The Communication Committee of Brazil’s Chamber of Deputies has greenlit a proposal aimed at prohibiting social media influencers from endorsing unregulated gambling platforms.

The proposal, spearheaded by Federal Deputies Fred Linhares (in photo above), and Ricardo Ayres, is designed to curb what they describe as the “irresponsible disclosure of betting companies by influencers.”

Influencers will be forbidden from promoting gambling

If this proposal becomes law, online influencers will be forbidden from promoting gambling activities with unlicensed operators through videos, stories, or any other form of online media. Additionally, influencers will be required to clearly indicate the commercial nature of their advertising content, and any gambling-related content must disclose the funding source behind betting activities.

The legislation also mandates influencers to include information about the potential negative consequences of gambling. Moreover, any partnerships between influencers and advertisers must be formalized through a written contract.

Repercussions of non-compliance

Failure to comply with these regulations could result in influencers facing a suspension of their activities for up to six months, and social media companies could be fined up to 2 percent of their revenues for non-compliance.

The proposal is set to undergo further scrutiny in two additional committees before heading to a plenary session in the Chamber of Deputies for comprehensive discussion.

Background and objectives

Federal Deputy Ricardo Ayres emphasized that the legislation aims to address the significant impact influencers have on their followers, influencing behavior and decisions. Deputy Fred Linhares underscored the proposal’s relevance amid the ongoing efforts to introduce a regulated gambling sector in Brazil.

In alignment with this legislation, Brazil’s federal government seeks to promote awareness campaigns about the risks associated with gambling. These campaigns will be developed in collaboration with educational institutions and healthcare professionals.

Anticipating sports betting regulation

This move follows Brazil’s prolonged process of implementing regulated sports betting. While sports betting was legalized in 2018, the regulated market is yet to launch. A recent development saw the approval of the bill containing Brazil’s sports betting regulations by the country’s Senate, returning it to the Chamber of Deputies for final approval.

Notably, a clause allowing regulated iGaming was removed from the bill before its approval. Licensed sports betting operators in Brazil, upon approval, will be subject to a 12 percent tax on Gross Gaming Revenue (GGR) and must adhere to regulations governing responsible gambling, advertising, and the safeguarding of sports integrity.

Once the bill receives approval from representatives in Brazil’s lower house, it awaits the final step of being signed into law by President Luiz Inácio Lula da Silva.

Brazil’s gambling legislation for advertising

Legislation for advertising in the jurisdiction is undergoing a transformative shift.

Advertising privileges are now exclusively granted to licensed operators, subject to stringent new guidelines. Celebrity endorsements that portray betting as a pathway to wealth or social status are categorically forbidden. However advertising restrictions have not been explicitly outlined.

The industry has expressed apprehension in response to these rigorous measures, and their impact on the marketing strategies of legal operators is yet to be fully discerned. While the enforcement of these regulations remains an open question, the absence of bonus bets could pose challenges to the allure of the Brazilian market for legal operators, potentially shaping the future of the industry.

As Brazil proceeds to implement its regulatory framework, stakeholders are keenly watching to gauge the extent of enforcement and the resultant implications for the broader gambling sector.

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