Betnacional owner avoids suspension in underage betting lawsuit

Betting specialist lawyer Udo Seckelmann emphasizes the potential significance of a recent court decision regarding the operations of NSX Group, owner of Betnacional, in the Brazilian betting landscape.

The NSX Group, recognized for its Betnacional brand, is set to continue its operations in Brazil following a critical judicial ruling that denied a request for suspension. The judge concluded that NSX Group had not violated regulations concerning underage betting.

This interlocutory decision arose from a lawsuit initiated by Educafro (Education and Citizenship of Afrodescendants and the Needy) and the Father Ezequiel Ramin Centre for the Defence of Human Rights. The plaintiffs sought the suspension of NSX Group’s operations, which includes the brands Betnacional, Mr. Jack Bet, and Pagbet, alongside a demand for collective moral damages amounting to BRL 500 million ($88.3 million).

The lawsuit claimed that the acquisition of NSX Group by Flutter last week did not provide adequate safeguards to protect children and adolescents from gambling activities. Initially, the Public Prosecutor’s Office had supported the injunction, necessitating evidence to confirm that effective technological measures were in place to prevent underage access to these platforms.

However, the Court of Justice of the Federal District and Territories ruled against the preliminary injunction, underscoring the fact that NSX Group had received authorization to operate in Brazil’s newly regulated online market only after fulfilling stringent licensing requirements, including the implementation of advanced facial recognition technology to ensure compliance.

“The records clearly show that NSX Group secured a five-year operational license, demonstrating that the security mechanisms demanded by the plaintiffs and required by the Ministry of Finance were appropriately installed,” the court stated. “As such, there is insufficient basis for granting the preliminary injunction.”

Lack of Concrete Evidence Against Betnacional

Udo Seckelmann, Head of Gambling & Crypto at Bichara e Motta Advogados, notes that the judge’s decision hinged on inadequate evidence against Betnacional, especially considering the company’s licensing and regulatory compliance with the Secretariat of Prizes and Bets (SPA).

“The judge established that there was no compelling evidence suggesting that Betnacional had intentionally targeted minors or violated established regulations concerning child protection,” Seckelmann elaborates. “The ruling emphasized that punitive measures, such as operational suspensions, necessitate clear and demonstrable violations, which were absent in this instance.”

Seckelmann posits that this ruling could hold “high significance” for the broader Brazilian gambling industry. It underscores the importance of licensing for operators and maintaining compliance with regulatory standards.

“This decision indicates that courts are inclined to uphold the legality of operations for companies that maintain proper licensing and adhere to existing regulations, particularly those aimed at safeguarding minors,” he adds. “Furthermore, it reinforces the judiciary’s commitment to evidence-based claims regarding allegations of non-compliance, promoting a balanced dynamic between regulatory enforcement and market stability.”

NSX Group Not Entirely Out of the Woods

Despite this interlocutory ruling, the case is far from resolved. The court has mandated the plaintiffs to present additional data, including concrete evidence demonstrating any deficiencies in NSX Group’s biometric security systems.

If such information is forthcoming, the record will be reassessed by the Public Prosecutor’s Office.

Seckelmann cautions that stronger evidence could still sway the case in favor of the plaintiffs. “Furthermore, shifts in the regulatory landscape—such as heightened enforcement protocols or new legislative measures—could affect future judicial interpretations of this matter,” he advises. “For now, however, the company remains authorized to operate, pending further developments in the legal proceedings.”

NSX Group Acquired by Flutter

Recently, it was announced that NSX Group CEO João Studart will helm Flutter Brazil after the multinational’s acquisition of NSX Group, valued at $356 million. This acquisition consolidates NSX’s brands alongside Flutter’s existing Betfair Brazil operations.

On LinkedIn, Studart expressed enthusiasm about the newly formed Flutter Brazil, stating, “Today, we begin a new stage in our journey. This acquisition acknowledges the evolution from a Brazilian startup to a recognized leader in the betting and digital entertainment sector, exemplified by influential brands such as Betnacional.”