Brazil Cracks Down on Gambling Incentives with Nationwide Ban

In a decisive move to regulate its emerging gambling market, Brazil's National Consumer Secretariat (SENACON) has implemented stringent restrictions on promotional activities tied to betting. Under Order No. 2,344/2024, all forms of gambling incentives—including bonuses, sign-up offers, and promotional payments—are now prohibited nationwide. This initiative also bans advertising targeted at vulnerable groups such as children and adolescents, aiming to create a safer gambling environment.

New Regulations to Protect Consumers

This recent directive from SENACON explicitly forbids operators from offering any upfront payments, rewards, or promotional incentives that could encourage gambling activity. It also restricts advertisements for fixed-odds betting games targeting minors.

This law shows Brazil's commitment to shielding vulnerable populations, with SENACON emphasizing the need to protect "hyper-vulnerable" groups like children.

To ensure compliance, gambling operators must submit a comprehensive report detailing their adherence to these rules within 10 days of the order's issuance. Non-compliance could result in steep daily fines of R$50,000 (approximately €8,000), significantly raising the stakes for operators in Brazil’s regulated gambling market.

Building on Previous Restrictions

This latest development follows Ordinance No. 615, issued earlier by the Secretariat of Prizes and Betting (SPA) and the Ministry of Finance. The ordinance explicitly prohibits gambling operators from offering "advancements, bonuses, or prior advantages" for promotional purposes. Together, these regulations aim to curb gambling addiction and prevent over-indebtedness among consumers, with a specific focus on limiting operators' ability to attract new players through common promotional strategies.

The new regulations are applicable to all operators aiming to participate in Brazil’s legal gambling market, which is set to launch on January 1, 2025. Companies authorized to operate during the transition period, which ends on December 31, 2024, must adapt quickly to these changes. The SPA has also confirmed that final licensing procedures are underway, with selected operators required to pay an upfront R$30 million (€5 million) concession fee and undergo platform certification.

Operators failing to comply with SENACON’s order will face severe penalties, including daily fines until violations are rectified. These stringent measures are designed to push operators towards full compliance, reshaping the marketing landscape of Brazil's betting industry.

Targeting Gambling’s Societal Costs

SENACON’s order is not just a regulatory measure but also a broader attempt to address the societal impacts of gambling. Studies by Brazil’s Central Bank revealed troubling statistics, including the misuse of Bolsa Familia welfare funds for gambling. Additional surveys highlighted cases of players using money intended for essentials such as food and medicine to fund their gambling activities.

By banning promotional strategies and advertisements aimed at vulnerable groups, the government aims to mitigate the risks of problem gambling and financial instability among consumers. This move is seen as a necessary step toward safeguarding public welfare and reducing the societal costs associated with gambling.

A Shift in Marketing Strategies

For operators, the ban necessitates a fundamental change in marketing strategies. Campaigns previously reliant on bonus-driven incentives must be overhauled to align with the new regulations. Companies like Stake Brazil Ltda are already taking steps to comply, with plans to establish operations in São Paulo and adapt to the evolving legal landscape.

As Brazil’s gambling industry evolves, these new restrictions could pave the way for more comprehensive regulations. Stricter controls on online platforms and additional advertising limitations may follow, as the government seeks to balance the sector’s economic potential with consumer safety.

SENACON’s decisive action represents a turning point for Brazil’s gambling market, prioritizing consumer protection while signaling a shift toward responsible industry practices.

Source:

''Brazil moves to ban marketing of betting bonuses'', igamingbusiness.com, November 19, 2024.