Bills presented to limit gambling in Brazil amid growing pressure

In a crucial move to address gambling-related issues, two significant bills have been introduced in Brazil aimed at protecting vulnerable populations from the potential harms of gambling. The legislation, presented recently, seeks to impose limits on the betting activities of specific groups, including the elderly and individuals dependent on government financial assistance. President Luiz Inácio Lula da Silva is anticipated to make a formal announcement regarding these measures later this week, reflecting a growing concern among officials regarding the social and fiscal implications of expanding gambling in the country.

As Brazil prepares for the launch of its licensed betting market on January 1, 2025, the introduction of these bills underscores the urgent need to manage the potential risks that gambling may pose to certain segments of the population.

Senator Alessandro Vieira’s Bill PL 3,718/2024 and Congressman Elmar Nascimento’s Bill PL 3,745/2024 both focus on capping betting expenditures for vulnerable members of society. These measures were introduced on September 26 and 27, respectively, highlighting a proactive legislative approach to gambling regulation.

Specifically, PL 3,718/2024 aims to restrict betting activities among seniors, individuals listed in the active debt or credit protection registry, as well as low-income families enrolled in the CadÚnico social welfare program. The bill proposes implementing spending caps that activate once a designated amount is lost, taking into account the player’s declared income. In the most severe cases, players could face an outright prohibition on all betting transactions.

In a similar vein, Nascimento’s PL 3,745/2024 proposes a restriction that limits gambling expenditure to 15% of an individual’s monthly earnings. Additionally, this bill seeks to impose a curfew on gambling activities, banning bets from 9 PM to 6 AM for individuals identified as being at heightened risk of addiction or suffering from gambling disorders.

President Lula Expected to Announce Robust Betting Restrictions

President Lula is set to unveil a series of measures aimed at alleviating concerns about gambling’s impact on society. The anticipated announcement is likely to cover various regulatory frameworks, including enhanced controls over gambling advertising and strict limitations on betting activities among recipients of the Bolsa Família welfare program.

Moreover, Lula is rumored to expedite the prohibition of credit card usage for gambling transactions, a measure initially scheduled to take effect alongside the licensed betting launch in January. Notably, both the Associação Nacional dos Jogadores de Loteria (ANJL) and the Brazilian Institute for Responsible Gaming (IBJR) have already advised their members to implement this credit ban urgently, with the IBJR reporting unanimous support from its member organizations.

Intensifying Scrutiny on Brazil’s Gambling Landscape

The introduction of these bills comes amid mounting scrutiny from government officials and various sectors, particularly retail. Studies, including one conducted by the Brazilian Society of Retail and Consumption (SBVC), have indicated that the financial strain from gambling often diverts funds necessary for essential items such as clothing and healthcare. While the study has faced criticism due to its limited sample size and contested findings, it has attracted significant media attention, amplifying concerns among policymakers.

Another pressing issue is the prevalence of illegal gambling. Recent insights from Yield Sec reveal that legally operating onshore platforms comprise merely 9% of Brazil’s total online gambling market, raising alarms about the vast and unregulated gambling sector.

Upcoming October Deadline for Gambling Operators

In a critical regulatory update, the Brazilian government has established a September 30 deadline for gambling operators actively operating within the country to apply for a license. Only those who have submitted applications by this deadline will be permitted to continue operations beyond October 1. To remain compliant, these operators must notify the Secretariat of Prizes and Bets (SPA), a division of the Ministry of Finance, of their intended brands for the transition period ending on December 31.

Operators failing to meet application requirements will be required to provide players with a 10-day window to withdraw their funds before ceasing operations entirely.

Legal experts Eduardo Carvalhaes and Karen Coutinho from the Brazilian law firm Lefosse express optimism regarding this deadline, suggesting it could mitigate concerns among prospective license holders by expediting the removal of non-compliant operators. They stated, “The market expectation is that this measure will accelerate the elimination of non-compliant companies from January 1, 2025, to October 1.”