The Gambling Law Review: Brazil


Brazil is the largest and most populous country in Latin America, with a total area of 3,265,080 square miles and a population of more than 214 million people (it is the fifth-largest country in the world with regard to size and population).2 Brazil is a federation divided into 26 states, one federal district and 5,570 municipalities.

Since 2012, owing to the depreciation of the real against the US dollar and the economic recession that began in 2015, Brazil's GDP has decreased, and the country is now the world's 12th-largest economy,3 having formerly been the sixth largest in 2011.

Almost all gambling activities have been prohibited in Brazil for over 70 years. Since the general ban on games of chance in 1941, the only legal gambling activities are the lotteries under the state monopoly, and horse-race wagering. According to Brazilian law, poker is a game of skill and is, therefore, not illegal.

With the recent economic turmoil, gambling regulation (and taxation) may help the government to raise revenues. Several bills of law are currently under discussion in the Congress concerning casinos, bingos, online gaming and lotteries. Integrated resort casinos were included in the Tourism Law Bill, and an Integrated Resort Bill was introduced in 2020.

The opening of the Brazilian gambling market started with the creation of the virtual and land-based instant lottery called Lotex by Law No 13,155/2015. The tender for the privatisation of Lotex took place in May 2019, but the only bidding consortium forfeited the award in October 2020. As result, the Brazilian government will need to reconfigure the business model and will probably lower the financial and technical requirements to attract more bidders in a future attempt to privatise Lotex.

In December 2018, Law 13,756 created the fixed-odds sports betting lottery method, granting powers for the Ministry of Economy to regulate it within a four-year time span and issue licences. While there was expectation for sports betting regulation to be enacted in 2020, after the covid-19 pandemic the Ministry of Economy was focused on providing financial assistance to other governmental entities and also directly to citizens.

Notwithstanding the setbacks, the Secretariat for Public Policy Evaluation, Planning, Energy and Lottery (SECAP), which is under the Ministry of the Economy, is in charge of regulating sports betting and has already issued three public consultations on the matter, and it is expected that regulation will be enacted in the first semester of 2022, before the FIFA World Cup in Qatar. SECAP succeeded the Secretariat of Fiscal Monitoring, Energy and Lottery of the Ministry of Economy (SEFEL), which was extinguished by Decree No 9.266/2018.

i Definitions

Gambling, in general, is not regulated in Brazil. In fact, since the 1940s, Brazil has been a closed market for gambling, with only state-owned lotteries and horse-race wagering. For a brief period in the 1990s, bingo and slot machines were permitted, but they were banned in the mid-2000s.

As a consequence, Brazil's gambling regulation is still incipient. 'Game' is a contract type expressly nominated, but not defined, by the Brazilian Civil Code. Its definition is provided by jurisprudence.

Luiz da Cunha Gonçalves4 defines a game contract as 'a commitment, agreed as for hobby or as for desire for money, between two or more individuals, in which each player agrees to pay a certain sum of cash or something else to the other party(ies) if he/she loses, based on some future event, which implementation depends, at least in part, on the activity of the players'.

Clóvis Beviláqua,5 the author of the previous Brazilian Civil Code, defines a game contract as a random contract, in which two or more people promise a certain sum, among the contractors, to the person for whom the result of chance is most favourable. In the same vein, Pablo Stolze Gagliano and Rodolfo Pamplona Filho6 provide a very detailed explanation on game contracts:

In fact, the contract game can be defined as a legal transaction whereby two or more people hold a particular promise (usually with pecuniary content) in favour of the person who achieves a favourable result in the performance of an act in which everyone participates.
Note that the game (and thus the success or failure of each party) necessarily depends on the performance of each party (called a player), either by his intelligence, or by his skill, strength, or simply luck.
The bet contract, in its turn, is a legal transaction in which two or more people with different opinions on a certain event, promise to perform a particular action (in general, with monetary content) to the benefit of the party whose opinion prevails. Hence, in the bet, there is not the requirement for the active participation of each party (called a bettor) to influence the outcome of the event, but rather only the expression of her/his personal opinion.

The difference between a game and a bet is that the result of a game will depend on the action of the parties, while the result of a bet depends on facts unrelated to the parties' will. It is important to highlight that these definitions have been created by jurisprudence and are not expressly set forth by law, although they are widely accepted and applied by the courts.

'Games of chance' are defined by Article 50 of Decree-Law 3,688/1941 (the Misdemeanour Law) as:

  1. a game in which winning or losing depends exclusively or principally on chance;
  2. bets on horse races outside the racetrack or other authorised venues; and
  3. bets on any other sport competition.

'Public place' is defined as:

  1. a private house in which games of chance are held, when those who usually take part are not members of the family that live at the house;
  2. a hotel or collective residence where the guests or residents are offered games of chance;
  3. the headquarters or premises of a company or association where games of chance are held; and
  4. an establishment intended for the operation of games of chance, even if its purpose is disguised.

Games of chance are treated as misdemeanours, which are recognised by law as offences punishable by minor penalties (Article 61 of Law No. 9,099/95). In other words, a misdemeanour is a less offensive crime when compared to a criminal violation of Brazilian law. The purpose of using the term 'misdemeanour' is to implement the 'moral police', which, according to Professor Humberto José da Nova, includes 'safeguarding morality' in order to 'prevent certain illegal and vicious acts, or defend certain moral sentiments regarded as indispensable to harmonious social coexistence, the effects of which are harmful to the interests of the collectivity'.7

Contrary to this, 'games of skill' are those whose results depend on ability of the player, more than on luck. These are lawful.

'Lotteries' are defined by Article 51 of the Misdemeanour Law as the operation of payment of prizes depending on the result of the draw of tickets, lists, coupons, vouchers, signs, symbols or similar means.

The same Article 51 of the Misdemeanour Law prohibits the operation or promotion of unauthorised lottery games in Brazil, including the distribution of foreign lottery tickets in the country. The Brazilian numbers game jogo do bicho (the animal game), which is similar to a lottery, is also prohibited.

Horse-race betting is regulated by Law No. 7,291 enacted on 19 December 1984 and its 1988 regulation, Decree No. 96,993.

Finally, contest regulation is subject to federal jurisdiction in Brazil. Therefore, there is equal legal treatment in all of the 26 states and the Federal District. In Brazil, whenever a contest is held to promote the sale of products or to promote brands, it is deemed as a prize promotion, subject to Law No. 5,768 of 20 December 1971, Decree No. 70,951 of 9 August 1972 and Law 13,756 of 12 December 2018.

ii Gambling policy

As a rule, gambling has been prohibited in Brazil since 1946, when the last casino permits were cancelled. A number of scholars believe the gambling prohibition in Brazil was a reaction to the industrialisation of the country, because of the need to make free men dedicate their time to work and not to leisure. This, together with the religious belief that 'in the sweat of thy face shalt thou eat bread', caused gambling to be seen as something negative. However, this belief is no longer socially widespread in Brazil.

There is, however, a general perception that gambling activities in Brazil are a cover for money laundering and that gambling activities are operated by criminal organisations. This derives from the fact that, despite the general prohibition currently in place, bingo halls, slot machines and jogo do bicho can be easily accessed in Brazil.

iii State control and private enterprise

Poker and other games of skill, as well as social games, can be operated by private entities. These activities do not require any specific licence.

Horse-race wagering is restricted to non-profit entities that own the racetracks, duly authorised by the Ministry of Agriculture, Livestock and Food Supply. These entities may appoint agents to facilitate wagering on their behalf, and can also hire private suppliers, which are not subject to licensing or any specific regulation.

Until 2020, lotteries could only be state-owned. Caixa was granted the control of the federal lottery as result of Decree No. 50,954 of 14 July 1961, which cancelled all lottery licences granted to the private sector.

Federal and state lottery operators (i.e., Caixa and the state's equivalent entities) could contract suppliers by means of public procurement. There was no specific licence requirement for these suppliers. This traditional framework suffered drastic changes over the past years.

In September 2020, the Supreme Court ruled as unconstitutional the federal monopoly on public services of lottery operations, namely an 'unjustified privilege granted to the Union by a centralised piece of legislation enacted during the Brazilian military regime'.8 Therefore, the federal government still retains the exclusive constitutional competence to legislate on lottery issues, but both the states and the federal government share the right to operate and offer lottery products.

This ruling has a direct impact on sports betting, as all states will be able to operate sports betting within their territories. In this scenario, the federal government will be able to issue federal licences that will allow the licensees to operate both online and retail businesses all over the national territory, regardless of any state licence.

Each state will be able to operate sports betting within its borders, directly or with a private operator as a partner. Since making a state lottery available outside the respective state territory is a criminal misdemeanour in Brazil, there will be a lot of discussion on how the place where the online bet is made will be determined.

At the moment, almost 20 out of the 27 states and the Distrito Federal have initiated their political and legislative proceedings aiming at creating their own lotteries or modernising and enhancing their lottery products. In the vast majority of cases, those political movements and legal transformations involve partnering with the private sector to turn lotteries more effective and profitable.

Additionally, after unsuccessful attempts to delegate one of the CAIXA's lottery modalities to private operators, the federal government is in the process of organising another public bid for privatisation of instantaneous lotteries (sweepstakes).

iv Territorial issues

Starting in 1993, when bingo and slot machines were legalised, the state lotteries started to develop new gaming products, issuing authorisations for bingo venues, slot machine parlours and even online gaming based on state laws that allowed these activities in the territory of each state. Only in 2007 did the Brazilian Supreme Court definitely rule that states and municipalities could not legislate on gambling. For this purpose, a binding decision (binding decision No. 2) that has to be followed by lower courts established that: 'Any state or district law or legislative act that regulates raffles and consortiums, including bingo and lotteries, is unconstitutional.'

In 2009, however, when faced by a claim that the State Lottery of Rio de Janeiro's expansion towards keno-style gaming was unconstitutional,9 one judge from the same Supreme Court declared that state lottery regulations enacted before binding decision No. 2 of 6 June 2007 are valid.

v Offshore gambling

A legal loophole currently allows offshore operators to offer their gambling products to Brazilian citizens. One of the general rules about contracts in the Brazilian Law is that a contract by and between absent parties is deemed executed in the place of the proponent. This is set forth by Article 9, Paragraph 2 of the Law of Introduction to the Brazilian Rules of Law (Decree-Law No. 4,657 of 4 September 1942) and repeated in Article 435 of the Brazilian Civil Code.

As a consequence, if an offshore operator's website is hosted in another jurisdiction where gambling is authorised, the contract between the Brazilian client and that operator is valid and subject to the law of operator's jurisdiction. This has some legal consequences in Brazil regarding consumer and data protection laws and unauthorised transborder financial transactions, the latter with potential criminal aspects. So far, however, there have not been any attempts by the Brazilian government to bring any action against foreign operators.

Legal and regulatory framework

i Legislation and jurisprudence

According to the Misdemeanour Law, games of chance are prohibited in Brazil. Any form of gambling activity that has not been expressly legally authorised may be considered illegal under the scope of the Act and, therefore, anyone carrying out such activity may be prosecuted. Decree Law No. 50,954 of 14 July 1961 establishes Caixa's monopoly on lotteries, and Law No. 7,291 of 19 December 1984 and Decree Law No. 96,993 of 17 October 1988 regulate horse-race betting.

In the southern state of Rio Grande do Sul, an appellate court decision has stated that gambling is not prohibited because the prohibition set out in Article 50 of the Misdemeanour Law would be unconstitutional. The public attorney has appealed that decision and now the case is pending judgment by the Brazilian Supreme Court,10 where it has been granted 'general repercussion' effects, which means that the decision of this case will be binding to all other similar cases in the country. Until the judgment is resumed, which is expected for April 2022, the effects of the prior decision from the lower court remain in force, and all prosecution cases related to Article 50 are halted until the Brazilian Supreme Court renders a final opinion.

In March 2022, the Appellate Court of the State of São Paulo reached a similar conclusion by adopting the same rationale of its Rio Grande do Sul sister court, and dismissed accusations against an individual suspect of hosting games of chance.

ii The regulator

SECAP is in charge of regulating lottery activities in Brazil. State lotteries must comply with the gaming standards set forth by the Secretariat and may not create new gaming products.

The Ministry of Agriculture, Livestock and Food Supply is the entity responsible for the regulation of horse racing.

Poker, recognised as a sport by the former Ministry of Sports (currently a division of the Ministry of Citizenship), is not regulated. Neither are social games nor any other kind of games of skill.

The free distribution of prizes is regulated by the Ministry of Economy and is subject to previous authorisation by Caixa or by the Secretariat, depending on the operator.

iii Remote and land-based gambling

There is no distinction between online gambling and bricks-and-mortar gambling for horse racing, provided that the general wagering plan expressly states the possibility of both. For lotteries, Caixa does not allow their points of sale to accept remote bets but allows online bets to CAIXA's banking clients.

iv Land-based gambling

Land-based gambling in Brazil is restricted. Caixa has licensed over 13,000 lottery points of sale that are privately operated with permission (small venues that also operate as bank assistants, accepting payments of general services bills). Jockey clubs have their own agencies and agents (around 200), that are authorised to accept wagers on local and international races. Poker has become very popular in Brazil, and there are many poker clubs open in the largest cities.

Law No 13,756/2018, which introduced fixed-odds sports betting as a lottery modality, sets forth that it can be offered by both land-based and online operators. Further, Decree No. 9,327/2018, which regulates Lotex, defines physical bets as those made by the client upon the purchase of a printed ticket and virtual bets as those made by the client via electronic channels.

The fixed-odds betting lottery method was created by Law 13,756/2018, in the form of an exclusive public service of the Union, which commercial exploitation will take place throughout the national territory. This lottery method's legal definition is a system of bets related to real sports events, in which the prize the bettor can win in the event of a successful outcome is defined at the time the bet is posted.

Types of bets allowedOnly fixed-odds on sports events
RegulatorMinistry of Economy
RegulationTo be issued by the Ministry of Economy in 2022 (considering the term already renewed for additional two years)
LicensingAuthorisation (without tender) or concession (with previous public tender), yet to be defined by the regulation
Number of licencesTo be regulated by the Ministry of Economy
Mandatory payments (calculated on turnover)
  • 0.10 per cent for social security;
  • 0.82 per cent of the remaining balance for the educational entities that fulfil national requirements for basic education evaluations, according to the Ministry of Education;
  • 2.55 per cent to FNSP (Public Safety National Fund)
  • 1.63 per cent of the remaining balance for the Brazilian sports entities that assign the rights to use their names, brands, emblems, hymns, symbols and the like for dissemination and the implementation of the fixed-odds betting lottery;
  • 95 per cent at most to cover expenses of cost and maintenance of the operating agent of this lottery type.
  • 0.05 per cent for social security;
  • 0.82 per cent of the remaining balance for the educational entities that fulfil national requirements for basic education evaluations, according to the Ministry of Education;
  • 2.55 per cent to FNSP (Public Safety National Fund)
  • 1.63 per cent of the remaining balance for the Brazilian sports entities that assign the rights to use their names, brands, emblems, hymns, symbols and the like for dissemination and the implementation of the fixed-odds betting lottery;
  • 95 per cent at most to cover expenses of cost and maintenance of the operating agent of this lottery type.
Taxation on players' winnings30 per cent withholding tax on each prize over 1,903.98 reais*
Taxation on the operatorVaries between 0.174 per cent and 0.294 per cent of the previous month's payout, according to Annex I of the Law
Other applicable taxesOrdinary corporate taxes:
  • Income Tax: 15–25 per cent on actual profits;
  • Social Contribution on Profits: 9 per cent on actual profits;
  • PIS and COFINS: 9.25 per cent on GGR (some expenses are deductible); and
  • Municipal Services Tax: 2-5 per cent on GGR.
AdvertisingShall be guided by the best practices of corporate social responsibility, according to regulations yet to be defined
AMLThe operator will have to send information to the Financial Activity Control Council (COAF), according to regulations yet to be defined
* This amount may change yearly and corresponds to the income tax exemption limit for individuals

The Ministry of Economy has the statutory period of up to four years to regulate the fixed-odds betting lottery method. A critical part of the regulation will be the definition of the competition model: whether the number of licences will be limited or unlimited, and as a consequence, if a public tender for licence will take place (in case the number of licences is limited) or if the applicants will only have to pay a licence fee and comply with the regulatory requirements. SECAP, which is in charge of regulating sports betting, has already issued three public consultations on the matter and it is expected that regulation is released within the next months.

v Remote gambling

Brazil's federal legislation does not contain any specific provision related to online gambling. Horse-racing entities already offer bets online in Brazil, and Caixa only offers online betting for their account holders. The majority of the remote gambling activities in Brazil involve offshore operators, mainly sports betting and bingo.

vi Ancillary matters

There are no specifics provisions at the moment.

vii Financial payment mechanisms

There are no specifics provisions at the moment.

The licensing process

i Application and renewal

The application for a horse-racing gambling licence should be made before the Ministry of Agriculture. The applicant must be a non-profit entity legally incorporated in Brazil, in possession of a racetrack, and also needs to demonstrate the technical and economic viability of the weekly racing schedule and the floor plan of the race field. That entity must present the draft of a general betting plan (which includes the rules applicable for each game to be run by the operator, such as prize, ticket value, minimum and maximum betting amounts, and payout).

Horse-racing entities must also apply for their agents' licences before the Ministry of Agriculture, Livestock and Food Supply. This application must be made by the authorised horse racing entity, which must be entirely responsible for any and all acts of the agent. The agent licence is granted to the agent (person or company) to facilitate wagering only at the specified venue. Horse-racing personnel and suppliers do not need to apply for licences and are not regulated.

Both authorisations, for the horse-racing entities and their agents, are valid without any time limitation. Revocation may occur when there is a non-observance of rules and procedures after the due administrative process.

ii Sanctions for non-compliance

Article 22 of Law No. 7,291 of 19 December 1984 and articles 91 to 97 of Decree-Law No. 96,993 of 17 October 1988 define the penalties applicable to horse-race betting operators in breach of those regulations: (1) penalty; (2) fine; and (3) revocation of licence.

Article 50 of the Misdemeanour Law establishes that the operation of games of chance in a public place or in a place available to the public is subject to imprisonment, from three months up to one year, and a fine. In addition, introducing foreign lotteries in Brazil with the objective of sale results in a penalty of a prison term of between four months and one year, and a fine.11

Taking part as a player in illegal gambling may result in a fine. As Article 50 of the Misdemeanour Law has been recently amended by Law No. 13,155 of 4 August 2015, it is now the case that players and affiliates involved with online or offline illegal gambling are subject to a fine ranging between 2,000 reais and 200,000 reais.

The penalty for advertising unlicensed lotteries is a fine. According to Article 50 of the Advertising Self-Regulation Code of the National Council for Advertising Self-Regulation (CONAR), any advertising that 'induces to criminal or illegal activities' is subject to penalties that may include a warning, a recommendation to modify the advertisement and a recommendation to suspend it.

Those who operate international payments to offshore gaming companies without the due reporting to the Brazilian Central Bank (and consequent payment of taxes) may also be held liable for unreported remittance of funds, according to Article 22 of Law No. 7,492 of 16 June 1986, subject to imprisonment from two to six years and a fine, plus the payment of all due taxes.


The Brazilian Civil Code classifies bets as contracts, therefore only those over 18 years of age are legally allowed to gamble. This is also set forth in the Brazilian Child and Adolescent Protection Statute, which rules that venues where billiards and snooker are played, and venues where bets are made, should not permit children and teenagers to enter.

Although they are not specifically aimed at gambling activities, general advertising rules in Brazil that may have an impact on gambling are included in Decree-Law No. 57,690 of 1 February 1966 and Decree-Law No. 4,563 of 31 December 2002, and anti-money laundering rules in Law No. 9,613 of 3 March 1998 and Law No. 12,846 of 1 August 2013.

Article 1 of Law No. 9,613/1998 defines the crimes related to laundering or concealment of assets, rights, and valuables as the 'concealment or dissimulation of the nature, origin, location, availability, handling or ownership of assets, rights or valuables directly or indirectly originated from criminal activities'.

According to Article 10 of the same law, all companies that pay prizes are obligated to identify their clients and keep records for at least five years. Brazil has been a member of both the Financial Action Task Force and the Financial Action Task Force of South America since 2000.

Law No. 12,846/2013 is the anti-corruption law in Brazil, which focuses on companies (either Brazilian or foreign) with operations in Brazil. This law created civil and administrative responsibilities, as well as criminal responsibilities, and may be compared to the UK Bribery Act.


Lottery operators are not taxed, since they are currently owned and operated by the government. Their revenues, however, have pre-established social destinations set forth by law, such as funds for sports, education, health, culture, etc.

Jockey clubs, as non-profit entities, pay ordinary corporate taxes (with exception to the taxes on income), and the contribution to the Coordination Commission for National Horse Breeding of 1.5 per cent of the adjusted net win (wagers minus prizes for winning bets minus prizes for horsemen).

The gamblers are also taxed. As per Article 676 of Decree Law No. 3,000 of 26 March 1999, all prizes paid for lottery and horse-racing winnings are subject to an exclusive withholding income tax of 30 per cent of the prize amount.

Poker prizes, on the other hand, are subject to a different income tax withholding. According to the Brazilian Revenue Service,12 whenever the prize depends on the performance of the participants, it is deemed as remuneration of the work, regardless of whether the prizes are paid in cash or in the form of goods and services. Therefore, if the prize is paid by a Brazilian legal entity to an individual fiscally resident in Brazil, it will be subject to personal income tax withholding13 calculated based on the following progressive tax rates:

Income at or over
Up to
Tax rate
(per cent)
Deductible tax amount
4,664.68and above27.5869.36

Sports betting and casino winnings obtained by Brazilian players on offshore websites or land-based operators are subject to taxation in Brazil, under the same percentages indicated in the chart above.

Law 13,756/2018 sets forth that all prizes from the fixed-odds sports betting lottery that are above the exemption limit of the personal income tax (1,903.99 reais) will be subject to 30 per cent income tax withholding.

Advertising and marketing

Article 57 of the Misdemeanour Law expressly rules that publishing, even if indirectly, the operation or results of unauthorised lotteries in newspapers, radio or any other format is a contravention, punishable by a fine. As to other forms of gambling, there is no express reference to advertising restrictions in the criminal law.

Decree-Law No. 57,690 of 1 February 1966 and Decree-Law No. 4,563 of 31 December 2002 regulate advertising in Brazil and, according to the latter, all advertisement in Brazil must comply with the rules set forth by the Standard Rules Executive Council (CENP).14 This council is responsible for regulating the commercial relations between advertisers and agencies, while CONAR is responsible for ensuring ethics in advertising content.

Both CENP and CONAR are non-governmental organisations formed by members of the advertising industry to define their own statutes and codes. CONAR's Self-Regulation Code also includes a general rule that advertisements should not contain anything that 'induces criminal or illegal activities'.15

Based on this general rule, many gaming and poker companies have faced difficulties trying to advertise in Brazil. In 2009, CONAR prohibited Full Tilt Poker from advertising on the Discovery Channel. That decision assumed that poker is a game of chance, illegal in Brazil. After deliberation, CONAR decided that poker is a game of skill, and allowed the advertising. In that same year, CONAR also prohibited Sportingbet from advertising in Brazil. This prohibition was upheld by the Brazilian courts after it was challenged by Sportingbet.

In several situations when CONAR suspended advertising of sports betting companies located and licensed in other countries based on Article 21 of the Brazilian Code of Advertising Self-Regulation, these decisions often ignored the territoriality rule of Article 2 of the Misdemeanour Law itself, which prevents this criminal law from being applied to acts committed outside national territory.

As a result, companies headquartered abroad have been operating with websites in Portuguese and accepting bets from Brazilian internet users for years, advertising websites without any betting content, such as statistics pages or sports tips. As a rule, there has not been any restriction for advertising social gaming websites (the '.nets'), since their activity is legal in Brazil.

With the approval of Law 13,756 in December 2018, the legal ground used by CONAR to prevent the advertising of betting sites is no longer valid as sports betting is no longer illegal. One consequence of the legalisation is that numerous soccer teams are already being sponsored by sports-betting companies.

As explained, contest regulation is subject to federal jurisdiction in Brazil: whenever a contest is held to promote the sale of products or to promote brands, it is deemed as a prize promotion, subject to Law No. 5,768, of 20 December 1971, Decree No. 70,951 of 9 August 1972, and Law 13,756, of 12 December 2018. The following ordinances also apply:

  1. Technical Note 11/2018/COGPS/SUFIL/SEFEL-MF provides for an explanatory list of cases in which the free distribution of prizes depends on the prior authorisation of SECAP;
  2. Ordinance MF 67, of 31 July 2017 establishes that all authorisation requests addressed to SECAP must be made online, through the Prize Promotion Control System;
  3. Ordinance MF 422 of 18 July 2013 establishes the cases in which contests are not deemed as exclusively artistic, cultural, sportive or recreational for free prizes or awards distribution purposes; and
  4. Ordinance MF No. 41 of 19 February 2008 regulates the free distribution of prizes for advertisement purposes, when performed by raffle, gift certificates, contests or similar operations.

The four types of free distribution of prizes to consumers are outlined in more detail below:

  1. raffle: raffling elements are distributed, numbered in series, and those to be awarded are defined based on the results of the extraction of the federal lottery or on a combination of numbers from such results;
  2. gift certificates: gift certificates are randomly hidden inside a product or the product's respective package. The gift certificate will be exchangeable for the prizes in the exchange stations;
  3. contests: contests are based on forecasts, calculations, intelligence testing, games of skill or competitions of any nature;
  4. similar operation: type conceived from combination of factors suitable to each one of the other types of prize promotion, preserving the original concepts for qualifying competitors and verifying the winners. It may be presented as 'similar to contest', 'similar to gift certificate' and 'similar to raffle'; and
  5. contests for advertising purposes must be authorised by SECAP.

In order to avoid fraud or confusion between cultural contests and prize promotions, the Brazilian Ministry of Economy has defined some procedures to assess whether a contest is considered to be a prize promotion or not. Ministerial Ordinance No. 422 of 18 July 2013 sets forth the cases in which a contest loses its exclusive artistic, cultural, sportive or recreational aspect and becomes a prize promotion (subject to the applicable rules and previous authorisation).

The year in review

The covid-19 pandemic prevented much of the gaming regulation initiatives to progress. After some disappointment with the failed Lotex public tender, 2021 brought some relevant advances in regulation of fixed-odds sports betting activities. The highlights were the amendments to the sports betting law through Law 14,183/2021, which modified the taxation basis to social transfers to GGR instead of turnover, rendering operations more feasible, profitable and welcoming to the private sector.

Meanwhile, in the legislature, two bills regarding gaming are under discussion: Bill 442/1991, from the Chamber of Deputies, and Bill 186/2014, from the Senate. This is the brief history of both bills is as follows.

During the conversion of the Provisional Measure No. 671/2015 into Law 13,155, of 4 August 2015, fixed-odds sports betting was approved by the Congress and vetoed by the former President Dilma Rousseff under the justification that 'the creation of the fixed-odds lottery demands a broader regulation to assure better economic and legal security and adequate levels of fraud and money evasion control. Besides, the law did not contain any responsible gaming measures.'

After vetoing the Article that was meant to create fixed-odds sports betting, back on 14 September 2015, the former President held a meeting with congressional leaders to assess the feasibility of getting the gaming offering approved by both houses. Subsequently, the President of the Senate introduced Bill of Law 186/14 from the Senate in the Special Commission for National Development (Commission of the Senate). A few days later, another special commission (Commission of the Deputies) was created in the Chamber of Deputies to draft the Brazilian Gaming Regulatory Framework, based on another project, the Bill of Law 442/1991.

In August 2016, Bill of Law 186/2014 was returned to the Senate and its draft was replaced by a new version, presented by Senator Fernando Bezerra, its new rapporteur.

Senator Fernando Bezerra presented several versions of the draft, the latest on 4 November 2016. On 9 November, the Commission of the Senate finally approved Bill of Law 186/14, and on 14 December a request from Senator Magno Malta was approved.

On 13 December 2016, several experts were invited to speak at the General Commission of the Chamber of Deputies about gaming regulation.

Bill of Law 186/2014 was rejected by the Justice and Constitution Commission on 7 March 2018 by a vast majority of 13 against it and only two senators in favour (the rapporteur and Senator Ivo Cassol) and archived due to the end of the last legislative term. Despite such a defeat, the Bill is currently ready to be presented at the plenary for vote, because Senator Ciro Nogueira requested and obtained its retrieval from the archive.

Concomitantly, at the Chamber of Deputies, a Special Commission to work on the construction of a legal framework was created in 2015 and hosted a number of public hearings and meetings with stakeholders. After years of inactiveness, at the end of 2021, another Special Commission was recreated with the goal for updating the previous text and working on a fast track of approval. Since December 2021, Bill 442/1991 became a priority for the working group while more than 10 different versions were released over a period of a couple of months, from November 2021 to February 2022.

In order to enable a faster procedure and approval, an urgent requirement to vote the final version of the Bill 442/1991 was presented and voted on December 16, as the President of the Chamber of Deputies, Arthur Lira, negotiated a deal with the evangelicals, one of the strongest opposition groups to the bill's approval. As the religious group was eager to obtain a municipal tax exemption for the temples, it is believed that a trade-off has emerged between those groups, and the urgency requirement was approved by a vast majority.

This approval meant that the draft bill would not need to be submitted to further discussions at the Chambers and could be sent to the plenary (floor) of the house directly - the fastest approval procedure.

In February 2022, when parliament works restarted at the beginning of the legislative session, Bill 442/1991 was presented and approved on 23 February 2022. Under this new potential legal framework, lawful gambling modalities are not considered a public service like lotteries (sports betting included) but rather a typical economic activity and include casino, bingo, videobingo, 'jogo do bicho', horse race betting and online gaming. Other betting modalities such as pari-mutuel or direct bets (P2P) remain out of the scope of the bill and thus undefined.

At the time of writing, the Bill was sent to the Senate, where it will be analysed and voted. If approval is reached, it will need approval by the house of origin if amended before being subject to the President's sanction. If the bill is vetoed, it can still return to the chambers to be overturned.

 Bill of Law 442/1991Bill of Law 186/2014
OriginChamber of DeputiesSenate
StatusApproved by the Chamber of DeputiesDraft proposed by the rapporteur, Senator Benedito de Lira was rejected by the Justice and Constitution Commission
Next stepsVoting in the SenateVoting in the Plenary of the Senate to be scheduled
  • Bingo
  • Casinos
  • Horse race betting*
  • Jogo do bicho
  • Online gaming
  • Videobingo
* Despite the fact of horse racing entities being already regulated by specific provisions, their inclusion in the draft is more related to other modalities now able to be run inside their locations (like bingo and casino) than to modify any aspect of the already legislation (Law 7,291/84 and Decree 96,993/98), requirements and regulatory activities developed by the specific regulator of Ministry of Agriculture, Livestock and Food Supply (MAPA).
  • Bingo
  • Casino resorts
  • Jogo do bicho
  • Online casino games
  • Sports betting and other non-sports related types of betting, both land-based and online
  • Video-Bingo (Class II machines) and video-jogo (VLTs), both land-based and online
  • Bingo: authorisation for 25 years, renewable for an equal term
  • Casinos: public bid for concession – 30-year term, renewable for an equal term
  • Jogo do bicho: 10 million reais minimum paid-up capital. Authorisation for 25 years, renewable for an equal period
  • Online gaming: not defined
  • All gaming modalities must be approved by the federal government
  • Bingo is licensed by the states and the federal district
  • Casinos, sports betting and online games are licensed by the federal government
  • Jogo do bicho and VLTs are licensed by the municipalities
  • The procedures and criteria for licensing are to be determined by future regulation

While the federal executive and legislative branches are slowly progressing in the legalisation and regulation of gambling activities in Brazil, the judicial branch and state executive branches had a noteworthy year. Several awards were issued and are expected to be paramount to address future gambling-related cases.

On 17 June 2020, a São Paulo circuit judge ruled in September 2020 that ISS cannot be levied on the whole amount of the buy-ins of poker tournaments, but only on the fees earned by the organiser (i.e., total buy-ins minus prizes).16 The municipality of São Paulo has appealed, and the decision was upheld by the São Paulo Court of Appeals in 2021, meaning that more careful consideration and consistent understanding to GGR is being given by the legal system as a regular and reasonable basis for taxation.

Also, while final regulations on the federal level are still forthcoming, states are proceeding on the grounds that they are permitted to offer any lottery games that have been legalised by the federal government, including online lottery games and sports betting.


2022 is expected to be a busy year for gaming in Brazil.

The regulation of fixed-odds sports betting is likely to occur during the first semester of 2022, according to a recent statement of SECAP. Rumours related to the regulatory framework are that an accreditation model is about to be adopted, without a previously defined and determined number of licences and with general features of a regulatory sandbox, a trend already inaugurated by the Brazilian financial system in specific industries (banking, securities and insurance, for instance) that could be of great use to the emerging gambling industry in the country.

On the states level, the market is moving quickly. Most of the 26 states and the federal district are trying to create or reactivate their lottery operations, albeit with non-existent formal guidance from SECAP on the operation of state lotteries. Several opportunities for operators in the states will arise during the year, starting from the public tender already in place in the biggest market of Brazil, São Paulo.

Finally, the Supreme Court is scheduled to judge extraordinary appeal No. 966,177, which is to decide whether the gambling ban set forth by Article 50 of the Misdemeanour Law is constitutional or not. While initially the Court set the judgment session for 7 April 2022, the analysis was later postponed sine die. Depending on the ruling of the court, all gaming activities, from bingo to casinos, both land-based and online, may become legal and unregulated in the whole country.


1 Luiz Felipe Maia is a founding partner and Flavio Augusto Picchi is a partner at Maia Yoshiyasu Advogados.

2 Brazilian Institute of Geography and Statistics, 'Projection of the population of Brazil and Federative Units', available at <> . Accessed on 17 March 2022.

3 International Monetary Fund, 'World Economic Outlook Database, October 2020', available at <> . Accessed on 17 March 2022.

4 Luiz da Cunha Gonçalves, Tratado de Direito Civil, Volume 8, Tomo I, São Paulo, Max Limonad (1956) p. 380.

5 Clóvis Beviláqua, Direito das Obrigações, third edition (1931).

6 Pablo Stolze Gagliano and Rodolfo Pamplona Filho, Novo Curso de Direito Civil, Volume 4, São Paulo, Saraiva (2012), pp. 597–598.

7 Humberto José da Nova, 'Comentários à Lei das Contravenções Penais. Das contravenções relativas à polícia de costumes', Anais do 1º Congresso Nacional do Ministério Público, Volume 6. Rio de Janeiro, Imprensa Nacional, (1943), p. 149.

8 Ação de Descumprimento de Preceito Fundamental (ADPF) 492/RJ and 493/DF, Ação Direta de Inconstitucionalidade 4.986/MT, Brazilian Supreme Court. Rapporteur, Justice Gilmar Mendes. Judgement dated 30 September 2020. Available at <>. Accessed on 17 March 2022.

9 Reclamação 9.134/RJ, Brazilian Supreme Court. Rapporteur, Justice Ellen Gracie. Judgment dated 15 February 2009. Available at <>. Accessed on 17 March 2022.

10 Recurso Extraordinário 966.177/RS, Brazilian Supreme Court. Rapporteur, Justice Luiz Fux. Available at <>. Accessed on 17 March 2022.

11 Article 52 of the Misdemeanour Law.

12 Solução de Divergência COSIT No. 9, of 16 July 2012.

13 For reference, according to Article 7 of Law 9,779 of 19 January 1999, non-resident taxpayers are taxed on Brazilian-earned income at a flat rate of 25 per cent (no deductions are allowed).

14 CENP, Standard Norms for Advertising Activities, São Paulo, 16 December 1998. Available at <>. Accessed on 17 March 2022.

15 Article 21 of the Brazilian Code of Advertising Self-Regulation.

16 Case 1038886-96.2017.8.26.0053, 16th Public Treasury Circuit Judge of São Paulo. Available at <>. Accessed on 17 March 2022.

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