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President of Brazil, Luiz Inácio Lula da Silva, declared his intentions to stop betting in the country due to the “runaway gambling.” It happened during a video interview held on April 8.
“I wish to say the following: if it depended on me, we would close the bets. Naturally, it will depend on the National Congress and on discussions. I know they finance [politicians], I simply cannot specify names, as I am not a judge, not a policeman, but everybody knows the deputies, parties, who the senators are… Everybody knows. So it is impossible for us to proceed with this runaway gambling in our country“, Lula said.
The statement comes as a result of the growing interest in the recently regulated betting market of Brazil.
Debate About Betting Is Heating Up in Government
According to Lula, there have been 15 days of debates about the future of betting platforms. “It is already 15 days since we started discussing this issue of bets. We’ve been discussing exactly this question: if the bets do the damage we think, why don’t we ban them? Or control them to ensure there are not so many betting companies in Brazil and even the need for them“, he said.
Furthermore, Lula addressed the idea that betting sponsorships are crucial to the survival of Brazilian football teams. “‘Ah, football cannot live without bets.’ Well, football lived for one and a half centuries without bets. We want to start this debate“, Lula stated.
These words are putting some doubt over the future regulatory perspectives of the sector, especially when taking into account the entry of operators into the market under the new regulations and taxation scheme.
Households’ Debts Increase and Raise Government’s Attention
The recent debate is happening against the backdrop of the growing number of debts among the Brazilian population. According to the data collected in March, 80.4% of the country’s households have debts, which is marginally higher than 80.2% of February. That means the share reached its historical maximum from the times of the Consumer Indebtedness and Default Survey (Peic), which started in 2010.
With the debt load increasing in the country, the government started to look more closely at the issue of people’s financial well-being and discussed the possibility that some sectors might be behind the rise in indebtedness.
Government Considers Creation of a New Debt Rescheduling Program
At the same time, the federal authorities are working on a new program of debt restructuring. Among the proposals being considered is an allowance for using the resources of FGTS (severance funds) to repay existing debts.
The program is expected to target poorer populations, including those with overdue debts from 60 to 360 days. The program may resemble a simplified variant of the previously introduced “Desenrola” program of 2023. At that time, authorities planned to introduce a special discount mechanism for the rescheduling of debts.
Financial difficulties have become the topic of concern of Brazilian regulators, who believe that debt levels are negatively affecting the population, even when people are earning more money and staying employed.
Historical Context and Future Uncertainty
The sports betting business was legalized in Brazil in 2018 when the administration of the former president Michel Temer was in power. However, it was only under the current government that the sector has undergone proper regulation and implementation of taxation schemes for license holders.
Lula’s declarations indicate the possibility of changes in the regulatory environment, but no final decisions were made at this stage.
Source: BNL Data
