Brazil government suing betting companies for BRL1 billion in collective moral damages
Brazil’s Attorney General’s Office (AGU) has filed a lawsuit in the Federal Court of Pernambuco against 17 betting companies, seeking compensation for damages to Brazil’s Public Health System (SUS).
The estimated value of the damages is BRL2.6 billion ($444.3 million). In the lawsuit, the government is also requesting BRL1 billion from the platforms for moral and collective damages. The lawsuit was filed in Pernambuco because the Northeast region has the highest concentration of socioeconomically vulnerable individuals involved in high-risk gambling.
“The defendant companies privatise significant profits derived from the financial collection from millions of bettors, while transferring the budgetary cost resulting from collective illness to the SUS and to society as a whole,” says the AGU in the lawsuit.
According to the government, the compensation stipulated by law for betting companies is insufficient to cover the costs of the healthcare system. Of the mandatory allocations from the operators’ revenue, only 0.12% goes to the Ministry of Health.
For collective moral damages, the government is requesting that the 17 betting companies are ordered to pay at least BRL1 billion to cover the losses caused by their activity. According to available studies, the companies named in the lawsuit represent approximately 80% of the market.
Companies and brands
The following companies were listed in the proceedings:
- Kaizen Gaming Brasil Ltda. (Betano)
- HS do Brasil Ltda. (Bet365)
- SPRBT Interactive Brasil Ltda. (Superbet)
- Ventmear Brazil SA (Sportingbet)
- Esportes Gaming Brasil Ltda. (Esportes da Sorte and Onabet)
- Foggo Entertainment Ltda. (Blaze)
- NSX Brazil. (Betnacional)
- EB Intermediações e Jogos S/A. (Estrelabet)
- Ana Gaming Brasil SA (7K and Casino)
- OIG Gaming Brazil Ltda. (7Games and Betão)
- BPX Bets Sports Group Ltda. (Vaidebet)
- H2 Licensed Ltda. (H2 Bet)
- Pixbet Soluções Tecnológicas Ltda. (Pixbet)
- NVBT Gaming Ltda. (Novibet)
- SevenX Gaming S/A. (Bullsbet)
- NSX Betfair Brasil SA (Betfair)
- Apollo Operations Ltda. (KTO)
According to the government, part of the costs of services provided by the SUS should be covered by the companies themselves.
The exact amount is not defined in the lawsuit, and the AGU is requesting that to be calculated later. The claim would cover the five years prior to the lawsuit and would continue as long as the damages recognised in court persist. In the lawsuit, the AGU estimates a reimbursement of approximately BRL2.6 billion.
Lawsuit follows Lula’s betting ban
The AGU’s lawsuit adds further fuel to the fire in what has been a turbulent week for the Brazilian betting sector, after the nation’s president, Luiz Inácio Lula da Silva, announced a ban on the industry last Friday.
From 6 October, all licensed sites will be blocked in Brazil.
In response, the National Association of Games and Lotteries and the Brazilian Institute of Responsible Gaming sent a statement to the Supreme Court requesting that the ban is overturned.