.

The role of influencers in online gambling has attracted close scrutiny and even criminal investigations in Brazil in recent months, amid widely reported instances of social-media personalities promoting prominent online casino games and misleading players as to their chances of winning large jackpots.

Article 21 of Ordinance 1.231 makes operators formally responsible for the marketing activities of any third parties or affiliates who promote their platforms.

Those marketing partners must be subject to written contracts that oblige them to comply with Brazilian advertising regulations and standards, with those contracts also available for review by the SPA.

Among other rules, any ads or marketing that involve renowned personalities or celebrities suggesting that gambling contributes to personal, social or financial success will be prohibited.

Further advertising restrictions imposed by the ordinance broadly overlap with the CONAR standards but also layer on extra provisions, such as banning any marketing that contains a “call to action” for players to immediately place a bet or establish an account. 

On responsible gaming, the ordinance does not expressly require operators to obtain information on the income of their players, as had been suggested by SPA secretary Régis Dudena in several recent interviews with Brazilian media.

Still, operators will be required to implement analytical tools to establish specific risk profiles for potential problem gamblers. 

They also must adopt formal policies to monitor the activities of all players and intervene with alerts or to suggest the adoption of limits, self-assessment tests or even self-exclusion, based on those defined risk profiles. 

In more extreme cases, operators will be expected to step in to suspend players where they are deemed to be “at high risk of addiction and pathological gambling disorders”.

Dudena told prominent Brazilian radio station CBN on Thursday that obliging licensed operators to monitor their players and then intervene based on observed changes in their behaviour makes sense because “the profile of each bettor varies a lot, according to every socio-economic profile”.

“Therefore, to impose pure-and-simple limits, for example financial limits, from our point of view as regulators, that does not interest us,” Dudena added.

The sections of Ordinance 1.231 addressing the rights and responsibilities of players and operators encompass a wide range of topics, from consumer complaints, to know your customer (KYC) rules and account authentication.

Among other regulatory requirements, the ordinance:

Enforcement & Audit Processes

The two other ordinances also published on Thursday are generally more administrative in nature, establishing processes and procedures for how the SPA may penalise operators in the event of non-compliance, while also clarifying the regulator’s authority to conduct inspections and audits.

Law 14.790 as enacted in late December already requires operators to be monitored in real time via a central system overseen by the SPA. 

Ordinance 1.233 on enforcement procedures similarly reflects that underlying law by listing specific violations and enabling the SPA to issue fines of up to 20 percent of an operator's revenue, up to a maximum amount of R$2bn (approximately US$350m).

However, the ordinance also establishes the possibility for the regulator to accept a settlement in lieu of a formal action, provided the proposed settlement ensures that the operator ceases whatever practices are under investigation, corrects any irregularities and compensates for any damages, and pays a financial penalty.  

Publication of the last of the SPA’s planned regulatory ordinances means the stage is now set for the regulator to move on to the licensing rather than rulemaking phase of the implementation process, although it is also expected that officials will continue to issue points of clarification over the coming weeks and months.

The SPA maintains an on its website where it publishes responses to questions submitted by prospective operators and other stakeholders.

For instance, the SPA advised earlier this week that certification providers can rely upon previous compliance tests conducted in international markets, but only if the rules of those markets are aligned with Brazil’s and the certification provider can attest that all the requirements of Brazilian regulations are met.