Brazil betting CPI first Senate probe in a decade to have report rejected

The parliamentary inquiry commission (CPI) on betting in Brazil has become the first CPI in a decade to have its report rejected.

The betting CPI was established in November last year, with the aim of investigating the “growing influence of online virtual gambling games on [Brazilian families’ financial spending]”.

However, the entity faced significant criticism, being accused of extortion in December after a Veja magazine investigation. Then-Senate President Davi Alcolumbre rejected a request to further extend the CPI’s deadline, describing the commission as a “circus”.

The CPI has now come to a humiliating end, with the report from its rapporteur, Senator Soraya Thronicke, rejected on a vote of four to three on Thursday.

It means none of the measures proposed by Thronicke will be adopted, leaving the industry with more questions than answers amid a time of significant uncertainty. In the last two weeks tax rises and additional advertising restrictions have been enforced by politicians, placing significant pressure on the sector.

Despite the report’s rejection, Thronicke says she will still send the documents to authorities, such as the Ministry of Finance and the Federal Police, for review.

What was in the betting CPI report?

Thronicke’s report sought to indict 16 people, including digital influencers Virgínia Fonseca and Deolane Bezerra, for offences relating to fraud and illegal gambling.

With the report only presented on Tuesday, Senator Angelo Coronel said there simply wasn’t enough time to properly analyse its findings.

Coronel, who voted to reject the report, explained: “I don’t feel comfortable voting on something I haven’t read.”

Alongside the indictments, Thronicke also presented 20 bills with the intention of suppressing gambling harms, including a ban on the controversial Fortune Tiger game, which has been linked to fraud and scams via influencer marketing schemes.

Thronicke also sought to ban betting among those registered with the social welfare programme CadÚnico, as well as implementing a prison sentence of between one and four years for those not adhering to gambling advertising regulations.

Additionally, Thronicke recommended prison terms of between four and eight years and a fine for those operating online gambling without a licence.

Other measures such as the introduction of a maximum three-hour period of betting per day and the creation of a national self-exclusion scheme were also rejected.

Why did the betting CPI fail?

Senator Eduardo Gomes raised wider concerns about the effectiveness of CPIs, claiming they needed to be overhauled.

“I don’t like CPIs. I think they work incorrectly,” Gomes said. “An effective change in how they work is needed, or we will have one CPI after another, harmed by their own functioning.”

Across 21 meetings, the betting CPI heard from only 19 people, just over 10% of the allocated testimonies. Six of those summoned failed to appear.

Additionally, only half of the 192 requests for confidential information from the Financial Activities Control Council were approved.

Senator Eduardo Girão initially said he would vote against the report due to the conduct of the CPI, although he later gave his approval due to its “interesting measures” on restricting betting.

Girão noted that none of his eight requests were approved and also highlighted the previous claims of extortion.

CPI President Dr Hiran Gonçalves responded to Girão, saying: “I don’t accept insinuations. Say the name. It’s bravado. We can’t be vague – when we are vague, we attack people who don’t deserve to be attacked.”

Alternative view added to final report

On Tuesday, Senator Izalci Lucas also presented an alternative report, which included measures such as a ban on advertising on radio and TV between 6am and 10pm, as well as making the damages caused by abusive advertising a joint liability between betting sites and digital influencers.

Although Izalci’s report was first listed as a separate vote, Thronicke added a section to her own final report.

During the vote, however, senators only reviewed Thronicke’s text and decided not to vote on Izalci’s, believing it was compromised.

Senator Gomes criticised Izalci’s report for its exposure of confidential financial data of people under investigation.