Brazil Bill Seeks to Block Loyalty Programs and Cashback in iGaming

(AsiaGameHub) –   Eduardo Girão, a long-standing opponent of gambling in Brazil, has put forward a bill aiming to ban specific incentive and user retention mechanisms in the iGaming space, including loyalty programs and cashback offers.

Senator Girão’s Bill No 1018, which was released publicly this week, seeks to revise Law No 14,790, the legislation that legalized betting across Brazil in December 2023.

The proposed bill would prohibit licensed betting operators in Brazil from “creating, running or promoting mechanisms designed to incentivize, retain or encourage” gambling activity.

Bill No 1018 would also ban loyalty, rewards or points schemes, along with the practice of providing cashback to bettors.

Promotions tied to making a deposit, keeping a minimum account balance, or maintaining regular activity on the platform would also be outlawed under the proposed measure.

Gamification features would also be prohibited, meaning operators would no longer be allowed to include goals, missions or challenges on their platforms, nor rank players based on their betting activity.

Only “informative, institutional or educational” communications with players would be allowed, as the bill also introduces a proposed ban on personalized messaging intended to urge users to gamble based on their past betting history.

Should the bill be passed into law, licensed operators will have a 90-day period following its official publication to adjust their platforms and user contracts to meet the new requirements.

What motivated Girão to introduce this bill?

Girão has held a consistent anti-gambling stance for years, repeatedly calling for the reversal of online betting regulation due to its negative social impacts.

When laying out his justifications for Bill No. 1018, Girão once again targeted the sector, claiming that legalization has “created a situation of deep social, economic and institutional concern”.

While welcome bonuses are already prohibited under existing rules, Girão argues that additional restrictions are necessary to stop operators from retaining players by leveraging data on their past betting behavior.

“This is an activity whose core economic model relies on users suffering repeated losses, which places a duty on the State to take firm action to reduce its harmful effects,” Girão stated.

“Against this backdrop, the approval of this proposal is a necessary step to mitigate the negative social impacts of this activity, protect the economic dignity of the Brazilian population, and improve the regulatory balance of the sector.”

Brazilian politicians keep targeting the gambling sector

The licensed betting sector has become a fairly polarizing topic among politicians in Brazil.

Earlier this month, President Luiz Inácio Lula da Silva drew anger from the sector when he urged the government to work collectively to ban online betting, describing gambling addiction as a “tragedy”.

Ramiro Atucha, founder and CEO of Atucha Strategic Advisory, called Lula’s remarks “disrespectful” to operators that have invested capital into the Brazilian market.

Atucha also warned that banning online betting would only drive growth in black market activity, telling iGB: “I find it hard to believe that someone as smart as [Lula] does not know that players will ultimately end up using unregulated market platforms.

“All the issues they are listing are linked to unregulated operators, not to licensed, regulated providers.”