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A Brazil Supreme Court justice has ordered immediate restrictions on irresponsible advertising and to prevent use of welfare funds for online gambling, but declined to impose a full injunction on the federal law that establishes a national licensing regime.
Justice Luiz Fux published a seven-page emergency order in the early hours of Wednesday morning (November 13), following the conclusion of a two-day public hearing on the circumstances surrounding two constitutional challenges to Brazil’s 2023 law to regulate sports betting and online gaming.
Fux specifically ordered that incoming restrictions to prevent advertising targeted at children or adolescents be brought into effect immediately, rather than on January 1 alongside the various other requirements that will govern newly licensed operators in Brazil’s regulated market.
The judge also demanded that Brazil’s Ministry of Finance take “immediate measures” to prevent funds from various Brazilian welfare programmes from being used for online betting.
Fux said the Supreme Court’s hearing had provided evidence of the “deleterious impacts” of online gambling and betting advertising on family budgets and on the mental health of Brazilian youth, indicating that the legislation was failing to provide adequate constitutional protections in those two specific areas.
Still, the targeted nature of Fux’s order is at least a partial victory for Brazil’s betting industry, as plaintiffs in the two legal challenges had called for an immediate suspension of Law 14.790 in its entirety pending consideration of their cases.
Had such an injunction been granted, Brazil’s pending licensing process would have been put on ice for a minimum of several months, if not indefinitely.
In statements issued following Fux’s order, Brazilian betting industry associations ANJL and IBJR both said they fully supported the two additional restrictions now being imposed by the presiding judge for the two constitutional challenges.
In practice, most Brazil-facing operators are already obliged to avoid advertising to minors based on self-regulatory guidelines that were adopted earlier this year by Brazilian advertising body CONAR.
Fux’s order merely brings forward the effective date of accompanying, formal regulations that were adopted by Brazil’s gambling authority in late July by a matter of a few weeks.
Implementation of a ban on the use of Bolsa Familia and other federal welfare funds for online gambling will require more specific guidance and technical coordination, but it had already been floated as a possible new restriction by the administration of President Lula da Silva several weeks ago.
Ironically, one concern of the administration was whether such a ban might be considered unconstitutional on the basis that it would limit how Brazilian welfare recipients could spend their entitlements.
IBJR, whose members include Flutter, Entain, bet365, Betano and other leading international operators, said a prohibition on welfare funds for gambling was “in line with the position of IBJR to protect more vulnerable groups”.
“The members of IBJR will continue to support the measures of the Ministry of Finance to implement this restriction,” said Andre Gelfi, IBJR’s president and managing partner of Betsson in Brazil.
“We share the view that gambling needs to be responsible, respecting the financial limitations of each person.”
Fux raised some alarm on Monday when he told reporters that Brazil’s online gambling legislation required “immediate adjustments” and said he would confer with fellow Supreme Court justices to decide whether to impose an injunction on the law.
However, he struck a more measured tone 24 hours later when he stated that his decision would involve balancing concerns of mental health with the fact that specific regulations developed by the Ministry of Finance have not yet been brought into effect.
It should be noted that Fux’s emergency order relates specifically to the two cases brought by the CNC and Solidarity, and not a third constitutional challenge that was filed late on Monday by Brazil’s attorney general, the Prosecutor General of the Republic (PGR).
A further emergency order related to arguments presented in the PRG’s overlapping challenge is at least theoretically possible, while all three cases will also be considered on their merits and ruled upon by the full Supreme Court at some point in the first half of 2025.
As previously highlighted by Vixio GamblingCompliance, the constitutional challenges are not the only cases related to Brazil’s online betting regime that are pending before the country’s top court.
Last month, Fux issued an injunction to suspend two specific provisions of December 2023’s legislation that prohibit companies from obtaining a state-level licence for betting or lottery games in more than one Brazilian state, or from advertising their services outside of that state’s borders. That case was brought by a coalition of seven Brazilian state governments, led by Sao Paulo.
Also in October, a further case was filed before the Supreme Court by Brazil’s solicitor general to prevent operators licensed by the state lottery of Rio de Janeiro from accepting bets from across Brazil.
