Reflections on the suitability of online jogo do bicho (illegal lottery) to Law 14.790/2023

Last week, the Brazilian market was surprised by the publication of Technical Note SEI No. 3826/2024/MF , released by the Sub-Secretariat for Monitoring and Inspection of the Secretariat of Prizes and Bets of the Ministry of Finance – SPA/MF, which “indicates the impossibility of certifying online lottery games with fixed odds that adopt rules or denominations related to the 'jogo do bicho' (illegal lottery game)”.

The SPA's conclusion was that, "because it is an illicit lottery modality and distinct from the fixed-odds betting lottery modality, as addressed in Law No. 13.756 of December 12, 2018 , and Law No. 14.790 of December 29, 2023 , lottery operators of fixed-odds betting cannot offer online games that adopt rules specific to the jogo do bicho (illegal lottery)." The SPA went further: it stated in the document that this understanding must be observed by certifying entities "even in the case of online games that have already been certified prior to the submission of this Technical Note."

The issue, however, deserves a more in-depth reflection that takes into account the true meaning and scope of the concepts of "fixed quota" and "online gaming," as provided for in Article 2 of Law 14.790/2023. Without this, there is a risk of having only a partial and mistaken view of the legislator's real intention. In this article, we intend to offer some technical and legal contributions on these concepts and on the repercussions they have had on the Brazilian gaming market.

Fundamentals presented in the SPA Technical Note

In its statement, SPA reproduces the legal concept of fixed-odds betting lottery (article 29 of Law No. 13.756/2018) and seeks to define the specific contours of fixed-odds betting lottery. It then provides a brief explanation of the dynamics of the "jogo do bicho" (illegal lottery) to affirm that it, "as a lottery modality, is prohibited in the country because it is considered a criminal offense."

Based on these premises, SPA argues that this game is "an illicit lottery modality distinct from the fixed-odds betting lottery modality," which is why "operators of fixed-odds betting lotteries cannot offer online games that adopt rules specific to the jogo do bicho (illegal lottery)."

In summary, the reasoning adopted by the SPA is based on two central premises: (i) the jogo do bicho (animal game) is prohibited by the Law of Criminal Offenses (LCP), and is therefore totally illegal; and (ii) the jogo do bicho is a “distinct modality” from fixed-odds betting lotteries and therefore does not fall under the legal concept of online gambling. Both premises, however, seem to require revision.

The Law of Minor Offenses and the limits of its application.

The first premise adopted by the SPA points to a practically unlimited application of the Law of Criminal Offenses. The SPA's logic is that, since article 58 of the LCP expressly prohibits the jogo do bicho (illegal lottery), it would be illegal regardless of its form of offering – that is, physical or virtual. This reasoning, however, disregards an important criterion for the interpretation of legal norms: the principle of specialty.

It is necessary to recall here the classic division of games and bets according to their legal regime: those prohibited, those permitted, and those tolerated. Prohibited are only those games based on betting that the law expressly states cannot be practiced: this is the case of casinos, bingo, slot games, and even the physical jogo do bicho (animal lottery). In Brazil, they are prohibited because the Law of Criminal Offenses has specific rules that apply to them: article 50 (which prohibits, among other things, betting on games where the result depends predominantly or exclusively on luck or betting on sporting competitions) and article 58 (which prohibits the physical jogo do bicho).

In turn, games based on bets that have the express and specific agreement of the legislator are permitted. Classic examples are federal lotteries and state lotteries provided for in specific laws. The issue is that, with the advent of Law 13.756/2018 and Law 14.790/2023, this list of permitted games was expanded to also include any and all types of games that can be the subject of fixed-odds betting.

From this, therefore, an important partial conclusion can be drawn: if a given game can be classified under the legal category of "fixed-odds betting lottery," it necessarily becomes permitted and can be operated if the requirements established by the legislator are met – which, consequently, will remove the general and unrestricted prohibition of the Law of Criminal Offenses by the principle of specialty. The first premise of the reasoning adopted in the SPA Technical Note is thus overcome.

Law 14.790/2023 and its central concepts: fixed odds and online gambling.

Another point that stands out when reading the SPA Technical Note is that it treats fixed-odds betting as if it were a lottery modality distinct from the jogo do bicho (illegal lottery). A broader and more in-depth look at the subject, however, leads us to a different conclusion.

For a proper understanding of the subject, it is crucial to distinguish between a betting system or form and the object of the bet. The legal concept of "fixed-odds betting," present in the two special laws that address the topic, relates exclusively to the form of the bet and not to its object. This is evident in Law 13.756/2018, which defines fixed-odds betting as "a betting system relating to real or virtual events in which it is defined, at the time the bet is placed, how much the bettor can win if the prediction is correct." Contrary to what the SPA suggests in its Technical Note, neither law restricts the specific type of game. All that was done was to require that these bets be placed on "real sporting events" or on "virtual online gaming events ."

But what, then, would online gambling be? Again, the legislator did not limit it to this or that modality or object. They preferred to be broad and generic: online gambling is any “electronic channel that enables virtual betting on a game in which the result is determined by the outcome of a random future event, based on a random generator of numbers, symbols, figures, or objects defined in the rules system.”

Therefore, it is possible to draw another important partial conclusion: neither Law 13.756/2018 nor Law 14.790/2023 contains any express rule prohibiting the offering of this or that specific type of game. And this leads us to overcome the second premise of the reasoning adopted by the SPA Technical Note.

Having overcome the two premises of reasoning in the Technical Note analyzed here, the definition of whether or not online jogo do bicho (a type of illegal lottery game) qualifies as a legal activity depends exclusively on two factors: its conformity to the legally defined betting system (fixed odds); and the conformity of its object to the concept of "virtual online gambling event".

The animal game as a fixed-odds betting system

According to Article 2, item II, of Law 14.790/2023, the fixed quota consists of "a multiplication factor of the wagered value that defines the amount to be received by the bettor, in case of a prize, for each unit of national currency wagered." The inclusion of the jogo do bicho (animal lottery) in this system seems quite clear to us.

It's worth remembering: in this game, each animal represents a group of four tens. The ostrich represents group 01, which contains the tens 01, 02, 03, and 04. The numbers increase until reaching the cow, representing group 25 with tens 97, 98, 99, and 00.

There are several betting options, and the prize varies according to the probability of winning the chosen game. For example, the "dry thousand" or "on the head" occurs when the bettor correctly guesses the thousand in the first draw and pays 4 times the investment. That is, if the bet is R$ 1,00, the bettor will win R$ 4. But there are other possibilities: if the bettor invests R$ 1,00, they will know the value of their prize: group (R$ 18,00), tens (R$ 60,00), hundreds (R$ 600,00), group pair (R$ 18,75), tens pair (R$ 300,00), tens trio (R$ 3.000,00), and group trio (R$ 130,00).

It is inherent to the essence, the nature, and in the "DNA" of the traditional jogo do bicho (animal lottery) to pre-establish the multiplication factors on the wagered amount. It's something basic, something any bettor with a minimum of knowledge already knows for sure. Therefore, there is no room for doubt regarding the classification of the jogo do bicho betting system as a "fixed odds" system.

The animal game as a type of online game

According to Article 2, item IX, of Law 14.790/2023, a virtual online gaming event consists of " an event, competition, or online gaming act whose outcome is unknown at the time of the bet ." In turn, the concept of online gaming is fundamentally determined by how its outcome is generated. According to item IX of the same Article 2, it is considered as such when the outcome " is determined by the outcome of a random future event, based on a random generator of numbers, symbols, figures, or objects defined in the rules system ."

See, dear reader, that the legislator here was quite generic and liberal. Once again, he established no restriction whatsoever on "what" is generated, but rather on "how" it is generated. And once again, the jogo do bicho (animal lottery) fits perfectly within the legal dictates. This is because, as any player knows, it is essential to this game that there be a random generation of numbers, from which the winners can be determined by the number they bet on or the group corresponding to the animal figures associated with them.

Therefore, as long as the outcome of the online jogo do bicho (animal lottery) is determined by a random number generator; that its system complies with all legal and regulatory requirements; and that this is duly verified by the certifying entities approved by SPA (Sociedade de Assistência ao Jogo do Bicho), the offering of this game should be considered fully legal.

Conclusion

In light of the foregoing, we conclude that, respectfully, the position held by SPA in Technical Note No. 3826/2024 needs to be reviewed in order to ensure due compliance with the provisions of Law 14.790/2023.

As explained here, there is no technical or legal justification to support the pure, simple, and a priori restriction of the online jogo do bicho (animal lottery) offering. We are convinced that, in addition to social legitimacy, jogo do bicho (provided it is conducted virtually) has gained legitimacy conferred by the legal order – naturally, provided that the requirements established in the laws governing online betting are met.

Everything should therefore depend on the circumstantial examination, to be carried out by the certifying entities approved by the Ministry of Finance on each online jogo do bicho platform or system, and not on a moral judgment about the past of this game – a judgment which, it should be noted, has long ceased to be in line with the real sentiment of Brazilian society.

(*) Fabiano Jantalia is a lawyer specializing in Economic Law and Gaming Law. Founding partner of Jantalia Advogados. PhD and Master's in Law (UnB). MBA in Finance (FGV) and Magnho José is a journalist, editor of BNLData and president of the Legal Gaming Institute – IJL.