SAO PAULO — On Friday, Brazil initiated the blocking of over 2,000 gambling websites identified as non-compliant, marking a significant step in the government’s effort to regulate the burgeoning online betting industry. This action addresses rising fears about gambling addiction, particularly among the vulnerable segments of the population.
The enforcement of a law signed by President Luiz Inácio Lula da Silva in December 2023 is aimed at regulating and imposing taxes on betting firms. According to government estimates, more than 52 million Brazilians have engaged in online betting over the past five years. Despite most forms of gambling, including traditional casinos and slot machines, being illegal in Brazil, online betting has been permitted since 2018.
Currently, there are 96 companies operating a total of 210 gambling websites that remain authorized. The federal government has stated that these companies have shown a readiness to adhere to the new regulations and can continue operating through the end of the year while their license applications are under review. Meanwhile, some betting companies lacking authorization are taking legal action to contest their status, while others are pursuing state permits that may allow them to operate for the remainder of the year as they seek federal approval.
As of January 1, 2025, companies that receive operational clearance will be mandated to pay a fee of 30 million reais (approximately $5.3 million) and must consistently follow federal guidelines to combat fraud, money laundering, and harmful advertising practices to maintain their licenses to operate.
Dario Durigan, the executive secretary of the Ministry of Finance, emphasized that the government aims to safeguard players’ rights and well-being with these new regulations. Even though online betting was legalized in 2018, inadequate regulation has raised alarms among fiscal and health professionals. Reports from psychiatrists have indicated a troubling rise in gambling addiction cases, while financial institutions have observed an increase in expenditures linked to gambling behavior.
On the other hand, the sports and media sectors have experienced financial benefits as betting companies have significantly increased their sponsorship contributions. Almost every team in Brazil’s premier soccer league has a sponsorship deal with a betting company.
The Central Bank of Brazil estimates that Brazilian gamblers place approximately 20 billion reais (around $3.5 billion) in bets each month. This figure includes participants in the government’s cash-transfer program Bolsa Familia (Family Grant), who reportedly spent 3 billion reais ($530 million) on online gambling in August alone.
In late September, the federal government revealed plans to implement strategies that would prevent welfare benefits from being directed toward gambling activities, aiming to ensure food security and fulfill basic needs for vulnerable families.
The ongoing uncertainty surrounding some betting companies poses concerns for Brazilian sports teams, particularly in soccer. Local sports executives have voiced anxiety about potential revenue losses should these companies be permanently shut down and have urged the federal government to permit their continued operation.
