Hedging your bets: how to regulate Brazil’s multi-billion-dollar sports betting market

In Brazil, casinos and book makers have been banned since 1946, and yet the act of placing a sports bet is not exactly illegal.  Although our 1946 legislation[i] prohibited the establishment of land-based structures for gambling, the subsequent evolution of the internet has allowed online betting from international servers to operate in a non-regulated “grey area”.

After decades of tolerating this legal loophole, Brazil is finally ready to regulate its whole sports betting market. Federal Law nr. 13.756 of December 2018[ii] primarily regulates the Brazilian national lottery, but it also includes provisions to regulate sports betting (a category defined as "fix-quota betting related to sporting events”) and its related tax revenue allocation. Pursuant to Article 29 of the Law, the “fix-quota betting” category will be a public service, and the Federal Government will be able to issue licenses to commercial operators both online and in land-based structures.  

Brazil’s Federal Finance Department now has two years – extendable for another two – to develop suitable regulations for the industry, and the Brazilian House of Representative’s Sports Commission is already scheduling public debates to discuss its regulatory procedure and directions.  Concurrently, betting companies are paying close attention and are already positioning themselves to invest in the country.

In light of these developments, this article examines how Brazil’s sports industry might best develop a modern regulatory framework to prepare for the inevitable growth of the betting market.  It also asks whether the UK could be used as a model for sports gambling regulations.  Specifically, it looks at:

• Why regulations are necessary;
• The fundamental pillars of a strong regulatory framework (case study – UK); and
• The key opportunities and challenges from the perspective of Brazilian football.