Brazil Grapples with Rising Debt as Sports Betting Regulation Takes Hold
Brazil is facing a growing challenge as its newly regulated sports betting sector grapples with concerns over consumer protection. Inefficient customer service and campaigns that encourage indebtedness are among the complaints, according to Senacon, the National Consumer Secretariat.
While fixed-odds betting has been legal since 2018, comprehensive regulation of the sports betting industry only came into effect at the beginning of this year.
“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,” said Wadih Damous, National Consumer Secretary.
The Secretariat highlights the increase in debt-related cases and the enticing nature of massive advertising campaigns as key 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 surged. This includes bettors who are already in default on existing debts.
The percentage of indebted bettors jumped dramatically from 4% to 10.6% between 2023 and 2024, representing a staggering 163% increase. This more than doubles the number of bettors in debt within a single year. However, the number of people actually profiting from betting companies has not kept pace.
While the percentage of people receiving money from betting platforms also increased, it did so at a slower rate. It rose from 0.8% in October 2023 to 2% a year later. This growth, while positive, only widened the gap between those who bet and those who actually win, creating a significant disparity.
The Klavi research also indicates that users engage in an average of 2.8 betting transactions per month. This suggests that receiving money from betting platforms does not necessarily translate to profit, as those funds are often reinvested in new bets.
Government Responds with Consumer Protection Measures
The Secretariat for Prizes and Betting (SPA), under the Ministry of Finance, and Senacon have joined forces to address these issues. They have signed a technical cooperation agreement (ACT) to develop informational materials on consumer rights within the sports betting sector.
These materials are designed for both bettors and members of the National Consumer Defense System, including state and municipal Procons, 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,” stated the government.
Advice for Betting Platform Users
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 Portuguese-language customer support.
- Carefully read the terms and conditions.
- File complaints when necessary via Consumidor.gov.br or with a Consumer Protection Agency (Procon).
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