Brazil egaming loophole to close on 22 June

The Bill to close a loophole allowing international egaming firms to target Brazil-based customers has been passed into law, but doubts remain over whether or not it will be applied by Brazilian state judges.

The Civil Landmark Bill of Law, known locally as ‘The Internet Constitution’, was passed by Brazilian president Dilma Rousseff on April 23.

In effect it will close the loophole that has until now deemed any contract online to be bound by the laws of the jurisdiction where it has been actioned which, in the case of online gambling, is the location of bet taker’s licence.

The Bill is currently under ‘vacatio legis’ – the period of time between the passing of the law and it coming into force – which in Brazil lasts 60 days, meaning that it would come into force on 22 June.

From that date Brazilian judges would have the power to issue an injunction on gaming sites deemed to be breaking the law, however the growing consensus within Brazil is that such action is unlikely to happen.

“I don’t believe we will hear from sanctions to online gambling companies until the local market is regulated and other operators become interested in lobbying and taking action against the online competition,” Luiz Felipe Maia, attorney at Oliveira Ramos, Maia and Advogados, said.

And one eGR source said that operators “should not be too concerned” about the passing of the bill, but warned of the possible long-term impact it may have on marketing in the country

Currently the only legal online gambling products in Brazil are central government and state lotteries and selected horseracing and poker events, however sports betting and casino products are strictly prohibited.

Previous efforts to open the market have been dogged by political scandals and the inability of domestic operators to agree on regulations, however two “strong” bills of law are currently being discussed by Brazil’s congress.

“Hopefully at least one of them is approved,” Maia added.