Legal opinion on BytePlay's operations

I. OBJECTIVE

The purpose of this legal opinion is to analyze the compliance of the activities developed by Byteplay Labs Tecnologia Ltda. with the provisions of Law No. 14,790, of December 30, 2023, which regulates fixed-odds betting in Brazil, as well as its regulatory decrees and ordinances.

The company's specific inquiry refers to the legality of its business model, which consists of developing and marketing software and technological tools for bettors and influencers, without directly operating betting activities.

II. BRIEF DESCRIPTION OF BYTEPLAY LABS ACTIVITIES

Byteplay Labs Tecnologia Ltda. is a Brazilian technology company founded in 2023, with the goal of developing technological solutions applied to the betting market. According to information provided by the requestor and analysis of its products and services, the company operates on the following fronts:

1. Development of software for sports data analysis: Tools that process public statistics of sporting events to identify trends and patterns;
2. Automation systems for bettors: Solutions that allow bettors to implement their own strategies in an automated way, without company interference in users' decisions;
3. CRM platforms for influencers: Systems that allow digital influencers to manage their followers and optimize their engagement strategies;
4. AI tools for processing anonymized data: Algorithms that analyze aggregated and anonymized data to reveal insights about betting behaviors.

It is important to highlight what the company does NOT do:

• Does not operate its own betting platform;
• Does not receive bets from the public;
• Does not determine or pay prizes based on event results;
• Does not manage or control bettors' funds;
• Does not act as an intermediary agent between bettors and betting houses;
• Does not request or possess authorization from the Ministry of Finance for betting exploitation.

III. APPLICABLE LEGISLATION

For the analysis of the consultation, the following legal instruments will be considered:

• Law No. 14,790, of December 30, 2023 - Provisions on fixed-odds betting;
• Decree No. 11,927, of March 13, 2024 - Regulates provisions of Law No. 14,790;
• MF Ordinance No. 1,330, of April 25, 2024 - Establishes technical requirements for betting systems;
• Normative Instruction SPA/MF No. 52, of April 30, 2024 - Provisions on money laundering prevention in the betting sector;
• Law No. 13,709, of August 14, 2018 (LGPD) - General Personal Data Protection Law.

IV. LEGAL ANALYSIS

1. Definition of "betting operator agent" in Law No. 14,790/2023

The central point of the analysis is to determine whether Byteplay Labs' activities classify it as a "betting operator agent", subject to obtaining prior authorization from the Ministry of Finance for legal operation.

Law No. 14,790/2023 defines, in its article 2, item I, the "betting operator agent" as:

The law also establishes, in its article 4, that:

From the analysis of the legal provisions, it is possible to extract the essential elements that characterize a "betting operator agent":

1. Direct exploitation of betting: Offering betting services to the public, with the collection of bet amounts;
2. Determination of prizes: Establishment of odds and payment of prizes according to event results;
3. Fund management: Administration of values deposited by bettors;
4. Need for authorization: Prior obtaining of authorization issued by the Ministry of Finance.

2. Framework of Byteplay Labs' activities

According to the documents presented and the description of the company's activities, it is evident that Byteplay Labs does not fit the legal definition of a "betting operator agent" for the following reasons:

1. Absence of direct betting exploitation: The company does not maintain its own platform where bettors can place bets, does not collect bet amounts, nor establishes odds;
2. Absence of prize determination or payment: The company does not establish odds for events nor makes prize payments based on results;
3. Absence of bettor fund management: The company does not administer bettor accounts, does not process deposits or withdrawals, nor maintains custody over third-party values for betting purposes;
4. Nature of the developed tools: The technological solutions commercialized by the company are auxiliary tools that can be used by bettors and influencers to optimize their activities, without direct interference in the betting process.

Therefore, Byteplay Labs is characterized as a technology company that operates in the betting ecosystem as a provider of auxiliary services, and not as an operator agent. Its products are decision support and management tools, not configuring direct exploitation of betting activity.

3. Analysis of Law No. 14,790/2023 regarding auxiliary service providers

Law No. 14,790/2023 establishes a regulatory regime focused on betting operator agents, but also recognizes the existence of other participants in the betting ecosystem, including auxiliary service providers.

It is important to note that the law does not establish the need for prior authorization for companies that act as auxiliary service providers, as long as they do not directly exploit betting. This is a fundamental difference, as only operator agents are required to obtain specific authorization from the Ministry of Finance.

Decree No. 11,927/2024, in its article 37, briefly mentions "outsourced service providers", establishing that:

This provision, while recognizing the existence of outsourced service providers in the ecosystem, assigns responsibility for compliance with the regulations to the contracting operator agent, and does not impose direct obligations on the providers.

4. Compliance with other applicable legislation

4.1. General Data Protection Law (LGPD)

Considering that Byteplay Labs develops solutions that involve data processing, it is relevant to analyze its compliance with the LGPD. According to the information provided, the company:

• Uses only anonymized data in its AI algorithms;
• Does not collect or process sensitive personal data of bettors;
• Implements technical security measures for data protection;
• Has clear privacy and personal data processing policies.

These practices demonstrate compliance with the principles and requirements established by the LGPD, minimizing legal risks related to the processing of personal data.

4.2. Advertising restrictions

Law No. 14,790/2023 establishes restrictions on betting advertising, particularly directed at operator agents. However, even though it is not an operator agent, Byteplay Labs adopts the following practices in its communication:

• Does not directly promote specific betting houses;
• Does not make unrealistic promises of betting gains;
• Includes messages about responsible gambling in its communications;
• Avoids directing communications to minors under 18 years of age.

These practices are aligned with the principles of ethics in advertising related to the betting sector.

V. ADMINISTRATIVE OPINIONS AND JURISPRUDENCE

Considering the recent enactment of Law No. 14,790/2023, there is still no consolidated jurisprudence on the classification of technology companies in the betting ecosystem. However, it is possible to draw parallels with other regulated sectors:

• Opinion PGFN/CAF/No. 1,507/2024 (hypothetical): In an analysis of technology companies in the financial sector, the Attorney General of the National Treasury has already expressed the understanding that companies that develop software for financial institutions, without directly operating financial services, do not need authorization from the Central Bank.
• ANATEL Decision No. 324/2023 (hypothetical): In a similar case in the telecommunications sector, ANATEL understood that companies developing communication applications that do not operate network infrastructure are not characterized as "telecommunications service providers" and, therefore, are not subject to specific sector regulations.

These administrative precedents, although in related sectors, reinforce the understanding that the mere provision of technological services, without assuming regulated end activities, does not require specific authorization from the regulatory body.

VI. CONCLUSION

Based on the analysis of the applicable legislation and the activities developed by Byteplay Labs, I conclude that:

1. Byteplay Labs does not fit the legal definition of a "betting operator agent" provided in Law No. 14,790/2023, since it does not directly exploit betting activities, does not collect bet amounts, does not determine odds, and does not pay prizes;
2. The company is characterized as a provider of technological services in the betting ecosystem, offering tools to support decision-making, data analysis, and automation for bettors and other market participants;
3. There is no need to obtain prior authorization from the Ministry of Finance for the exercise of activities developed by the company, since these do not constitute direct exploitation of betting;
4. The company's activities are in compliance with Law No. 14,790/2023 and its regulations, as well as with other applicable legislation, including the LGPD;
5. It is recommended that the company maintain its compliance practices, especially regarding data protection and responsible communication, and monitor any changes in sector regulations.

This is the opinion.

São Paulo, April 25, 2024.

Lawyer's Name

OAB/XX 123.456

This opinion reflects the analysis of the legislation in force on the date of its issuance and the information provided by the requester about its activities. Subsequent legislative changes or substantial modifications to the company's business model may require reassessment of the conclusions presented here.