Last Friday, the Ministry of Finance published Normative Ordinance No. 1,330 (“Ordinance MF No. 1,330”), which sets out general conditions for the commercial operation of fixed odds betting in Brazil. Ordinance MF No. 1,330 also sets out rules on responsible gaming, anti-money laundering, and bettor’s rights and duties.
Prior Statement of Interest
Ordinance MF No. 1,330 provides for a procedure called “Prior Statement of Interest,” in which companies interested in obtaining authorization for the commercial operation of fixed odds betting must express their interest to the Ministry of Finance within thirty days from the publication of the Ordinance.
The expression of interest must be sent by email to the General Coordination of Lotteries of the Ministry of Finance, accompanied by a prior statement of interest statement signed by the company’s legal representative, a form (in accordance with the model attached to the Ordinance), and corporate documents. In the case of foreign companies, a commitment to establish a business entity in Brazil will be required.
One point not clarified in Ordinance MF No. 1,330 concerns the possibility for interested companies to opt for the operation of fixed odds betting in the form of online gaming, as provided in Annex II – Form.
This provision conflicts with the legal definition of fixed odds betting, a lottery category that involves betting on real sporting events, as provided in Article 29, Paragraph 1, of Law No. 13,756 of December 12, 2018. In the absence of a specific legal provision, it remains to be seen how the Ministry of Finance will address statements of interest regarding online gaming.
Companies that submit a prior statement of interest within the time frame set by the regulation will be given priority in the analysis of future authorization requests when the period for submission of requests is officially opened.
The prior statement of interest procedure appears to be a market survey conducted by the Ministry of Finance, and its results may be used in the formulation of sectoral policies and the definition of awarding criteria.
The operation of fixed odds betting will be carried out through a competitive regime, with no limit on authorizations. National or foreign legal entities duly established in the national territory may request authorizations. Ordinance MF No. 1,330 specifies that foreign companies interested in operating in the national territory may only engage in fixed odds betting lotteries by establishing a subsidiary in the country.
Additionally, the regulation outlines minimum requirements to be observed by future operators, such as the provision of a sports betting platform that meets technical and operational requirements to be defined in regulations, customer support for bettors in Brazil, and the implementation of policies to prevent match-fixing and money laundering.
Bettor’s Rights and Duties
Furthermore, Ordinance MF No. 1,330 outlines some basic rights of bettors, including receiving appropriate, secure, and quality services while preserving freedom of choice, as well as access to information of interest.
In this regard, companies must provide clear and precise information about betting platforms, criteria for winning bets, and the manner and location of prize collection.
Anti-Money Laundering (KYC)
To ensure the safety of bettors, authorization for the commercial operation of betting is contingent on the establishment of an “anti-money laundering and counter-terrorism financing policy,” the development of criteria, and the implementation of customer identification procedures, as well as the identification, monitoring, risk analysis, and reporting of operations with indications of money laundering. Additionally, operators must establish and execute a continuous training program aimed at promoting a culture of responsible gaming and the qualification of employees, partners, and third-party service providers.
Ordinance MF No. 1,330 introduces rules aimed at preventing compulsive or pathological gambling, with a focus on preventing and not inducing indebtedness and protecting vulnerable individuals, especially minors and the elderly. In this context, operators must prominently display notices, both in physical and virtual channels, stating that bets will only be sold to individuals over the age of eighteen.
The regulation also requires operators to implement mechanisms that allow bettors to set daily time and loss limits, loss periods, and self-exclusion.
Advertising and marketing of fixed odds betting lotteries in schools and universities is prohibited if the advertisements suggest that betting is socially attractive or a solution to financial problems, among other restrictions aimed at promoting responsible gaming. Moreover, all advertising actions must include a warning clause with the message “Gamble Responsibly.”
Ordinance MF No. 1,330 represents an important first step in regulating the commercial operation of fixed odds betting in Brazil. The market will certainly closely monitor the effects of this regulation, as well as future regulations to be issued soon.
For more details on this subject, please contact the Public Law team.