Brazil betting ban raises concerns over growth of the illegal market
Brazil’s betting ban has intensified a debate over whether prohibition will protect consumers or push more gambling activity towards unregulated operators, with industry representatives warning the illegal market could expand as the government attempts to restrict the sector.
The issue featured prominently at a public hearing at the Supreme Federal Court (STF) on Tuesday, where 34 entities discussed Provisional Measure 1.394, which banned betting in Brazil.
The Ministry of Justice said it had requested the removal of 36,905 websites between 25 September and 29 October. The figure highlighted the scale of the authorities’ efforts to tackle illegal betting, but industry representatives argued that, by reducing the role of licensed operators in monitoring activity, the ban could make enforcement more difficult.
Pietro Cardia, representing the National Association of Games and Lotteries (ANJL), said betting volumes had fallen by 32% in the last three months of data released by the Ministry of Finance compared with the same period a year earlier. He also said that more than 60% of the market had been operating in the regulated segment prior to the ban.
Lawyer Udo Seckelmann, representing top-flight football club Botafogo, cited figures that showed 188 websites had been authorised by the Secretariat of Prizes and Bets (SPA), the gambling regulator in Brazil, while more than 66,000 illegal sites had been blocked during the 20 months of regulation.
Industry representatives argued that licensed operators had helped create monitoring structures for suspicious betting activity and supported efforts to combat match-fixing and money laundering.
São Paulo FC’s representative said regulated operators had begun monitoring, reporting and removing suspicious bets, while clubs had taken on responsibilities for educating athletes and staff on match-fixing and creating reporting channels.
Ban will hamper efforts to combat illegal betting
The concern is that a shift towards unlicensed platforms could weaken those safeguards. Representatives argued that illegal operators would not be subject to the same requirements on consumer protection, reporting or cooperation with sporting organisations.
The government, however, defended the ban on the grounds that the regulated framework had not sufficiently addressed the social and health risks associated with betting.
Brazil’s Minister of Justice Wellington César Lima e Silva described betting platforms as an “architecture of dependency”.
Minister of Health Alexandre Padilha presented indicators related to problematic gambling and suicide, while Attorney General Jorge Messias argued the previous regulatory model had failed to provide adequate protection for families.
Consumer spending was another point of disagreement. Ana Clara Marques de Barros Santos, representing Aigaming, highlighted figures from the SPA showing that 70% of bettors spent up to BRL50 per month and that average betting sessions lasted 12 minutes.
The industry used those figures to challenge the suggestion that betting was necessarily associated with high levels of household spending.
By contrast, representatives of the Brazilian Association of Supermarkets (Abras), the National Confederation of Commerce (CNC) and the National Confederation of Industry (CNI) opposed betting, raising concerns about consumption, indebtedness and health.
The debate formed part of the Supreme Court’s examination of Provisional Measure 1.394, which is being challenged by the ANJL. The association has asked Minister Luiz Fux to suspend the measure while the court considers the case.
Fux will decide the next steps. Left unresolved by the hearing was the central question facing policymakers on whether the risks associated with betting are better addressed by prohibiting the activity or by maintaining a regulated market with stronger consumer safeguards.