Why is gambling prohibited in Brazil? – 05/12/2023 – Sport
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The recent discovery of a manipulation scheme in sports betting on websites has put the reputation of the sector in Brazil in check.
The scheme, now being investigated by the Goiás Public Prosecutor’s Office under the name of Maximum Penalty Operation, paid soccer players to change the course of matches on the field — getting yellow cards, being expelled or committing penalties, for example.
Although those involved in the manipulation of the results may respond criminally, the act of betting on these sites, which have become increasingly popular, as well as making the bets available, is not considered a crime in Brazil.
What is the difference between gambling and sports betting on websites?
Recent changes in Brazilian legislation differentiate gambling from betting on sports games made online — but, in the assessment of experts heard by BBC News Brasil, there are still loopholes that require specific rules.
“Originally, Brazilian legislation treated everyone equally. Article 50 of the Criminal Misdemeanors Law states that placing bets is a criminal misdemeanor, punishable by simple imprisonment from 15 days to 3 months, or a fine,” says Fabiano Jantalia, a specialist in gaming and banking law.
The law considers games of chance to be of three types: games in which the gain or loss depends on luck; betting on horse racing or betting on any other sporting competition.
“With the creation of Law 13,756, in 2018, a new type of lottery was created, which led to a change in the classification of fixed-odds bets in Brazil, which are, in fact, sports betting, which came to be classified as a lottery. , which in Brazil is considered a public service. From then on, a bifurcation was created”, points out Jantalia.
“The problem is that this same law foresaw the possibility of its exploitation, but conditioned it to a future regulation. And this regulation, until today, has not occurred. Although they were allowed, the bets still cannot be exploited in Brazil due to the lack of specific regulation.”
Lack of specific regulation
Due to the lack of specific regulation, companies in the sector have found ways to avoid sanctions on Brazilian soil.
“Most betting sites are based abroad, making them foreign to Brazilian legislation, making it difficult to tax, inspect and even guarantee the rights of users”, says Marcelo Mattoso Ferreira, a lawyer specializing in the eSports and games market, and partner at Barcellos Tucunduva Advogados.
Prosecutor Felipe Almeida Marques, coordinator of the Cyber Crimes Nucleus at the Public Ministry of Mato Grosso, explains that for companies of other types of bets, hosting companies in other countries is a commonly adopted maneuver.
“In addition to avoiding inspection and punishment, the lower taxation in tax havens made these locations more attractive for the installation of casinos and the like.”
“In fact, this is a worldwide movement that Brazilian legislation is not following, and it is not possible to prohibit access and hosting of these sites locally. Thus, only regulation, taxation and inspection remain as a way of reducing possible impacts negatives.”
the current situation
What the Brazilian government is now evaluating is the issue of a Provisional Measure that can fill the existing gap today, which is the lack of regulation by the Ministry of Finance.
“It seems that the government is studying raising the matter to the level of a provisional measure, because it understands that improvements are needed in relation to the sanction, and to a series of administrative procedures, ranging from obtaining licenses and authorizations, even punishments and the possibility of a term of commitment and other administrative actions”, says Jantalia.
The specialist in gaming law describes points that he considers are still missing from the legislation.
Taxation
“It is necessary to know how the taxation of prizes given to winning bettors will be, as well as what will be the taxation rules of bookmakers that seek authorization to operate in Brazil”, says Jantalia.
Authorization
Another point, explains the lawyer, is the need to define how much the company will need to pay to have the license that allows access to this market and what types of documents it must present.
Responsible gaming rules
The set of rules that will guide the actions of these agents must also be established by the Public Ministry. “There is a need for anti-money laundering rules that will need to observe industry-specific discipline, and even self-exclusion procedures that aim to allow the gambler to voluntarily ban himself from gambling because he considers himself addicted.”
Oversight
What will be the administrative structure that will be created to supervise this sector also remains in doubt.
“In the whole world, the gaming sector is one of the most regulated, even if compared, for example, to the financial sector, because it has a series of peculiarities that need to be observed. So, the great expectation is how this apparatus of inspection — whether it will be a Secretariat, agency, national authority…”, concludes Jantalia.
“It is obvious that there will always be attempts and schemes to corrupt the integrity of the players in that market, but the least that can be done is to implement mechanisms to reduce this risk and that, as a rule, only comes with efficient regulation”, adds Ferreira.
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