Legislation

Brazil – Committee approves ban on online payments for unlawful games

By James - 26 February 2024

The Communication and Digital Rights Committee (CCDD) has approved PL 3,403/2023, which prohibits payments over the internet for games considered illegal in Brazil. The project, by Senator Eduardo Girão received a favourable opinion from Senator Hamilton Mourão  and will now go before the Committee on Economic Affairs (CAE) for analysis.

According to the Brazilian Senate news agency the proposal assigns to financial institutions and payment companies the responsibility to adopt procedures to identify and prevent these transactions. The proposal includes as prohibited means of payment debit and credit cards, PIX, and electronic transfer available (TED), on sites inside or outside Brazil.

PIX is a payment method introduced by the Central Bank of Brazil in November 2020. It allows for instant money transfers between individuals and businesses using mobile devices, internet banking, or ATMs. Available Electronic Transfer (TED) meanwhile is a type of electronic funds transfer widely used in Brazil. It enables individuals and businesses to move money between bank accounts held at different financial institutions.

Mourão expressed concern about the proliferation of websites offering gambling and the problems caused to citizens.

“The widespread availability of these easily accessible games on the internet has led individuals and families to growing financial problems,” he said.

The senator highlighted the health disorders caused in individuals who take part in sports betting.

“It has caused a dangerous explosion of pathological conditions associated with ludopathy, which is the medical condition to characterize a person’s compulsion for gambling,” he argued.

The senator included an amendment suppressing an article that provides for the regulation of the subject by the National Monetary Council (CMN), which, in his view, could raise questions about the constitutionality of the project.

“I emphasise, moreover, that the Executive Branch may issue decrees and other regulations for the faithful compliance with the law to be enacted,” he concluded.

If approved, banks and financiers that do not block irregular payments could be fined up to one hundred times the value of the transactions.