A new legislative proposal in Brazil threatens to fundamentally reshape the country’s nascent regulated betting market. And we’re barely a year into legalisation. Senator Eduardo Girão, a vocal critic of the gambling sector, has tabled Bill No. 1018 seeking to prohibit virtually all customer retention mechanisms currently employed by licensed operators.

The proposed amendments to Law No. 14,790, which brought legal sports betting to Brazil in December 2023, would outlaw loyalty programmes, points rewards, and cashback offers. Operators would be forbidden from establishing or maintaining “mechanisms to incentivise, retain or stimulate” wagering activity among their customers.

Scope of Proposed Restrictions

The bill casts a wide net across standard industry practices. Deposit-linked promotions, balance maintenance bonuses, and any incentive tied to continued platform activity would face prohibition. Gamification elements including missions, challenges, achievement goals, and activity-based player rankings would also be banned outright.

Perhaps most striking is the proposed restriction on communications. Operators would be limited to “informative, institutional or educational” messaging only. Personalised communications based on betting history, a cornerstone of modern digital marketing, would be explicitly prohibited.

Licensed operators would have 90 days from the bill’s publication to bring their platforms and customer agreements into compliance, should it pass.

Regulatory Philosophy Under Scrutiny

Girão’s justification for the measure reflects a fundamentally sceptical view of regulated gambling. He characterised legalisation as having “ushered in a scenario of profound social, economic and institutional concern,” arguing that the betting sector’s economic model inherently depends on “the repeated loss of the user.”

Welcome bonuses are already banned in Brazil. But Girão contends further intervention is necessary to prevent operators from targeting customers based on their previous behaviour. He framed the proposal as essential to “preserve the economic dignity of the Brazilian population” and achieve “regulatory balance.”

Growing Political Tensions

The bill arrives amid mounting political controversy surrounding Brazil’s betting sector. President Luiz Inácio Lula da Silva recently called for a complete ban on online betting, describing gambling addiction as a “tragedy” and urging government unity on the matter.

Industry observers have pushed back sharply. Ramiro Atucha, CEO of Atucha Strategic Advisory, labelled Lula’s comments “disrespectful” to operators who have made substantial investments in the regulated market. He warned that prohibition would simply drive activity into unregulated channels, noting that current concerns stem largely from unlicensed operators rather than the compliant sector.

The debate highlights the precarious position of Brazil’s legal betting market, which finds itself caught between commercial reality and political opposition barely twelve months into operation. How lawmakers navigate these tensions will prove decisive for the sector’s viability in Latin America’s largest economy.

What the team thinks

Sheena McAllister says:

While Brazil’s regulatory landscape is clearly finding its feet, banning loyalty programmes entirely seems a disproportionate response that could actually push customers back towards unregulated offshore sites where no consumer protections exist. The UKGC has demonstrated that loyalty schemes can operate responsibly within a robust framework that prevents harmful inducements, something Brazilian regulators might be better served studying rather than implementing blanket prohibitions. Senator Girão’s proposal risks throwing out effective customer engagement tools instead of focusing regulation on the specific mechanics that genuinely warrant concern, such as loss recovery bonuses or tiered systems that reward increased spend.