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Brazil has a sprawling esports scene, with tens of thousands of fans regularly tuning in to watch tournaments and matches. Nonetheless, it remains unclear if esports will be part of the upcoming regulation of online sports betting.
Victoria Fernandes, Head of Regulatory Compliance at Kambi, Anton Janér, Managing Director at Abios, Rafael Marchetti Marcondes, Chief Legal Officer at Rei do Pitaco, and Luiz Felipe Maia, founding partner at MYLaw Advogados, discuss the forthcoming regulation and shed light on the regulatory complications the esports industry is facing.
Gaming has been a popular pastime in Brazil for years, translating into a strong passion for esports. It was seen in the 2022 IEM Rio tournament in Counter-Strike, where Brazilian teams FURIA Esports, 00 Nation and Imperial Esports clashed against international competition in front of roaring fans at a packed Jeunesse Arena in Rio De Janeiro, generating a peak viewership of 1,4 million.
Despite being home to some of the world’s best players and most passionate esports fans, the Brazilian government hasn’t historically held a favourable sentiment toward esports. The former sports minister, Ana Moser, declared esports a form of entertainment rather than a competitive activity likened to traditional sports.
This means that esports isn’t included in the definition of sports in Brazil as stated in the General Sports Betting Law, article 1 § 1: “Sport is understood as any form of predominantly physical activity that, informally or organised, aims to practise recreational activities, promote health, achieve high sporting performance or entertainment.”
Taking office in 2023, the new sports minister, André Fufuca, announced a very different approach to Ana Moster. He recognised esports as a sport and its importance in society and proposed to create a board within his ministry overseeing esports activities.
Rafael Marchetti Marcondes, Chief Legal Officer at Rei do Pitaco, said: “Currently, there is no unity in the Brazilian esports environment. Multiple entities coexist, such as the Brazilian Confederation of Games and Esports (CBGE) and the Brazilian Confederation of Electronic Sports (CBDEL). Each has self-proclaimed themselves to be responsible for organising esports in Brazil. ”
He continues: “It is essential for the Ministry of Sports to formally address the issue to eliminate these uncertainties. Without this, it is difficult for a promising market like esports betting to advance in the country.”
Victoria Fernandes, Head of Regulatory Compliance at Kambi, added: “While we haven’t seen investments in these sorts of activities yet, the new minister’s stance bodes well for public esports discourse and betting regulation.”
Merging sports culture, betting and esports
The sports culture in Brazil has translated to esports in a very tangible way. Top-tier football players such as Lionel Messi have been seen playing Counter-Strike in their free time, engaging with the gaming community and the game titles esports fans love.
Anton Janér, Abios’ Founder and Managing Director, commented: “This overlap between the commercials and economics of traditional sports and esports has undoubtedly aided in speeding up the growth of esports in the region, bringing it to mainstream audiences.
We haven’t really been seeing this to the same extent anywhere else, and it is fantastic to see the passion esports fans in Brazil bring into watching matches and cheering for their teams.”
He continued: “As digitally native fans start exploring more betting opportunities with the upcoming regulation, we don’t only believe esports titles such as Counter-Strike or League of Legends will grow in the region, but also more sports-leaning games like esoccer, played in EA FC (former FIFA). Featuring fast and engaging gameplay, which we’ve seen to be engaging for football fans, we believe esoccer will be very successful in between and before high-tier matches.”
Esports in the realm of sports betting regulation
In Brazil, sports betting has been legal since 2018. It has already gained popularity, with 14% of the population placing at least one bet in 2023, according to the 2024 report from Anbima, the Brazilian Association of Financial Market Entities and Capital.
Nonetheless, the law hasn’t defined the scope or limitation of online sports betting, meaning operators have been awaiting regulation for further clarification. More regulations will be implemented for each thematic area, and all groundwork is expected to be laid out by the end of July to support a full-scale launch of sports betting in Brazil by the end of 2024.
Fernandes continued: “I’ve been with Kambi for four years, and the question of sports betting in Brazil has come up continuously. It has been a hot topic for quite some time, but the regulation has moved slowly.”
Fernandes described how esports is one of these thematic areas that need clarifications, especially if esports is defined as a sport. “With how the law and regulations are written right now, without clarifications, we might arrive at a very Frankenstein-esque situation,” he noted. “As esports is not regulated as a sport under the current Brazilian law, domestic esports competitions can’t be bet on.”
Luiz Felipe Maia, Partner at MYLaw Advogados, commented: “Licensed operators in Brazil can only offer bets on sports events that are promoted or organised in accordance with the rules established by the National Sports Administration, its affiliated organisations or sports administrators outside the country. This means that esports events promoted locally would not receive bets (and therefore sponsorships) from the betting companies, while foreign events could.”
Marchetti Marcondes added: “This poses additional challenges for esports. Are the publishers who own each game the organisations accredited to promote each esports title, or should there be a broader federation capable of encompassing them all?
There’s also the question of how betting is regulated in matches with U18 participation, as it determines if operators can offer them. Janér clarified the relevant aspects of the law in Brazil, saying: “It can be challenging monitoring and staying compliant in jurisdictions where all matches featuring U18 participants are banned.
“Brazilian betting law allows betting on events with most participants over 18. This simplifies the process somewhat for operators, as most professional players in the higher competitive scene are over 18.”
Navigating regulation in new markets
In many countries, the regulatory process is a tight-knit collaboration between industry and legislators. The goal is ultimately to provide a well-rounded way to allow gambling while ensuring that certain standards are met in terms of responsible, ethical and sustainable practices among operators, bettors and suppliers.
These laws and regulations differ in every country, making it an intensive task for operators looking to stay compliant in multiple regions. Fernandes described Kambi’s compliance strategy, stating: “Kambi monitors the regulatory landscape continuously. By keeping tabs on legislators and setting the processes in place for a smooth licensing process, we ensure Kambi can enter new markets on day one. So far, we have succeeded with this process very well, allowing our operators to focus on other parts of their GTM strategy.”
Janér filled in: “Kambi’s expertise in regulatory compliance and strong connections with local regulators set Abios in a very fortunate position, as it can piggyback on many of Kambi’s licences. In cases where it can’t, it has a strong legal team in its corner, allowing for smooth licensing processes.”
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Abios and Kambi continue to monitor the progress of regulation in Brazil, with the goal of going live with their first partners as soon as the betting market opens up.
