In the past days, the Secretariat of Prizes and Betting of the Ministry of Finance (“SPA/MF”) has published two new ordinances:

• Ordinance SPA/MF No. 1,857 of November 25, 2024, which regulates the transfer of bettors’ data and funds from fixed-odds betting between legal entities of the same economic group, with a view to the start of the regulated market.
• Ordinance SPA/MF No. 1,902 of December 5, 2024, which addresses the immediate implementation of advertising regulations in Ordinance SPA/MF 1,231/2024, defining guidelines for responsible gambling, as well as regulating marketing, communication, advertising, and propaganda actions for the betting sector.

Below are the main highlights of the new ordinances:

I.  Ordinance SPA/MF No. 1,857 of November 25, 2024

1. Effectiveness

• The ordinance came into effect on November 26, 2024, on the date of its publication.

2. Purpose

• To regulate the transfer of data and resources of bettors of the fixed-odds lottery betting method between legal entities of the same economic group.
• To define the circumstances under which such transfers are not allowed.

3. Definitions

• Transfer of data and resources: sending the data and resources of bettors registered with the sending legal entity to the receiving legal entity, both from the same economic group.
• Sending legal entity: Brazilian or foreign entity that operates the fixed-odds lottery in Brazil.
• Receiving legal entity: Brazilian entity that, up to September 17, 2024, has submitted to the SPA/MF the request for authorization to operate the fixed-odds lottery.

4. Transfer approval request

• Interested legal entities must request approval to SPA/MF by December 13, 2024, to transfer bettors’ data and resources, provided that such legal entity has already received from the SPA/MF the notice for the payment of the authorization fee (outorga).
• The Data and Resource Transfer Request must be submitted through the Electronic Information System (“SEI”), available at https://sei.economia.gov.br/.
• The deadline for the SPA to evaluate the request is up to 15 days from the date the request is filed. The deadline may be extended by a further 15 days in the case of requests containing insufficient information, or when further clarification is required.
• The transfer of data and resources approved by SPA/MF can only be carried out after publication in the Federal Official Gazette of the ordinance authorizing the receiving legal entity to operate the fixed-odds lottery.

5. Transfer requirements

• The identification and registration of bettors with the sending legal entity must comply with the provisions of SPA/MF Ordinance No. 722, and SPA/MF Ordinance No. 1,231.
• The transfer must have been previously and expressly consented to by the bettors of the sending legal entity (opt-in).
• The data transferred to the receiving legal entity must be stored and processed in compliance with the rules of Ordinance No. 722.
• Each bettor’s funds must be duly identified at the sending legal entity and at the receiving legal entity by the holder’s registration number in the Individual Taxpayer Registry (“CPF”).

6. Bettors’ rights

• To consent in advance to the transfer of their funds to the transactional account at the receiving legal entity.
• Choose to withdraw their funds or authorize the transfer to the transactional account at the receiving legal entity.
• In the event of open bets, choose to cancel the bets or keep them on the receiving legal entity’s platform.
• The deadline for bettors to exercise their rights on the platform of the sending legal entity with respect to the transfer of their respective data and funds is March 31, 2025.
  • If the transfer is not possible, legal entities must make efforts to contact bettors between April 1, 2025, and June 30, 2025.
  • Resources not sent to bettors or transferred to the receiving legal entity upon bettor’s consent by June 30, 2025, must be reverted to the Student Financing Fund (“Fies”) and the National Fund for Public Disasters, Protection and Civil Defense (“Funcap”).

7. Prohibited cases

• Legal entities that have not applied for or obtained authorization to operate the fixed-odds betting lottery cannot transfer data and resources.
• Legal entities that have not requested approval for the transfer of data and resources or that have not had their request for the transfer of data and resources approved by decision of the SPA/MF cannot transfer data and resources.

8. Consequence of prohibited cases

• Legal entities that are unable to carry out the transfer of data and resources must:
• close the open bets in the national or foreign legal entity; and
• transfer the resources available in the bettors’ transactional accounts in favor of a deposit or payment account previously registered by them.

9. Summary of the main dates of the new ordinance

Demarest’s Privacy, Technology and Cybersecurity, Public and Regulatory, Banking and Finance, and Corporate teams are monitoring the developments of this topic and remain available for any clarifications that may be necessary.

II. Ordinance SPA/MF No. 1,902, of December 05, 2024

Today, December, 06, 2024, the Secretary of Prizes and Betting of the Ministry of Finance (SPA/MF) published Ordinance SPA/MF No. 1,902, dated December 5, 2024.

This ordinance immediately applies certain rules of SPA/MF Ordinance No. 1,231, dated July 31, 2024, in compliance with the preliminary injunction issued by Justice Luiz Fux (on November 12, 2024) – and unanimously ratified by the en banc Supreme Court (“STF”) in a decision published on December 5, 2024 – in the direct actions for the declaration of unconstitutionality (“ADI 7721” and “ADI 7723”) brought against the Gambling Law (Law No. 14,790/2023).

Key points of the new ordinance:

1. Immediate implementation:
   • The rules mentioned below take effect immediately.
   • Enforcement and penalties for non-compliance also start immediately.
   • Other requirements and rules from Ordinance SPA/MF No. 1,231/2024 that do not have immediate effect will be enforced starting January 1, 2025 (end of the original adaptation period).
2. Advertising prohibitions:
   • Advertising of betting lotteries directed at children and adolescents is prohibited.
   • Advertising cannot be shown in media where most of the audience is under 18, including online media.
   • Using images or elements appealing to those under 18 is prohibited.
   • Associating betting with cultural activities for children and adolescents is prohibited.
3. Mandatory warnings:
   • All advertising must include age restriction warnings, such as “18+” or “prohibited for individuals under 18”.
4. Sponsorship restrictions:
   • Betting operators cannot:
   • Sponsor children or adolescents.
   • Encourage children or adolescents to bet.
   • Sponsor events or teams aimed at children or adolescents.
   • Sponsor events primarily directed at children or adolescents.

Although this new ordinance was issued in compliance with the aforementioned preliminary injunction, it does not provide for the immediate implementation of measures by the Ministry of Finance to prevent the use of social and welfare resources (such as Bolsa Família) for fixed-odds betting.

Demarest’s Regulatory and Dispute Resolution teams  remain available for any clarifications that may be necessary.