Brazil bans player incentives and tightens ad rules

The Brazilian iGaming and sports betting market is poised to be one of the world’s largest and youngest, but it’s already exhibiting signs of maturity. The National Consumer Secretariat has issued new rules that will tighten gambling laws in the country ahead of the industry’s official launch on January 1, 2025.

Brazil prioritizes consumer protection ahead of gambling market launch

Ahead of the industry’s launch, gambling operators who have received a license to operate in the country, have been cautioned that they would not be able to use any forms of player incentives, meaning sign-up bonuses.

In this regard, Brazil is already aligning itself with more mature jurisdictions that have passed tougher laws on how bonusing can be used to lure and attract players. Order No. 2344/2024 also prohibits the use of advertising that could target minors and adolescents.

Operators are also required to submit a report that will outline how they intend to stick to the new requirements and measurements outlined by the regulator. Any operator that hopes to operate in Brazil would have to observe these rules to the letter.

If an operator is found in breach of these regulations, they will incur a daily fine of R$50,000, with further enforcement actions possible. Brazil has already cautioned that although happy to regulate and launch gambling in the country, it would not hesitate to pull the plug on the entire industry should operators fail to comply and ensure that consumers are protected.

There have been already instances of players using social welfare payments to gamble. There have been reports that consumers continue to divert money from essential spending to support their gambling habits which is not what the government of President Luiz Inácio Lula da Silva wants to achieve.

At the same time, Brazil can ill afford to scrap the gambling industry altogether, despite public warnings it would do so, as the country’s public debt and spending are climbing. However, both Da Silva and the country’s Finance Minister, Fernando Haddad, have openly criticized the sprawling levels of gambling addiction and indebtedness.

Indebtedness remains a similar problem among Brazilians who gamble

Brazilian gamblers are spending an estimated $3.1bn per year, or more, and this number is likely to increase with the arrival of the regulated gambling industry.

The suspension of gambling bonuses and the restrictions on advertisement clearly indicate that the government is still wrestling with the issue, cognizant of the financial benefit in the short term, but also aware with the possible negative economic impact in the long run should consumers continue to suffer from gambling-related harm.

The regulation of the industry is hoping to bring a positive change altogether, as officials hope that once stakeholders are well-established enough they will be forced to comply with specific consumer protection measures, such as restrictions on how much individual gamblers can bet, additional checks, and better funding to treatment and support services.

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