Brazil betting industry in uproar as Senate pushes through ad restrictions

The Brazil Senate has approved several restrictions on gambling advertising that ban celebrity endorsements, limit sports sponsorships and impose ad watersheds.

On Wednesday, the Brazil Sports Commission greenlighted a proposal that would add a number of new betting ad restrictions in Brazil.

The next step was for the Communication and Digital Law Committee (CCDD) to take the final vote. However, the CCDD is not yet in place, and therefore Bill 2,985/2023 was forwarded to the Senate Plenary as a matter of urgency. The Brazil Senate then voted in favour of the bill.

Senator Carlos Portinho amended the bill, removing the initially intended blanket ban on betting advertising. The changes allow for limited sponsorship by sports teams and stadiums, as well as some media advertisement time slots.

Udo Seckelmann, head of gambling & crypto at Brazilian law firm Bichara e Motta Advogados, told iGB the amendments to the bill were important to mitigate the backlash from the betting sector in Brazil.

“The initial proposal for a complete ban on gambling advertising was not only disproportionate but also disconnected from the regulatory reality established by Law No 14.790/2023,” Seckelmann said.

“A blanket ban would have jeopardised the development of the legal market, driven bettors toward unregulated platforms and significantly harmed stakeholders such as sports entities, media outlets and marketing agencies.”

Brazil betting bill backlash

The Brazilian Institute for Responsible Gaming (IBJR) responded by saying it was deeply concerned about Bill 2,985/2023, warning its “severe restrictions” would open the field for the illegal market.

The IBJR said legal advertisements inform the public and help citizens to identify regulated platforms that are providing a safer gaming environment to their black market alternatives.

“The proposal weakens communication between legalised betting companies and bettors, compromising the sustainability of a regulated sector committed to responsible gaming,” the IBJR said in a statement on social media.

Football clubs in Brazil have also hit out at the advertisement restrictions.

In a joint statement shared with Games Magazine Brazil by a number of top clubs, teams have voiced their opposition to the restrictions, warning of economic peril.

The clubs have called the bill a “prohibition disguised as a limitation”, explaining the Brazil sports sector stands to lose roughly BRL1.6 billion ($281 million) as a result.

“The prohibition of brand exposure from operators on static properties signage in sporting venues, as included in the substitute’s wording, removes crucial revenue streams from clubs. The financial losses will be significant even for major clubs,” the clubs stated.

The teams also added the new rules could be detrimental to the survival of smaller clubs.

Additionally, clubs have warned that teams could face not just financial collapse but a legal fallout. This is due to the ban on static signage at stadiums. The statement noted many teams have already signed lengthy contracts with operators, which would now need to be renegotiated or terminated.

Limiting communication

Seckelmann stated that if the bill was enacted as the version approved by the commission, it would impose further limitations on how betting operators communicate with the public.

This would impact media deals and brand awareness that are essential to create a competitive but regulated market.

“International experience shows that such restrictions often fail to deliver the intended public health outcomes,” Seckelmann said.

“A clear example is Italy, where the Decreto Dignità of 2018 imposed a blanket ban on gambling advertising. Despite the measure, studies and government data revealed no significant reduction in problem gambling rates. Instead, the ban harmed regulated operators while illegal betting activities continued to thrive.”

Changes to the bill before Brazil Senate

Under Portinho’s amended bill, betting adverts during live broadcasts of sports events would be prohibited.

The use of artists, influencers or athletes would also be restricted in advertising. One exception is athletes where five years has passed since the end of their career.

Betting advertisements will only be allowed on open and subscription media sites between the hours of 7.30pm and midnight. Similarly, radio adverts are restricted to between 9am and 11am and between 5pm and 7.30pm.

A notable exception to the ban on advertising of bets in stadiums and sports venues in the text of the bill is that it allows for betting operators that are official sponsors of a stadium or sports team to advertise. This is limited to one per team when it comes to kits.   

Senator Portinho said the gambling advertisement restrictions were necessary due to the betting sector’s inability to self-regulate.

“One year after this law was passed, our society is sick, it is completely addicted to betting,” Portinho said. “Football clubs are addicted to betting. Communication companies are addicted to betting, to advertising, to the money they receive from betting.

“And with this pandemic, it is up to us to impose discipline.”