The government proposes a Bill (PL 3626/23) that aims to regulate the administrative process related to match-fixing, fraud and irregularities in companies that operate in the sports betting market.
This initiative is part of the federal government’s effort to regulate the lottery modality called “fixed quota bet”, created in 2018 by Law 13,756.
The government argues that the deadline for regulating this modality provided for in Law 13,756 expired in December 2022.
Therefore, it is necessary to include security and integrity mechanisms in placing bets, as well as establishing rules to protect the payment of prizes and advertising.
PL 3626/23 proposes amendments to the legislation to determine that betting companies must implement internal control procedures and systems to prevent the following problems:
- Money laundry;
- Financing of terrorism;
- Weapons proliferation;
- Match-fixing.
The text allows the Ministry of Finance, as an authorizing and supervisory body, to apply precautionary measures before or during the course of the administrative process, when there is a similarity with another case and there is a risk of delay that may result in impunity or damage to public coffers and third parties.
Among the measures are included:
- Temporary deactivation of operations;
- Temporary suspension of premium payments;
- Collection of issued tickets, among other actions.
Failure to comply with these measures will result in a daily fine of up to R$ 100,000 for the violator.
In cases of evidence of manipulation of results or other similar frauds, the Ministry of Finance may determine, also on a precautionary basis, the immediate suspension of bets and the withholding of payment of prizes, among other measures.
Bill provides for a Term of Commitment
The project provides for the possibility of suspending the administrative process, before the decision at first instance, if the investigated person signs a term of commitment.
This term would oblige the investigated person to cease the practice under investigation, correct the irregularities pointed out and indemnify the damages, in addition to complying with other conditions agreed in the case, such as, for example, the payment of amounts to the single account of the National Treasury.
Prize distribution
Bill 3626/23 also proposes amendments to Law 5768/71, which regulates commercial promotions.
One of the amendments consists of updating by 25% the fee charged by the government to authorize companies to carry out campaigns for the free distribution of prizes through a draw, gift certificate or contest.
According to the project, the current inspection fee, provided for in Provisional Measure 2158-35/01, will be called the authorization fee and will no longer apply to the free distribution of prizes worth R$ 10,000 or less related to to commercial promotions.
The government’s objective is to eliminate the authorization procedure for small-value activities, maintaining the obligation of prior communication to the Ministry of Finance.
“It is intended to serve, on the one hand, the protection of consumers and guarantee mechanisms to prevent money laundering and, on the other hand, the efficiency of the advertising sector through commercial promotions”, justifies the government.
More severe punishments
The proposal explicitly includes the warning penalty as a sanction mechanism for cases of clear good faith by the promoting agents, provided that there is no damage to consumers or the Treasury.
The warning may be applied instead of the more serious sanctions already provided for, such as a fine and a ban on promotions.
The project does not deal with the effective creation of the National Secretariat for Gambling and Lotteries, linked to the Ministry of Finance, to deal with the licensing and granting processes for bookmakers.
