The Legal Landscape Behind Brazilian Online Casinos

There are not many spots on the globe where sport is venerated so centrally as it is in Brazil. Football, of course, is the national obsession—less a pastime than a faith, with saints (Pelé, Zico, Romário) and with tragedies (the 1950 Maracanazo lives in the nation's memory). But alongside this glorious game another activity has developed unobtrusively: betting. It has been around in some form or other for decades—sometimes accepted, often frowned upon, sometimes even ignored altogether. And where this is best seen is in the world of internet gambling.

Brazilian gambling law has been something of a mystery for decades, fluctuating wildly from time to time between prohibition and control, leaving operators and gamblers in a state of perpetual ambiguity. Unlike football, whose regulations are at least clear (even if VAR does its level best to confuse the issue), gambling has long been in a grey area—technically forbidden but de facto tolerated, particularly online. And now, after all the decades of debate, legalisation is finally starting to take shape, but in the characteristically Brazilian manner: gradual, layered, and occasionally muddled.

The overnight popularity of online casinos in Brazil is not an accident. It is a result of years of legislative swing, a gradual change of heart, and—most importantly—a realization on the part of the government that a market that wasn't regulated was one thing, but a market that wasn't regulated and wasn't bringing in any tax revenues either was something else entirely. And as with so many pieces of legislation, it is more a question of money than morals.

From Shadows to Spotlight

Throughout much of the 20th century, Brazil was resolutely anti-gambling. In 1946, President Eurico Gaspar Dutra banned all forms of betting other than state lotteries and horse racing, ushering in an era of prohibition that would last for decades. The government's official reason was one of morality, but the actual one was economic: gambling was considered corrupting, as an industry likely to be taken over, and as one that could not possibly benefit the public coffers.

Naturally, the prohibition had little effect on enthusiasm. Jogo do bicho—a clandestine 19th-century numbers game—thrived in secret, as did underground gambling dens. And with the arrival of the internet, offshore online bookmaking offered a means for Brazilians to bet with nothing more than an internet connection and a dash of hope.

But while the government was happy to turn a blind eye for a while, the magnitude of the industry eventually became impossible to ignore. Football club sponsorship provided a tangible gauge of just how deeply established betting online was—Brasileirão football clubs in Brazil's top division were awash with logos of international bookmakers, many of which did not remit a single real in local tax.

A New Legal Framework

The breakthrough came in 2018 with the signing of Law 13,756, paving the way for legal sports betting. It was a hesitant step—sportsbooks were legalized, but online casinos remained in limbo. It was as though the government had left the door ajar, inviting some forms of gambling into the light and not others to dwell in darkness.

Flash forward to 2023, and the scene had shifted once more. Years of procrastination finally ended when the government sanctioned a more comprehensive gambling regulation scheme, with provisions for licensing, taxation, and consumer protection. The logic was straightforward: if people were going to gamble anyway, they might as well do it in a manner that benefited the economy instead of just lining the pockets of offshore operators.

The proposed tax rates, between 12% and 18%, raised eyebrows, but the consensus was that a small amount of taxation was better than no taxation. Operators would have to go in search of licences, adhere to stringent compliance regimes, and contribute to safer gambling initiatives. And while concerns were expressed about addiction and exploitation threats, the move was largely seen as a step in the right direction.

The Role of Football

If gambling in Brazil has a face, it is the face of a footballer. In the last decade or so, sponsorship deals between bookmakers and football clubs have become the standard, with the vast majority of top-flight clubs having bookmaker deals. The sight of a Brazilian superstar scoring a late goal, wheeling away in celebration with a betting logo emblazoned across his chest, has become an inescapable part of the sport's modern identity.

This close association with betting has not been without controversy. Opponents argue that it normalises betting, particularly among young fans, and is a moral concern in terms of potential match-fixing or conflicts of interest. Others point to the financial lifeline that this sponsorship provides, particularly for smaller clubs fighting to stay afloat.

And it is not just the clubs that have benefited. Brazilian footballers themselves have been used as brand ambassadors for online casinos, their Twitter timelines full of promotional tweets encouraging fans to have a try. The influence of sport on attitudes towards gambling cannot be overstated, and as regulation increases, the connection between the two sectors is only going to become stronger.

The Road Ahead

Despite the progress, the path forward is not plain sailing. There are legal obstacles yet to be overcome, and there are issues around enforcement—will international operators embrace Brazil's new regulations, or will they continue as usual, in the dark, as they have done for so long? Will the government's tax model prove viable, or will it drive players onto unlicensed sites with improved odds?

There is, of course, the public opinion factor. Attitudes towards gambling have relaxed somewhat, but scepticism remains—particularly among the older age groups who still associate it with vice and corruption. Firm responsible gambling measures will be required, and public education campaigns will be necessary to ensure that the industry develops in a profitable but sustainable way.