Online Gambling in Brazil

The biggest country in South America is soon to play host to the biggest competition in football, with the 2014 World Cup fast approaching. Unfortunately though, native Brazilians and those travelling to the country will have to look beyond its borders if they want to place a bet online.

The Legal Landscape

Gambling was actually legal in Brazil up until the end of World War II. The following year, the Social Democratic party, led by President Eurico Gaspar Dutra, rose to power. He and his party looked to clamp down on organised crime by prohibiting any form of gambling, with just two exceptions – lotteries and horse racing. All unauthorised sports betting activities had already been outlawed in 1941 via the Criminal Contravention Act, which is still in place today. Other forms of sports betting are available, but exclusively through the state-operator CAIXA.

Although the legislation from the 40s has yet to be overturned, a couple of activities have been added to the authorised list. Video gambling machines rose to popularity in the 1990s, mostly due to a legal oversight that allowed bingo machines to sponsor or foster amateur sporting events and teams. It is estimated that there are approximately 100,000 video gambling machines spread over 1,000 bingo centres. Unlike casinos, bingo halls are legal, although a scandal involving a government official caught on tape demanding bribes from bingo industry workers saw the activity banned for nine months in 2004.

Around the same time, online gambling began to emerge. Although the laws passed in 1946 do not allude to or reference this type of gambling, no Brazilian betting website has ever been established. However, Brazilians are free to gamble online on sites based in other countries. Portuguese websites are popular with Brazilian gamblers because of the shared language, although many online casinos in other countries also offer Portuguese-language versions of their sites.

This is not without opposition from the government, who remain firmly against any form of online gambling. So far there have been three significant attempts at making the activity illegal. The first was in 2008, when a legislative act similar to the American Internet Gambling Enforcement Act was unsuccessfully brought before Brazilian congress. The following year, the government tried to insist on Brazilian ISP providers blocking foreign gambling websites and online casinos. When this was also rejected, the government returned for a final stab at some sort of regulation in 2010. This time it sought to ban credit card and other financial transactions between citizens and foreign gambling sites, but was once again unsuccessful.

Popular Markets

Brazilians have a long track record with horseracing, and it's still popular throughout the country today. The present day Jockey Club de Sao Paulo was founded in 1875 under the different title of Club Racing Paulistano. The club’s famous Garden City, or Hipodromo de Cidade Jardim, is home to four courses, including a 2,119-metre grass track. It is estimated that the Club currently houses over 1,400 thoroughbred horses, with races taking place all weekend as well as on Mondays.

Football is also hugely popular thanks to a vast network of teams that play in the 27 regional leagues, with more than 400 teams listed on the Brazilian Football Confederation’s register. Football betting will no doubt receive a large boost in 2014, thanks to the nation’s duties as host of the World Cup.

The Future of Gambling in Brazil

The online gambling industry in Brazil is estimated to be worth over $265 million, with no signs of slowing at any point soon. Coupled with the string of failures by the government to bring a workable solution to the senate, it is unlikely that the status quo will change in the near future. As an emerging market, Brazil may seek to exploit the gambling industry, especially as the state backed operator CAIXA has a monopoly on regional sports betting activities. If land based regulations were to be relaxed to exploit this monopoly, the government may investigate whether having CAIXA operate online could net them additional revenue.