A bill creates a legal framework for the electronic games industry in Brazil

On October 19, 2022, the Brazilian House of Representatives approved Bill No. 2.796/2021 which creates a legal framework for the Brazilian gaming industry, considered the largest electronic games market in Latin America, with a revenue estimated at R$12 billion in 2021 and a growth forecast of 6% for this year.

The bill aims to regulate commercial activities related to the creation, development, import and marketing of video games, on any type of platform (console, mobile, PC or by subscription), as well as to entertainment services related to so called “fantasy games”. The bill proposes definitions for “video games” and “fantasy games”, as follows:

  • Video games: computer program containing graphic and audiovisual elements, under Brazilian software law, for entertainment purposes, in which the user controls the action and interacts with the interface; control unit and accessories, for private or commercial use, in particular dedicated to the execution of video games; and software for mobile phone application and/or web page developed for the purpose of entertaining with fantasy games, expressly excluding from this definition “slot machines” and other games of chance;
  • Fantasy games: disputes that take place in a virtual environment, based on the performance of athletes in real sporting events, in which (a) virtual teams are formed whose performance is highly dependent on the knowledge, strategy and skills of users; (b) rules are pre-established, including the existence of any award of any kind; (c) the value of the Prize does not depend on the number of entrants or the volume raised with the collection of the Entry Fee; and (c) the results are not the result of an isolated score or activity of a single athlete or team in actual competition.

Some other important aspects of the bill indicate the legislative intent to develop a national gaming industry – tax incentives at the production and development stages as well as the requirement of government programs for the development of human capital for the industry.

With the approval of the House of Representatives, the bill has now been sent to the Senate for consideration and if approved, it will be subject to presidential assent or a veto.

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