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Could Proposed Regulations in Brazil Impact U.S. Poker Sites?

BrazilAttempts to streamline gambling regulations in Brazil could have an impact on U.S. friendly poker sites – but only in the worst possible scenario.

Until last year, Brazilian gambling laws had remained largely unchanged since 1941 when the Criminal Contravention Act prohibited betting on games of chance except horseracing and the state-sponsored lottery. Last year´s change prepared the way for in-person sports betting; and, although the change to the law doesn´t take effect until 2020, a debate is ongoing about lifting further restrictions.

Reformers would like Congress to pass laws regulating bingo, online sports betting, and online casinos. If they get their way, and a law regulating online casinos is passed, the likelihood is the legislation will also include online poker – which up until now has been generally regarded as a game of skill. Brazilian TV networks even ran adverts for online poker sites in the past.

So, Is Online Poker Legal in Brazil Already?

Technically no. In 1991, a bill was passed declaring that betting on games of skill was allowed provided the games were covered by legislation. The Brazilian Congress never got around to passing any further legislation relating to games of skill, so poker technically remains illegal – yet nobody has ever been prosecuted for a poker-related offense and large live poker tournaments in Brazil are a frequent event.

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With regards to online poker, the Internet wasn´t around in 1991, and online gambling is treated in the same way as brick-and-mortar gambling under the 1941 Criminal Contravention Act. The reason online poker operators are able to provide a service is due to a loophole in Brazilian contract law that allows a transaction to take place if the receiving party is located in a jurisdiction where the transaction is legal.

As the party receiving a gambling transaction in a game of online poker is the poker site operator, and because their services are located in jurisdictions such as Malta, Costa Rica, and the Isle of Man where gambling is legal, online poker is tolerated – at the moment. If a law to regulate online casinos was to pass, and the legislation included online poker, the tolerance of unregulated online poker would change.

How Would That Impact U.S. Poker Sites?

Non-regulated U.S. poker sites are not exclusively populated by U.S. players. A lot of players from Europe, South America, and the rest of the world play on non-regulated U.S. sites because the opportunities and rewards are better than they get on domestic or worldwide sites, and because a U.S. facing schedule suits them better. Not everybody works a 9:00am to 5:00pm Monday to Friday routine.

In much the same way as unregulated U.S. poker sites don´t accept players from regulated U.S. states, they would no longer accept players from Brazil. This would have a meaningful impact on traffic on the Pai Wang Luo Network due to Bovada Poker providing a service to players in Brazil, and on the Winning Poker Network where Ya Poker is a popular Spanish language skin.

The impact isn´t only about cash game liquidity. If operators are not making as much money as previously, it might be the case the value of opportunities and rewards is also reduced – directly impacting players themselves. Now, as I mentioned above, this is a “worst possible scenario” eventuality, but the Brazilians have barely touched their gambling laws in nearly eighty years, so it is about time for a chance – and my gut feeling is it´s not going to be a good one for U.S. poker sites.

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