Gambling with government funds

President Luiz Inacio Lula da Silva has threatened to pull the plug on Brazil’s new online sports betting market after it emerged the country’s poorest citizens are using government financial aid to bankroll their gambling.?

Lula made the threat to reporters Sunday while in Sao Paulo to cast his vote for the city’s municipal elections. According to Reuters, the Brazilian president said he will “ban online betting if regulation does not cure addiction.”

“If regulation doesn’t work, I won’t hesitate in putting an end to (betting) definitively,”

Lula told the press.?

Soccer is like a religion in Brazil and its citizens have wholeheartedly embraced sports betting since the market went legal in 2018. But the Lula administration is facing a backlash over the vertical after bank studies revealed online sports betting is affecting household incomes, “reducing consumer spending and bankrupting families.”

Betting on aid

Lula has reportedly deemed it “unacceptable” that families with low incomes receiving social security aid through the government’s Bolsa Familia program are using that cash to gamble.

The government’s cause for alarm comes from a central bank report that recipients of the Bolsa Familia support spent R$3bn ($550m) of the aid money to gamble in August.

According to Reuters, Lula is conflicted about sports betting. On one hand, he acknowledges cultural betting traditions that have been around since the 19th Century. He stated that despite bans, illegal betting on lottery numbers, known as “jogo do bicho” and cockfighting, Brazilians will still bet. 

On the other hand, Lula is concerned about the impact sports betting is having on the country’s poorer citizens.?

“Everyone knows that the person going to buy bread in the morning will make a small bet using the bread money,” Lula acknowledged.

knows people “who lost their house and car”

“But what I cannot allow is betting to turn into a disease, an addiction, and for people to become dependent on it:” The president gave his comments extra meaning when he stated he knows people “who lost their house and car” over gambling. 

Sports betting boom

Brazil’s sports betting market has exploded since Lula signed off on the country’s Fixed-Odds Betting Law earlier this year. Media reports cite a list Brazil’s Secretariat of Prizes and Bets published recently in which 200 fixed-odds sports betting brands have had their licenses approved, making the country the “fifth-largest” betting market in the world.

Some of the licensees are the world’s biggest corporate betting brands, including Flutter Entertainment and Entain. 

In preparation for the launch of a federal, regulated gambling market in Brazil on January 1, 2025, the country’s Ministry of Finance stated unlicensed gambling firms had to quit operations by October 1.