The Secretary of Prizes and Betting defines betting as a public service granted by the State, not a private activity.
Regis Dudena, Secretary of Prizes and Betting at the Ministry of Finance, defined fixed-odds betting in Brazil as a public service granted by the State, not as a private activity with free competition. He presented this position on Monday (27) during an event at the Higher School of Advocacy of the OAB-MG, in Belo Horizonte, where he detailed the regulatory structure implemented by the Secretariat in 2024. The Director-General of the Minas Gerais State Lottery (LEMG), Onésimo Diniz Moreira, attended the event.
“Here we are not dealing with a purely private activity of free competition. This exploitation takes place through a concession from the State. And the private sector does it as an extension of the State,” said Dudena.
According to information published by the portal O Fator , the Brazilian model operates through administrative authorization, with private companies acting as an extension of the public sector. This classification subjects the entire sector to public law and the principles of administrative legality.
The regulatory system allows for the denial or revocation of authorizations when there are doubts about the operator's suitability or risks to the public interest.
“If I have a reasonable, legitimate doubt regarding the suitability of an agent, it is the administration's duty not to grant authorization. This legitimate doubt is sufficient justification for the discretionary act of refusal, because we are talking about protecting third-party resources,” the secretary stated.
The structure was developed to combat social and economic problems, including money laundering and fraud, as well as to protect gamblers against pathological gambling.
Brazil has prohibited gambling activities since the 1940s, banning casinos in 1946. In the 1990s, attempts to legalize bingo through the Zico and Pelé Laws occurred without adequate regulation, leading the sector to revert to illegality in 2004.
“What history has shown us is that prohibition has not protected people. Regulation exists to protect, including from themselves, the people who engage in this activity,” Dudena emphasized.
The secretary challenged common interpretations of responsible gambling, shifting the responsibility to the platform operators.
“It is very common to think that the expression ‘responsible gambling’ assigns responsibility to the bettor. What we, as regulators, say is that this responsibility lies with the betting operator,” he stated.
Instead of generic time or value restrictions, the Brazilian model requires operators to know each client's profile in order to apply individualized limitations according to risk. "A low-income young person and a retired millionaire shouldn't have the same restrictions. But both should be protected," stated Dudena.
The regulation implemented CPF (Brazilian taxpayer ID) verification and facial recognition for proof of life to prevent the participation of minors under 18 years of age. Control over payment methods is also rigorous.
"The financial service provider for betting sites in Brazil needs to be a financial institution or an authorized payment institution. Because here the regulatory bar is higher and attracts supervision from the Central Bank," the secretary explained.
To obtain authorization, companies need to submit approximately 100 documents to the Secretariat. After this stage, there is a second evaluation focused on the payment of the concession fee and financial matters.
The grant for the federal government is set at 30 million reais, plus 5 million reais allocated to the bettors' protection account. Companies must demonstrate the origin of the funds before receiving authorization.
"These games can only be offered after certification by independent laboratories authorized by the Ministry of Finance. This ensures that the system is fair, auditable, and secure," Dudena stated.
Between 2018 and 2023, the absence of specific regulations created an environment conducive to irregular operations. With Law 14.790, enacted in December 2023, a period of adjustment began, with the rules expected to come into full effect at the turn of 2024 to 2025.
During the transition, the Secretariat could not demand full compliance with the rules. "It was necessary to separate the wheat from the chaff — to identify who wants to operate within the law and who takes advantage of informality and crime," said the secretary.
Dudena emphasized that casinos, bingo halls, and the jogo do bicho (a type of illegal lottery) remain illegal activities in Brazil. "It's important to be clear because many of these activities, even though they appear to be gambling, are simply illegal in Brazil," he stated.
A bill proposing the legalization of these forms of gambling has been under consideration in the Federal Senate since 1991. Initially focused on the jogo do bicho (a type of illegal lottery), the bill was expanded to include casinos, bingo halls, and slot machines. The proposal has already been approved by the Chamber of Deputies and received a favorable opinion from the Senate's Constitution and Justice Committee, and is awaiting inclusion on the plenary voting agenda.
Frederico de Assis Faria, president of the Commission on the Rights of Bets, Gambling, Games and Lotteries of the OAB-MG (Brazilian Bar Association of Minas Gerais), commented on the relevance of the debate for the legal community.
“The meticulous explanation presented by Secretary Dudena unequivocally consolidates the understanding that the operation of fixed-odds betting legally qualifies as a granted public service, fully subject to the precepts of administrative law. Clarity regarding the duties imposed, especially concerning the rigorous control of payment methods and the requirements of responsible gambling, is an indispensable condition for the sustainable development of the sector. In this new scenario, the fundamental role of legal counsel emerges as a pillar of legal support in defense of the interests of all stakeholders in the sector, whether bettors or operators,” he said.