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Brazilian court authorizes official communications to betting sites for recovering debts

By - 20 January 2025

In a significant ruling, the Regional Labour Court of the 2nd Region (TRT2), a Brazilian judicial authority that adjudicates labour disputes, has authorized the issuance of official communications to online betting sites to aid in the recovery of debts owed by gamblers with labour-related financial obligations. This ruling requires these betting websites to reveal whether debtors possess any “credits” from their wagers, thereby enabling the Labour Court to effectively pursue the enforcement of these debts.

The 4th Panel of TRT2, in a unanimous ruling, overturned a prior decision from the 4th Labour Court of São Bernardo do Campo regarding the necessity of this action. The court emphasized the importance of finding adequate means to satisfy labour claims since these debts are fundamentally tied to the sustenance of individuals.

Judge Paulo Sérgio Jakutis, the case’s rapporteur, stated that expecting creditors to verify the existence of credits with betting sites would create what is known in legal terms as “impossible proof.” He argued against placing the burden on creditors to prove the existence of credits with betting sites instead, the ruling allows the Labour Court to send official communications to these sites to inquire whether debtors have any “credits” from their wagers. This means that the obligation to disclose this information lies with the betting sites.

He further pointed out that one of the objectives of recent legislation—Law 14.790/2023, which regulates betting sites—is to combat money laundering and the concealment of assets. The Labour Court’s enhanced capability to retrieve critical information is seen as vital to advancing legal proceedings effectively.

With this decision, betting sites will need to respond to the official letters regarding the possible credits in bets of the debtors, even if the response is negative. If there are any amounts, the companies will have to wait for a new judicial order to transfer the amount to the judicial account related to the case. Additionally, the rapporteur determined that the companies indicate the most appropriate way to liquidate the assets, values, or credits they may have.

The request to send official letters to online betting sites was made in an ongoing execution process that began in 2016. The initial decision ruled that any credits from these sites were inadequate to ensure debt recovery. The 4th Labour Court of São Bernardo do Campo characterized contacting the betting sites as ineffective and speculative, leading to procedural complications.

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