Brazil Enforces Ban on Gambling Bonuses and Stricter Ad Rules
Brazil has taken a decisive step in reshaping its gambling industry by prohibiting the use of promotional bonuses and restricting targeted advertisements. Under Order No. 2,344/2024, issued by the Ministry of Justice and Public Security, the government aims to protect vulnerable populations while addressing broader societal risks associated with gambling.
Comprehensive Ban on Bonuses
The new directive eliminates promotional strategies that include bonuses, welcome credits, or any other form of upfront incentives linked to gambling. Operators are now prohibited from offering these incentives to attract players, as such tactics are considered to encourage unhealthy gambling behaviors.
Additionally, advertising of fixed-odds betting games targeting children and adolescents is explicitly banned. These measures ensure that younger demographics are shielded from potential exposure to gambling influences.
To enforce compliance, operators are required to submit a detailed report within 10 days, outlining how they will align with the new rules. Those who fail to comply face steep daily penalties of R$50,000 (approximately €8,000) until violations are resolved.
Focus on Vulnerable Consumers
The ban emphasizes consumer safety, particularly for "hyper-vulnerable" groups, including minors. By restricting gambling ads and promotions, Brazil seeks to reduce instances of problem gambling, over-indebtedness, and exploitation within the market.
Officials highlighted the importance of this regulation in preventing the misuse of financial resources. Recent studies have shown concerning trends, such as welfare funds being diverted for gambling purposes. These restrictions aim to curb such practices and create a safer environment for all participants.
Regulatory Evolution in Brazil
This latest move comes as Brazil prepares for the official launch of its regulated online betting market on January 1, 2025. The country has been steadily tightening its gambling regulations, including the earlier Ordinance No. 615, which prohibited welcome bonuses and similar incentives.
The Secretariat of Prizes and Bets (SPA), responsible for overseeing gambling operations during this transition period, has outlined further requirements for licensed operators. These include platform certification, payment of an upfront concession fee of R$30 million (€5 million), and compliance with enhanced advertising standards.
Industry Response and Challenges
For operators, the new rules mark a significant shift in how gambling services can be marketed. Campaigns reliant on bonus incentives will require a complete overhaul, and advertising strategies must prioritize compliance to avoid penalties.
This crackdown also reflects the government’s broader commitment to balancing the economic benefits of a burgeoning betting market with the need to protect consumers. Advocates for these changes see them as a critical step in addressing gambling addiction and ensuring a responsible gaming environment.
As these regulations take effect, Brazil's gambling industry stands at a pivotal juncture, with operators and stakeholders navigating the new landscape shaped by stringent consumer protections and regulatory oversight.
Source: "Brazil Cracks Down on Gambling Incentives with Nationwide Ban", lcb.org, November 21, 2024.