Provisional Measure 1.182/2023 and the trademark protection of sports betting sites (bets) in Brazil

In recent years, an unprecedented phenomenon has become part of and intrinsically related to the international football market, creating a kind of symbiotic relationship between these two worlds and generating revenues of billions of dollars in sponsorships, advertisements and income: the sports betting sites, also known as “bets” in Brazil.

From European to Brazilian football clubs, currently almost all of them have as a common point the sponsorship, to some degree, of sports betting sites. Nowadays, it is impossible to watch a soccer game without coming across some reference to these companies, either as sponsors of the teams and competitions, or in television advertisements.

The relationship of this business model with the sport directs the consumer to engage in that competition itself, as an extension of the main entertainment, for example, when watching a Botafogo match, the spectator can be influenced to bet on PariMatch, the sports betting site that is the main sponsor of the club.

Therefore, it is no wonder that the combination of betting sites and sports competitions has become an extremely profitable business in recent years.

From a legal perspective, it should be remembered that betting and games of chance/gambling were allowed in Brazil until 1946 and, since then, there has been no legal basis for regulating the operation of companies in this industry. Although Law 13,756/2018 created a lottery modality named fixed quota bet (technical term for sports betting), the regulation of this sector still lacked specific rules, so that sports betting sites had been acting in the country through companies headquartered abroad, though offering products and services directed almost exclusively to Brazilian consumers.

The mobilization caused by this sector gave rise to the recent publication of Provisional Measure 1.182/2023, which establishes the rules for the operation of sports betting sites in Brazil, such as, the minimum age of 18 years for betting players, the form of taxation of the sports betting companies and regarding the authorization of use of the image, name or sports nickname and other intellectual property rights of athletes and of denominations, trademarks, emblems, anthems and symbols of sports organizations.

The Provisional Measure is already in force, but it will need to be analyzed and approved by the National Congress of Brazil for it to be converted into law – if this does not happen, the Provisional Measure will lose its effectiveness and will be archived.

Although some rules introduced by the Provisional Measure still need further regulation – such as, for example, the request for an authorization to explore the betting activities to the Brazilian Ministry of Finance –, Brazil is finally shedding light on a segment that, until then, was practically facing a situation of anomy.

In this scenario, an important question arises: how to protect the trademarks of these sports betting sites, which are so important for the credibility of their businesses, given that the lawfulness of the activity is still in a gray area?

Law No. 9.279/1996 (Brazilian Industrial Property Law) establishes in its article 128, paragraph 1 that, in Brazil, only trademarks that identify and protect activities carried out lawfully in the country can be registered.

Notwithstanding, the Brazilian Patent and Trademark Office (BPTO), the federal authority responsible for registering trademarks, has already allowed the registration of trademarks that covered, in their specification, “gambling”; however, in most cases, even after the entry into force of Law 13,756/2018, the examination of applications that sought to specify “gambling” and “betting” was interrupted so that applicants could remove such items from the description of goods as they are considered illegal in Brazil. In these cases, the penalty for keeping the illegal items in the specification of goods and services is the definitive shelving of the trademark application.

When it comes to the Madrid Protocol, which allows the protection of an international registration to be extended to Brazil, the impossibility of protecting “gambling” and “bets” by trademarks becomes troublesome as it creates a scenario in which many sports betting sites may have their trademarks registered in some countries with their complete specifications and, in Brazil, their trademark protection may need to be limited, even though they have a strong presence in the country, with high investments in advertisings.

Indeed, something seems off: sports betting sites can explore and promote online bets, focusing exclusively on Brazilian consumers, but they cannot obtain the registration of their distinctive signs, to protect their core business in the country, under the justification that these activities, that create billions in revenue, are illicit.

Thus, what is expected with the effective regulation of sports betting in Brazil is that the operation of these betting companies – which are already impacting most clubs in the first and second divisions of Brazilian football as well as the main sports competitions in the country –, will also be protected through trademark registrations.

It is important to highlight that the Provisional Measure is focused only on sports betting, meaning that, if it is converted into law without amendments, trademark protection will be restricted to this specific kind of betting.

However, the expectation is that the political buzz caused by the betting companies will lead to the voting of Bill 442/1991, which was approved by the Chamber of Deputies in February 2022, after more than 30 years of processing and now awaits the position of the Federal Senate of Brazil. The referred Bill seeks the legalization of other types of gambling, such as bingos and casinos and, if finally approved and sanctioned, it will also allow the registration of trademarks that aim to protect such activities by the BPTO.

Therefore, even though the Provisional Measure 1.182/2023 has not yet been converted into law, it represents a very important milestone for the betting industry and, as a consequence, it also raises some questions that gravitate around this theme: when will the BPTO allow the registration of sports betting sites’ trademarks to protect their core businesses? Will casinos, bingos and other types of gambling activities be regulated in Brazil? Will the regulation represent progress, stagnation or decline of this sector?

Only time can answer these and many other questions. In the meantime, we will continue to follow the development of what is, without a doubt, just the tip of an iceberg of possibilities brought by the betting industry and, consequently, for the protection of the industrial property assets of these companies in Brazil.