Supreme Court to decide on constitutionality of online gambling in Brazil

The court will rule on a legal challenge against regulated online gambling in Brazil.

Brazil.- The Supreme Court is to rule on a legal challenge that questions the constitutionality of the framework introduced for regulated online gambling in Brazil. The regulated market is due to launch on January 1 2025, and the new gambling regulator, the SPA, is currently processing licence applications, but the trade union CNC has challenged the move.

In a two-day hearing, regulators and stakeholders in the betting sector defended the new gambling legislation. Regis Dudena, head of the SPA, stressed that the regulated market was expected to contribute significant revenue to the state and that blocking the process could lead to more illegal gambling.

Dudena said: “The demand for gambling is real and any eventual declaration of unconstitutionality will only direct Brazilians to an illegal, unsafe market with harmful effects, such as fraud, money laundering and the exploitation of bettors [which] tend to worsen increasing mental and financial health problems, such as financial debt.”

Dudena also reiterated concerns that the delay in regulating online gambling in Brazil increased negative impacts due to the extended period of grey market activity. 

“The diagnosis is that a lack of regulation since the initial legalisation has caused growth in the activity and a lack of control,” he said. “Regulation is the best means of state presence in the sector. This presence will only be complete, effective and efficient if the constitutionality of Law No 14,790 is recognised by this Supreme Court.”

Hazenclever Lopes Cançado, president of the Rio de Janeiro state lottery, Loterj, also defended the legalisation of online gambling. He said: “Federal Law No 14,790/2023 is a legitimate political option.  Every day, it proves to be more relevant and indispensable for the fulfilment of the Republic’s fundamental objectives, such as national development, the eradication of poverty and the construction of a fair and supportive society.”

Loterj is involved in a separate legal challenge of its own in a tussle with the federal government over the validity of state-issued gambling licences. It’s lodged a federal lawsuit that seeks to annul the list of approved gambling operators drawn up by the SPA. 

Meanwhile, the Paraná state lottery, Lottopar, highlighted the rules for gambling advertising provided in the new legal framework. Technical director Rafael Halila Neves said: “Law No 14,790 is essential to guarantee a safe and responsible betting environment by imposing consumer protection standards and promoting transparency and necessary preventive actions.

“Another important part of the law is the restrictions on advertising, curbing irresponsible practices, especially by influencers who present betting as a source of income.”

The SPA set an October 1 deadline for licence applications from operators that wished to continue operating once online gambling becomes regulated. Under Ordinance 1,475, only those companies that submitted licence applications can continue operating between October 1 and December 31. More than 100 operators have applied for licences.