Brazil’s Supreme Court to Rule on Legal Status of Gambling in April 2021

Currently, gambling activity is mainly dealt with by the Law of Misdemeanours (Decree Law No. 3688/1941).

Brazil Takes Bigger Steps Towards Make Gambling Legal

Minister Luiz Fux, president of Brazil’s Supreme Federal Court (STF), released the trial schedule for the 37 plenary sessions to be held during the first half of 2021.

On April 7, the Court will handle the Extraordinary Appeal (RE 966.177) filed by the Public Prosecution Office of the State of Rio Grande do Sul, which addresses the constitutionality of games of chance in the country. The ruling may be key to the decriminalization of gambling in Brazil.

The program also reveals that cases dealing with civil and economic rights will be reviewed with priority.

The judicial debate discusses the constitutionality of article 50 of Decree Law 3,688/1941, which is the legal act that prohibits gambling in Brazil. According to many judges and courts, Decree Law 3,688/1941 is unconstitutional, since it was not validated by the current Brazilian Constitution, which dates from 1988. Hence, holding and operating gambling activities in Brazil should be legal.

The supporters of gambling legalization say that in order for a law that is prior to the Constitution to be valid, it must comply with the principles, guarantees and values that the Constitution introduces to the legal system. If it is contrary to such principles, guarantees and values, it should be deemed unconstitutional and therefore considered void.

Gambling laws in Brazil have remained unchanged for the past 80 years and now the country is making efforts to adjust the regulatory climate.

A Handful of Games Are Permitted Under Current Regulations

According to current regulations, the main criteria to establish whether a particular game is illegal is if it is solely or mainly dependent on luck. Also, the gambling activity needs to take place in a public space to be considered misdemeanor. Gambling is punishable by imprisonment of three months to one year and a fine between R$2,000 and R$200,000.

The only legal gambling activities are the lotteries under the state monopoly and horse-race betting. According to Brazilian law, poker is a game of skill rather than a game of chance and is therefore not illegal.

Although Decree Law 3,688/1941 prohibits sports betting, since the introduction of Law 13,756/2018 it is widely accepted that fixed-odds sports betting has been legalized. The Government is preparing a regulatory framework for fixed odds betting, in which players will be aware of the prizes in advance. The complete sports betting regulation is expected to become a law in June 2021.