Brazil Mandates Tobacco-Style Health Warnings for Betting Advertisements

Brazil's Ministry of Finance is cracking down hard: new rules for gambling advertising, set to be published on Friday, will require mandatory warnings. These warnings will resemble those found on tobacco or alcohol products. Online gambling operators, commentators, and influencers will need to adapt their marketing strategies. These measures are part of a broader initiative to combat illegal advertising and dispel the notion that betting is a reliable source of income. It appears Brazil is serious about curbing unchecked gambling advertising.

Numbers and facts

Finance Minister Dario Durigan announced that the warning labels will feature messages such as “betting makes you lose money,” “betting can cause addiction,” and “betting is not an investment.” These direct warnings aim to protect players from the risks. The new regulations also prohibit creating a sense of urgency in advertisements. Furthermore, winnings or prize histories can no longer be used to persuade consumers to place bets. This also applies to sports commentators and experts appearing in betting-related content. They are not allowed to use their technical authority or specialist knowledge to push consumers towards a particular wager.

„We are imposing restrictions on betting advertisements in the country. I don’t need to state – as it goes without saying – that we have zero tolerance for illegal operators. Therefore, illegal betting operations are not authorised in any way, and neither advertisers nor media outlets are permitted to run any advertising involving a company not authorised to operate in the market.” - Dario Durigan, Brazil’s Minister of Finance

Another ordinance, prepared with the Ministry of Justice, targets unauthorized operators. It aims to reinforce the ban on advertising companies that do not hold approval to operate in Brazil's regulated market. This sends a clear signal to grey markets. The debate around gambling in Brazil is already tense. Recent discussions about increasing gambling taxes from 12 percent to up to 24 percent of Gross Gaming Revenue (GGR) have caused an uproar. According to iGaming expert Elvis Lourenço of EX7 Partners, these plans are “insane” and could lead to the market’s collapse. The original law stipulated an 18 percent rate. A provisional measure to increase it to 18 percent failed in Parliament earlier this month, as did plans for retroactive taxes on pre-regulated gambling activities.

Background

The Brazilian government under President Lula is attempting to appease the conservative population with these measures. Gambling is often used as a political bargaining chip. The government views gambling, banks, and billionaires as the “three B’s” where taxes can be increased. These revenues are important for the state budget. However, the industry argues that excessive regulation and taxation could endanger the legal market and drive players to the black market. The recent tax hike debate, where Parliament rejected an increase from 12 to 18 percent, led to a new bill proposing a 24 percent GGR tax. Another source indicates that the Workers' Party (PT) is even trying to overturn the entire gambling law, which was only introduced in 2023. This highlights the political volatility regarding gambling in Brazil.

The issue of player and consumer protection is therefore taken very seriously in Brazil. The similarity to alcohol and tobacco warnings underscores the government's desire to clearly communicate the risks of gambling. This approach could also draw attention from other countries facing similar issues with aggressive gambling advertising. Nevertheless, there is a risk that excessive regulation and taxation could have unintended negative consequences by strengthening the black market, as Lourenço fears. The balance between player protection and a healthy legal market is fragile.

Why it matters for German players

For German players, this means that such developments, both in Europe and internationally, are closely monitored. Germany has already established a very strict regulatory framework with the Glücksspielstaatsvertrag 2021 (GlüStV 2021). This includes a monthly deposit limit of 1,000 euros, a 1 euro per spin betting limit on online slots, and the central self-exclusion system LUGAS. Gambling advertising in Germany is also heavily regulated, particularly concerning minors and individuals prone to gambling addiction. There are already strict requirements for reputable, GGL-licensed online casinos. Language portraying betting as an investment or a secure source of income is also strictly prohibited in Germany. German regulation also aims to curb the proliferation of unlicensed providers who do not adhere to these rules. Therefore, offers from MGA or Curacao-licensed providers, often enticing with more aggressive advertising practices and higher limits, are not safe options.

What it means for GGL-licensed casinos

GGL-licensed casinos in Germany must already comply with the highest standards in player protection and advertising. This includes transparent information about addiction risks and responsible gaming. The new rules in Brazil demonstrate that the trend towards stricter regulation continues globally. GGL-casinos are already exemplary in this regard and meet many requirements that have yet to be introduced in other countries. The German gambling authority (GGL) strictly monitors compliance with these regulations. It controls adherence to advertising guidelines and consistently sanctions violations. This ensures that German players can gamble in a safe and responsible environment.