Brazil’s government has called for an immediate ban on all betting bonuses and restrictions on advertisements targeting minors.
The change, published in Brazil’s Official Gazette today (19 November), comes as the country’s online betting market prepares to launch on 1 January 2025. It also follows months of heightened scrutiny on the sector, parts of which are still causing obstacles to the rollout.
The National Consumer Secretariat (Senacon), the government body overseeing consumer protection, has issued a preliminary order urging swift passage of measures to prohibit marketing strategies tied to betting bonuses. The directive also bars any fixed-odds betting advertisements targeting children and adolescents.
This move is the latest in Brazil’s comprehensive effort to regulate the growing gambling industry. Earlier this month, the Supreme Court held a two-day hearing to evaluate the constitutionality of Brazil’s betting laws, enacted in December 2023.
Among the rulings was a ban on using social welfare payments, such as those from the Bolsa Familia programme, for gambling activities.
That decision was partly based on a July study from the Central Bank, which revealed that 20% of funds disbursed through the Bolsa Familia programme in August were spent on online gambling.
Further surveys indicated that some players had diverted money intended for essential needs, including medicine, food, and clothing, toward gambling activities.
The timing of the clampdown is significant as Brazil’s online betting market edges closer to its official debut. With regulatory frameworks still taking shape, the government is keen to establish safeguards to prevent exploitation and ensure the industry operates responsibly.
Strict penalties for non-compliance
The new measures target operators listed under the Secretariat of Prizes and Bets’ (SPA) approved companies during the transition period, which runs from October 1 to December 31.
Operators found violating the advertising bans will face steep penalties, including daily fines of R$50,000 ($8,671) until full compliance is achieved.
Senacon’s order specifies that all promotional activities, even those intended solely to publicise betting services, must cease immediately. Additionally, a detailed report analysing the implementation and impact of these measures is required within 10 days of the order’s issuance.
The focus on advertising restrictions comes in response to broader concerns and pressure to protect minors and financially vulnerable populations. By banning betting bonuses, the government aims to reduce the likelihood of impulsive or reckless gambling behaviour.
The prohibition also aligns with findings from the Central Bank and other studies that suggest gambling’s potential to exacerbate financial instability among at-risk groups.
For many households relying on the Bolsa Familia, gambling with welfare funds has raised alarms about the unintended consequences of an unchecked betting market.
Industry implications
Brazil’s regulatory tightening, which has included crackdowns on numerous operators, poses challenges for licensed operators eager to capitalise on the burgeoning online betting market. With marketing tools like bonuses effectively off the table, companies may need to adjust their strategies to comply with the new guidelines.
The ban also highlights the growing tension between fostering a lucrative betting market and safeguarding public welfare. While gambling operators see Brazil as an attractive emerging market, the government appears determined to prioritise consumer protection over rapid industry expansion.
Beginning this week, the Ministry of Finance will initiate the final requirements stage for the certification of betting companies that registered by 20 August to legally operate in Brazil. This update comes from Regis Dudena, the Secretary of Prizes and Bets, during an interview with media outlet JOTA.
He also mentioned that the initial list of approved operators is anticipated to be published in late December.