The Notion of Skill Games in Brazil

Gambling’s legal framework is not structured in Brazil. Since the 1940’s, Brazil has closed all the gambling operations with only state monopolies for lotteries and horse race wagering. in the 1990s, bingos and slot machines were permitted for a little while, but they were banned in the middle of the 2000s.

The current regulation still bans gambling operations in Brazil, but two bills are currently in debate in Brazilian Congress that may authorize all sorts of games of chance in the near future. The Law of Misdemeanors (Decree Law No. 3688/1941) is consequently the reference text that regulates gambling activities. It was written with the purpose to preserve societal standards of 1941.

It prohibits the organization of gambling, referred to as "games of chance" in the legislation, that is, those who “establish or exploit games of chance in a public place or place accessible to the public, by means of the payment of an entry fee or otherwise, commit a misdemeanor”.

Establishing or exploiting games of chance is forbidden (Article 50, Law of Misdemeanors). In this case, "establishing" means providing access to a game of chance, while "exploiting" means making a profit out of third parties' participation in the game. The income that the law bans does not relate only to money, but also to any economic gain.

ii Definition of Gambling in Brazil

The Brazilian Civil Code expressly nominats the contract of “Game” but doesn’t define it. Its definition is provided by jurisprudence.

Luiz da Cunha Gonçalves defines a game contract as ‘a commitment, agreed as for hobby or as for desire for money, between two or more individuals, in which each player agrees to pay a certain sum of cash or something else to the other party(ies) if he/she loses, based on some future event, which implementation depends, at least in part, on the activity of the players”.

Clóvis Beviláqua , the author of the previous Brazilian Civil Code, defines a game contract as “a random contract, in which two or more people promise a certain sum, among the contractors, to the person for whom the result of chance is most favorable”. In the same vein, Pablo Stolze Gagliano and Rodolfo Pamplona Filho offer a very detailed explanation on game contracts: In fact, the contract game can be defined as a legal transaction whereby two or more people hold a particular promise (usually with pecuniary content) in favor of the person who achieves a favorable result in the performance of an act in which everyone participates. Note that the game (and thus the success or failure of each party) necessarily depends on the performance of each party (called a player), either by his intelligence, or by his skill, strength, or simply luck.

To be categorized as a "game of chance", the conclusive condition is the element of luck as the prevailing factor for the result of the game. Then, the more the game is based on luck, the highest the probability that the game will be classified as a "game of chance" and fall under the legal prohibition. ‘Games of chance’ are defined by Article 50 of Decree-Law 3,688/1941 (the Misdemeanor Law or Criminal Contravention Act) as: a) a game in which winning or losing depends exclusively or principally on chance; Games of chance are treated as misdemeanors, which are recognized by law as offences punishable by minor penalties (Article 61 of Law No. 9,099/95). The purpose of using the term ‘misdemeanor’ is to implement the ‘moral police’, which, according to Professor Humberto José da Nova, includes ‘safeguarding morality’ in order to ‘prevent certain illegal and vicious acts, or defend certain moral sentiments regarded as indispensable to harmonious social coexistence, the effects of which are harmful to the interests of the collectivity’ . Contrary to this, ‘games of skill’ are those whose results depend on ability of the player, more than on luck. These are legal .

iii Online gambling

Logically, hence the ruling that administrates games of chance was enacted in the early 1940s and has not been adapted ever since, there is no distinction between land-based and online gambling. The current law is understood as including both. The law forbids the establishment of the means or provision of access to games of chance. This should be construed as any kind of means, including in the virtual world.