Brazil Introduces Stricter Rules for Commercial Prize Promotions
The Ministry of Finance of Brazil promulgated an Ordinance intended to enhance the control of commercial lottery and prize activities and promotional practices that involve the early withdrawal of public savings. In particular, the new document defines the measures that will be used for controlling the illegal activities of those enterprises that do not receive prior authorization for their lotteries and promotions.
According to the Ordinance SPa/MF No. 1,818 issued by the Secretariat of Prizes and Betting (SPa), the new regulation regulates the control of unauthorized commercial lotteries and draws, as well as of promotional activities.
In accordance with the document, the Ordinance targets such illegal actions as running draws, contests, and advertisements without receiving prior approval from the federal government; ensuring the compliance of promotional campaigns with their conditions and purposes.
Tough Administrative Sanctions for Illegal Prize Promotions
Companies, broadcasting concessionaires, and civil society organizations that conduct lotteries and promotional campaigns without prior authorization of the federal government will be subject to strict sanctions. According to the new regulation, the sanctions will be equal to 100% of the total market value of the prizes offered to the customers.
Besides the monetary sanctions, the violators may be deprived of their authorization to conduct the promotion or will be forbidden to start similar activities within three years.
It is important to mention that communications in administrative proceedings will be conducted mainly in electronic form. Thus, organizations under investigation will usually have the legal term of 30 days to respond.
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Commitment Agreement as an Alternative Means of Resolving Disputes
To avoid the lengthy legal procedure and enhance the effectiveness of the administrative actions, the new regulation introduces the use of the Commitment Agreement as an alternative tool to solve the dispute before the issuance of the first instance decision on the enforcement.
According to this procedure, organizations under investigation will have the possibility to reach an agreement with the public authority directly without going through the long-term sanctioning process. To do that, the organization should immediately stop the disputed activity, correct the detected operational mistakes, compensate for possible damage, and pay the fee to the National Treasury Single Account of Brazil.
The commitment agreement pauses the administrative process of enforcement till its fulfillment but does not hinder the criminal investigation if it was detected during the process.
Regulatory Certainty of the Prize Promotions Increased
Thus, the regulation of prize promotion in Brazil has been enhanced again with the issuance of this ordinance. With the definition of the measures to control compliance and the penalties for violations, the Ministry of Finance attempts to increase the regulatory certainty in this area.
On the other hand, the use of the Commitment Agreement gives organizations an additional way to settle administrative issues.
Source: iGaming Brasil
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