Brazil Introduces Emergency Regulations

The Federal Supreme Court (STF) of Brazil has implemented stringent measures to prevent vulnerable individuals from the harms associated with the gambling industry. In a landmark ruling, the STF unanimously ratified an emergency directive by Minister Luiz Fux to prevent social welfare benefits from being spent on online gambling.

The Measures Address Some Pressing Issues

The ruling mandates the Ministry of Finance to take immediate measures to prevent welfare benefits, like Bolsa Família and BPC, from reaching online betting operators. This decision follows revelations by the Central Bank of Brazil that, in August, nearly 20% of Bolsa Família funds were spent on online gambling, indicating how the industry negatively affects vulnerable populations.

Bolsa Família beneficiaries receive their benefits through state-issued cards, which are to be banned from facilitating gambling-related transactions. This measure aims to protect vulnerable families from financial harm caused by reckless gambling behaviors. It also aligns with the Brazilian government’s goal to mitigate the social burden of its regulated betting sector.

In a related development, the court advanced the timeline for banning gambling advertisements targeting children and adolescents, originally set to take effect in 2025. Fux emphasized the potential harm the commercials would bring to the mental health of young people, citing compelling evidence presented during public hearings on 11 and 12 November.

Brazil’s Gambling Overhaul Faces Rising Challenges

The National Association of Games and Lotteries (ANJL), an organization representing licensed Brazilian operators, praised the STF’s actions. The ANJL was a firm proponent of a regulated market, noting that challenges to the country’s efforts to overhaul its gambling sector could empower black market entities, undoing the government’s hard-earned progress.

Minister Fux’s measure is an important advance. ANJL will always be open to dialogue to contribute to a solid and responsible market.

ANJL statement

The future of gambling in Brazil remains uncertain as the STF sets to evaluate the constitutionality of gambling laws, with a final decision expected in H1 2025. This ruling could influence the sector’s trajectory, determining whether the country continues its ambitious reforms or faces significant long-term setbacks.

Despite the fast-approaching regulated market launch, gambling in Brazil faces rising backlash and fears over the sector’s broader social impact. The government recently launched a Parliamentary Commission of Inquiry (CPI) to investigate the financial consequences of online betting on family budgets, identifying issues and hopefully alleviating concerns.