Brazil: President Lula to bar debt program users from licensed betting sites

Brazilian President Luiz Inácio Lula da Silva has announced that participants in Novo Desenrola Brasil, a debt renegotiation program for indebted consumers, will be blocked from using licensed online betting platforms for one year.

The announcement was made on Thursday night, April 30, during a Labor Day address broadcast on national radio and television. The program is expected to be launched today, Monday, according to the announcement.

"Anyone who joins the new Desenrola Brasil will be blocked for one year on all online betting platforms. It was not our government that let bets enter Brazil, but it is our government that will put a limit on the destruction they have been causing," stated the president on national radio and TV.

Novo Desenrola Brasil is a new version of the previous debt renegotiation policy. It is intended to ease pressure on household budgets, particularly for people carrying high-cost debts such as credit card debt and overdraft facilities. The initiative also provides for the release of resources from the FGTS, the Service Time Guarantee Fund, to pay debts.

The measure comes shortly after the Federal Revenue said Brazil’s licensed betting market had become a notable source of government revenue. On Tuesday, April 28, the agency announced that licensed betting generated R$ 3.4 billion ($683 million) in revenue in the first quarter of the year.

That figure was up 123.7% from R$1.5 billion in the same period last year, meaning collections from the sector more than doubled year-on-year, according to official data.

The increase has been linked to the implementation of new rules governing the regular operation of betting companies. The revenue collected from the sector is directed to areas including security, tourism, and sport, among others.

However, industry stakeholders warn that the proposed one-year restriction would only apply to regulated betting companies. This has raised concerns that affected users could move to illegal platforms, where they would not receive the same protections available within the licensed market.

In March this year, Lula da Silva called for legislation against online casino games as he linked gambling addiction to financial pressures within Brazilian households and said the consequences often fall on women.

“Another tragedy affecting Brazilian homes is gambling addiction. Although most addicts are men, the burden falls disproportionately on women. It's money meant for food, rent, and children's school that disappears on the cell phone screen," he stated.

"[Land-based] casinos are prohibited in Brazil. It makes no sense to allow gambling games like "Jogos do Tigrinho" to enter homes, indebting families through their cell phones. We will work together, uniting the Government, Congress, and the Judiciary, to ensure that these digital casinos do not continue to indebt families and destroy homes.”