An ordinance from the country’s federal gambling regulator, the Secretariat of Prizes and Betting (SPA), originally led to the suspension of temporary betting licences for four major companies: Pixbet Soluções Tecnológicas, Caixa Loterias, TQJ–Par (Grupo Silvio Santos), and 7MBR LTDA (Cbet).

The regulatory action came as part of a broader regulatory compliance effort by the Ministry of Finance and was originally published on 11 April.

It was based on the alleged failure of these companies to submit all required technical certifications mandated under SPA guidelines.

The certifications, including those for betting systems, remote game servers (RGS), and integration processes, are required under the transitional regime established during the rollout of Brazil’s updated fixed-odds betting regulations.

However Pixbet, which operates its flagship Pixbet brand, as well as Flabet and Bet da Sorte, immediately filed a writ of mandamus in response to the suspension.

The company claimed that it had submitted all the necessary documents, although the integration certificate had been delivered on 10 April — technically after the deadline.

The court accepted the argument.

It noted that the purpose of the ordinance was to guarantee operational and technical security, not to impose disproportionate penalties for minor delays, especially when the company demonstrated good faith by completing the required submissions.

The court’s injunction emphasised that all technical requirements had ultimately been fulfilled, and that penalising the operator under such circumstances would be excessive.

Furthermore, the judge cited potential economic damage, particularly referencing Pixbet’s sponsorship contract with Flamengo, a high-profile football club in Brazil.

The court determined that the temporary suspension was not justified given the completion of all necessary certifications, even if one was submitted late.

Working out the kinks

SPA Ordinance No. 300, issued on 23 February, 2024, specifies that companies operating under temporary licences had to submit certified documentation confirming the operational readiness of their systems by 30 December, 2024.

Only SPA-recognised certifying entities could issue the certifications. The ordinance provided a 90-day grace period for companies to comply, with a possible 30-day extension if a delay was justified by a certified testing body.

The four companies initially affected by the suspension were instructed to halt all new betting activities and commercial operations.

However, during the suspension period, users were allowed to access the platforms solely to withdraw existing account balances.

The provisional licences would be permanently revoked if the required documentation was not provided within the grace period, with no further extensions beyond the one-time 30-day allowance.

The companies impacted by the suspension include:

– Pixbet Soluções Tecnológicas: Operator of Pixbet, Bet da Sorte, and Flabet, three widely used platforms in Brazil’s betting market.

– 7MBR LTDA (Cbet): Known for the Cbet platform

– Caixa Loterias: A subsidiary of Caixa Econômica Federal, a state-owned bank, responsible for Betcaixa, Megabet, and Xbet Caixa (as well as lottery products)

– TQJ-Par (Grupo Silvio Santos): Connected to the well-known Brazilian media conglomerate Grupo Silvio Santos, managing Baú Bingo, Bet do Milhão, and Tele Sena Bet

Market suffering from growing pains

The temporary suspensions were part of SPA’s broader initiative to strengthen technical and regulatory compliance in Brazil’s newly regulated iGaming and sports betting sector.

The ordinance is one of several steps the government has taken to ensure that operators maintain a high standard of system integrity, fairness, and security.

The reinstatement of authorisation for Pixbet, and potentially others pending further legal or administrative review, suggests that Brazilian courts may favour a more pragmatic and economically considerate approach to regulatory enforcement.

While regulatory oversight remains stringent, operators who demonstrate a commitment to compliance, even if not strictly within the original timelines, may be granted leniency if the oversight is deemed non-malicious and non-negligent.

This ruling is likely to influence future interactions between regulatory authorities and operators, particularly regarding how deadlines and enforcement mechanisms are interpreted.

The final status of the other affected companies will depend on their respective documentation efforts and any additional legal challenges they may choose to pursue.