Alerts
Legislative Update | Brazilian General Sports Law is sanctioned
We have news on the Brazilian legislative front! On July 14, 2023, the Brazilian President Luís Inácio “Lula” da Silva sanctioned, with some vetoes, Bill of Law n.º 1825 from 2022, which was the House of Representatives’ substitute to the Senate’s Bill of Law n.º 68 from 2017. Therefore, on July 15, 2023, Federal Law n.º 14.597/2023, better known as Brazilian General Sports Law (“BGSL”), came into effect.
The BGSL was carefully monitored by the videogames industry in Brazil. After much discussion, at the last minute the Senate removed the amendments that aimed to include eSports in the context of the BGSL. In this alert, we will provide a brief explanation of what is the BGSL, the reason why the exclusion of eSports from the law is only a partial victory and the possible problems that the eSports industry may still face.
1. What is the Brazilian General Sports Law?
The BGSL is the legal device that will regulate the practice of sports in Brazil, providing rules that range from subjects such as the employment of athletes by teams to the commercial exploitation of images of sporting events.
The law also aims to unify the main regulations for sports in the Brazilian legal system, including: (i) the law that regulates the hiring of professional football coaches (Federal Law n.º 8.650/1993); (ii) Pelé Law (Federal Law n.º 9.615/1998); (iii) Fans Statute (Federal Law n.º 10.671/2003); (iv) Athlete’s Scholarship Law (Federal Law n.º 10.891/2004); (v) Sports Incentive Law (Federal Law n.º 11.438/2006); and the (vi) the law that regulates the profession of football referees (Federal Law n.º 12.867/2013).
It is worth mentioning, however, that the Brazilian President made it clear, trough his vetoes, that the BGSL will not revoke the Pelé Law and the Sports Incentive Law, arguing that they need to be maintained in force in order to guarantee that there is no “legal gap in the normative framework of the sport’s rights”.
2. What is the relevance of the Brazilian General Sports Law to the eSports market?
The definition given by the BGSL to the term sport is “any form of activity that is predominantly physical that, in an informal or organized way, has as its objective the practice of recreational activities, the promotion of health, high sports performance or entertainment”. Therefore, considering this definition, it is possible to conclude that the BGSL will not be applicable to eSports.
Notwithstanding, during the discussion of the bill of law in the Brazilian National Congress, a disposition was discussed that aimed to include “virtual sports” in the law’s scope of application. However, such disposition was removed from the bill of law’s wording during its discussion in the Federal Senate. According to the arguments presented by the legislators that defended such exclusion, this subject must be regulated by a separated law, created by means of a process that allows ample discussion, with the participation of the society and of those that are interested.
In this sense, at least for now, eSports are not subject to the dispositions of the BGSL. However, it is important to alert that this does not mean that the possibilities of regulating this market have been exhausted, since there still are multiple bills of
law being processed in the Brazilian Federal Senate and House of Representatives that seek to include eSports in the context of the regulation of sports in Brazil. This means that even if the BGSL does not include eSports, this battle is a long way from being over.
3. What are the main dispositions of the Brazilian General Sports Law that may affect the eSports industry?
If there is any legislative development that results in the application of the BGSL to eSports, our main concern is still the legal uncertainty of regulating eSports within the scope of a law that was not designed to regulate them. We highlighted below some provisions that may directly affect this sector:
· Dispositions concerning the hiring and management of Sports Workers – the BGSL is composed of a specific chapter dedicated to the regulation of the labor relationships in sports and the rules for transference. It encompasses not only the athlete’s labor relationship with the sport organizations, but also the coach’s relationship with these organizations.
· Rules for the organization of sporting events – there are several rules that must be followed during the organization and operation of sporting events in order to guarantee the protection of the spectators’ rights.
· Rules about the exploitation of images of sporting events – also regulated under the BGSL is the commercial exploitation of images captured in sporting events. According to the rule, the right over the exploitation of such images, named “arena right”, is owned by the main sport organization of the event (generally, the home team). In situations in which there is no definition of the main sport organization, the exploitation of images captured during the sporting event depend on the consent of the participating sport organizations.
4. Are the other bills of law being discussed that aim to regulate eSports?
As mentioned above, there are some bills of law being discussed in the Brazilian House of Representatives and Federal Senate, that aim to regulate different aspects of eSports.
We take this opportunity to list below a few of the main bills of law currently being discussed at the federal level:
· House of Representative’s Bill of Law n.º 3450/2015 – presented by Congressman Jhc, aims to regulate the recognition of “virtual sports” as a sports practice. This bill of law is currently being discussed at the House of Representative.
· House of Representative’s Bill of Law n.º 2796 de 2021 – presented by Congressman Kim Kataguiri, aims to create the legal framework for the videogame industry and fantasy games. Even though the wording of the bill of law that is currently being discussed does not expressly regulate eSports, it is possible to construe that it freely allows the promotion of eSports matches, leading to the understanding that such promotion is not conditioned to an authorization. This bill of law was already approved by the House of Representative, is currently being discussed by the Federal Senate and was already forwarded to the analysis of the Senate’s Plenary.
· Federal Senate’s Bill of Law n.º 11 de 2022 – presented by Senator Rose Freitas, aims to include the Brazilian Confederation for Electronic Sports (Confederação Brasileira de Desportos Eletrônicos – “CBDEL”) in the National Sports System and allocate resources from the lottery to CBDEL. In this sense, this bill of law also has the objective of strengthening the understanding that eSports should be considered traditional sports for purposes of the application of the laws that regulate the practice of sports in Brasil. This bill of law is currently being discussed at the Federal Senate.
· House of Representative’s Bill of Law n.º 70 de 2022 – presented by Congressman Fausto Pinato, aims to regulate the exercise of the electronic sports activity in Brazil. This bill of law is currently being discussed at the House of Representatives.
· House of Representative’s Bill of Law n.º2891 de 2022 – presented by Congresswoman Celina Leão, aims to improve the public funding of sports in Brazil. Among the proposed dispositions, there is one that requires the inclusion of CBDEL in the National Sports System, similarly to bill of law n.º 11 de 2022 above. This bill of law is currently being discussed at the House of Representatives.
Notwithstanding all of the above, at least for now, eSports are still not specifically regulated under the Brazilian legal system. However, it is possible to notice that there is an evident interest by Brazilian legislators in regulating this market.
Our Technology and Entertainment team will continue monitoring developments on this matter and remains available for any clarifications.
