'Government starts tightening the stakes, but it's still not enough'

The Ministry of Finance announced, on Thursday (9), a series of restrictions on online betting advertising in Brazil. The measures directly affect the betting sector and were assessed in an editorial by Folha de S.Paulo as a correct step, but insufficient, given the damage caused by digital gambling.

The intervention operates on two fronts. The first requires betting companies to include warnings in their advertisements, such as that betting "makes you lose money" and "can cause addiction." The second restricts the content of advertisements: it will be prohibited to encourage urge-based betting, such as actions that exploit specific situations during sporting events to incite viewers to spend money. The promotion of gambling by commentators and supposed experts will also be banned.

Taxation outside the package

The missing point in the package is a proposal to increase taxation on companies in the sector. Under the influence of the sector's multi-billion dollar lobby on parliamentarians, digital betting companies currently pay only 13% direct tax on revenue. This percentage will only reach 15% in 2028, according to the text.

Data from industry associations themselves indicate that the sum of all taxes levied on the activity does not exceed 35%. The tax burden on cigarettes and distilled beverages, by comparison, exceeds 70%, according to the same editorial.

The text points out that the Selective Tax, foreseen in the tax reform, could correct this distortion and equalize the tax treatment of betting with that of tobacco and alcohol. Advertising in these two sectors is also more restricted than the current regulation of online betting, which signals room for further tightening beyond the announced package.

Limits of regulation

The editorial acknowledges that a total ban would not be the best solution. An adult individual has the right to choose what they consume, even if it harms their finances or health. However, when the collateral damage of a product or service affects the community, the government is authorized to restrict its advertising and tax it differently. Gambling addiction puts pressure on health services and other public policies.

Folha's assessment is that Brazilian authorities have started down the right path in addressing the effects of gambling; however, adjustments need to be made, especially in the tax field.