Legislation in Brazil Would Block Payments to Illegal Internet Gambling Sites


Posted on: August 31, 2022, 07:14h.

Last updated on: August 31, 2022, 10:04h.

Brazil’s Chamber of Deputies continues to work on legislation to shape the country’s gaming industry. Their latest measure includes a bill that would strive to prevent the use of credit and debit cards on unlicensed gambling websites.

Brazilian Chamber of Deputies
Legislators pack the Brazilian Chamber of Deputies during a session. The chamber is advancing new laws it hopes will restrict illegal online gaming in the country. (Image: Agencia Brasil)

The lower house of Brazil’s Congress is exploring Bill 1823/22, which would change the oversight of credit and debit cards. It seeks to force financial institutions that issue the cards to prevent transactions tied to illegal gambling and sites that promote child pornography.

The bill has to receive approval from the Senate, as well. Should that happen, the Central Bank of Brazil will be responsible for implementing the regulatory framework the financial institutions will need to follow.

A Step Forward

The proposed legislation follows recommendations established by the Brazilian National Monetary Council. It goes a step further, however, and defines the who and how of those recommendations.

The Central Bank of Brazil will have to determine how financial institutions block access. This would require, at some level, the creation of a whitelist or blacklist of sites in order to ensure timely intervention.

To achieve that, lawmakers are turning to a second bill. Law 12.865/13, introduced several years ago, prevents access to illicit gambling and child pornography websites, among others. However, implementation has been lax.

Credit and debit cards, as well as any other form of payment the financial institutions provide, will be prohibited. However, until better and global regulations arrive, cryptocurrency will always be an option.

The new law allows a consumer to complete a financial transaction with an unauthorized site. As soon as the financial institution realizes it was an illegal site, however, it would cancel and reverse the transaction.

This potentially means that the site would run the risk of giving away its services for free. That’s part of the concept behind the plan, with lawmakers hoping it will convince the sites to cut off access to Brazil.

There’s still more work to be done before the measure becomes law. Several legislative committees must sign off on it as it makes its way through the bureaucratic maze.

In addition, the Senate recently confirmed that it won’t tackle legalized gambling until after the October elections. As such, if it receives this bill before then, it might hold off on it, as well.

Chamber Advances Lottery Legislation

The Chamber of Deputies, which quickly advanced legalized gambling legislation, continues to work on shaping Brazil’s gaming industry where it can. It approved on Tuesday a proposal authorizing the Executive Branch to create the Health and Tourism Lotteries.

The legislation allows management by a private entity, with both physical and online sales possible. It must still finish its legislative trek and receive the green light from President Jair Bolsonaro.

The approved text determines that the Ministry of Economy will define, in 30 days, the concession of the Health Lottery and the Tourism Lottery. The Ministry of Economy would oversee all of the activity.

If the bill survives, Brazil’s National Health Fund and its Agency for International Tourism Promotion (Embratur, for its Portuguese acronym) will benefit. Each will receive 5% of the sales, with the remaining 95% going to the lottery operator. That amount must cover all expenses, taxes, and payouts.

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