Betnacional owner avoids suspension amid $88.3 million court battle over underage betting
NSX Group, owner of the Betnacional brand, will be allowed to continue operating in Brazil after a judge denied a request for suspension of its activities, ruling the company had not breached underage betting regulations.
The interlocutory decision comes after a lawsuit was filed against Betnacional and its owner by the Education and Citizenship of Afrodescendants and the Needy (Educafro) and the Father Ezequiel Ramin Centre for the Defence of Human Rights.
The lawsuit called for the suspension of activities from NSX Group and its Betnacional, Mr Jack Bet and Pagbet brands, as well as collective moral damages of BRL500 million ($88.3 million).
The action alleged the group, which was acquired by Flutter last week, had failed to sufficiently protect children and adolescents from betting.
The Public Prosecutor’s Office initially granted the injunction to suspend the sites’ operations, until proof was given of the effective adoption of technological mechanisms to ensure children can’t access the platforms.
However, the Court of Justice of the Federal District and Territories has decided not to grant the preliminary injunction to suspend NSX Group’s activities, ruling the company had only received authorisation to operate in the newly regulated online Brazil market after satisfying the licence requirements, such as the utilisation of facial recognition technology.
“Considering that it was proven in the records that the defendant obtained the authorisation to operate for a period of five years, it is concluded that the security mechanism indicated by the plaintiffs themselves and required by the Ministry of Finance was duly implemented,” the decision read.
“Therefore, I understand that there is no just cause for granting the preliminary injunction filed.”
Lack of concrete evidence against Betnacional
Udo Seckelmann, Head of Gambling & Crypto at Brazilian law firm Bichara e Motta Advogados, explains the judge decided not to suspend NSX Group’s operations after the case failed to meet the required level of proof, especially with Betnacional licensed and regulated by the Secretariat of Prizes and Bets (SPA).
“The judge ruled that there was no concrete evidence that Betnacional had actively targeted minors or breached current regulations regarding child and adolescent protection,” Seckelmann tells iGB.
“The decision emphasised that punitive measures such as suspending operations require clear and demonstrable violations, which were not substantiated in this case.”
Seckelmann believes the ruling against suspension of Betnacional will prove “highly significant” for the Brazilian gambling industry, highlighting the importance of licensing for operators, as well as maintaining compliance.
“It suggests that courts are likely to uphold the legality of operations for companies that are properly licensed and adhere to the current rules, particularly those concerning the protection of minors,” Seckelmann continues.
“At the same time, it sends a strong message that the judiciary is attentive to the need for evidence-based claims when it comes to allegations of non-compliance, reinforcing a balanced approach between regulation and market stability.”
NSX Group not entirely out of the woods
As this is just an interlocutory decision, the case will remain ongoing, with the ruling calling for the plaintiffs to provide further information, including factual evidence of the ineffectiveness of NSX Group’s biometric technology.
If additional information is provided, the record will once again be forwarded to the Public Prosecutor’s Office.
Seckelmann says new, stronger evidence could yet turn the tide in the plaintiffs’ favour.
“Additionally, changes in the regulatory environment – such as stricter enforcement guidelines or legislative updates – could influence future judicial interpretations.”
“For now, however, the company remains authorised to operate, pending further developments in the judicial process.”
NSX Group acquired by Flutter
Last week, it was announced NSX Group CEO João Studart would lead Flutter Brazil after the international giant closed its acquisition of the Betnacional parent company.
The deal, valued at $356 million, will comprise NSX’s brands, as well as Flutter’s existing Betfair Brazil business.
On LinkedIn, Studart shared his excitement over the future of the new Flutter Brazil business, saying: “Today, we begin a new stage in our journey.
“It is the recognition of a work that began as a Brazilian startup and that, with strategic vision, talent and consistency, has consolidated itself as a reference in the betting and digital entertainment sector, with leading brands such as Betnacional.”