Brazilian Banks Call for Accelerated Ban on Credit Card Betting

Brazilian Federation of Banks president Isaac Sidney demanded that the government accelerate the ban on using credit cards to pay for online bets. He underscored growing concerns over problem gambling and increasing defaults in the coming months as the country awaits the full implementation of gambling regulations set to take effect in January 2024.

The Ban Should Be in Place as Soon as Possible

Using credit cards in online gambling is currently still permitted, but the financial sector is worried that continuing this practice for several more months could exacerbate default rates. According to data from the Central Bank, credit card defaults among individuals reached 7.39% in July, with a 12-month average of 7.71%. 

Banks fear that the prevalence of black market operators and the proliferation of gambling-related marketing could significantly impact the financial status of vulnerable individuals. Sidney said he has already discussed the issue with President Luiz Inácio Lula da Silva and Finance Minister Fernando Haddad. However, there is no confirmation that the government will consider the request.

We are very concerned about how much this could compromise family income and increase defaults or even cause an increase in the cost of credit.

Isaac Sidney, Brazilian Federation of Banks president

The Brazilian Ministry of Finance has consistently attempted to limit digital transactions to legitimate, traceable methods like Pix, a payment service under the umbrella of the Central Bank of Brazil. The planned ban on credit cards for gambling will become effective in January 2025 and extend to payments through cash, checks, cryptocurrencies, and other hard-to-trace methods.

Gambling-Related Losses Raise Significant Concern

Sidney pointed out that the banking sector is increasingly concerned about the danger of rising default rates and its effects on banks and Brazilian households. Financial experts warn that delays in implementing tighter controls could have long-term consequences on consumer debt as Brazil’s online gambling market records impressive growth in the face of the highly anticipated updated regulations.

Recent data revealed annual consumer losses from online gambling and betting in Brazil reached R$23.9 billion ($4.28 billion), equivalent to 0.2% of Brazil’s GDP. The total amount spent on gambling was R$68.2 billion ($12.24 billion), meaning that for every $3 wagered, bettors lost $1 on average. Such statistics have increased concern over the financial stability of individuals engaged in frequent betting and gambling activities.

Experts call for an accelerated ban on using credit cards for bets, protecting consumers from further financial harm as gambling becomes more accessible and widely advertised. With the Brazilian government still weighing its options, the coming months will be critical in ensuring the smooth launch of its revamped gambling sector.