Brazil Grapples with Rising Debt Amid Sports Betting Boom
Brazil is facing growing concerns about the impact of newly regulated sports betting on its citizens, with consumer protection agencies reporting a surge in debt-related cases and aggressive advertising tactics.
While fixed-odds betting has been legal in Brazil since 2018, the sector only began to be regulated at the end of 2024, with regulations taking effect in January of this year. Now, authorities are scrambling to address the potential pitfalls of this rapidly expanding industry.
Consumer Protection Concerns
“Senacon works to ensure that regulation prioritizes citizens’ rights. The situation is concerning. Many Brazilians are lured by illusory promises of quick gains in an environment that is often non-transparent and sometimes abusive,” warns Wadih Damous, National Consumer Secretary.
Inefficient customer service and campaigns that encourage indebtedness are also among the complaints received by Senacon, the National Consumer Secretariat.
The Secretariat highlights the increase in debt-related cases and the enticing nature of massive advertising campaigns as significant challenges to consumer protection.
Debt Among Bettors Soars
A recent survey by data intelligence fintech Klavi reveals a concerning trend: the number of indebted individuals betting on gambling platforms has skyrocketed. The percentage of bettors already in default (with outstanding debts) more than doubled between 2023 and 2024, jumping from 4% to 10.6% – a staggering 163% increase.
While the number of people receiving money from betting platforms also increased, it did so at a much slower pace. In October 2023, 0.8% of bettors received winnings, rising to 2% a year later. This growth, though positive, only widened the gap between those who bet and those who actually profit, creating a 5.5-point differential.
The research further indicates that users engage in an average of 2.8 betting transactions per month, suggesting that receiving money from betting platforms does not guarantee profit, as winnings are often reinvested in new bets.
Government Response
The Secretariat for Prizes and Betting (SPA), under the Ministry of Finance, and Senacon, under the Ministry of Justice and Public Security, have joined forces to tackle these issues. They have signed a technical cooperation agreement (ACT) to develop informational materials on consumer rights in the sports betting sector.
These materials will target both bettors and members of the National Consumer Defense System, including state and municipal Procons (consumer protection agencies), public defenders, public prosecutors, and consumer protection NGOs.
Furthermore, the agreement mandates that all online betting operators register on the Consumidor.gov.br platform as a prerequisite for operating in Brazil.
“In addition to enhancing consumer protection, this measure will serve as a monitoring tool for the SPA,” the government stated.
Advice for Bettors
Senacon advises users of betting platforms to take the following precautions:
- Verify that the platform has a valid Brazilian business registration (CNPJ).
- Ensure that the platform offers customer support in Portuguese.
- Carefully read the terms and conditions.
- File complaints via Consumidor.gov.br or with a Consumer Protection Agency (Procon) when necessary.
Source
Valor Investe
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