The three controversial points about the sports betting sector in Brazil.
Sports betting has become a phenomenon among Brazilians. Since 2018, when the practice was legalized during the Temer administration, the number of bettors has boomed in the country.
The betting market dominates sponsorships of professional soccer teams, attracts mainly younger people, and raises discussions about addiction and financial losses from betting, according to a report by Folha de S.Paulo.
A Datafolha survey from December of last year showed that 15% of Brazilians have already made or currently make this type of bet—the percentage is double (30%) among those aged 16 to 24.
In addition to this increase in audience, sports betting has also become a fixed element in the budgets of Brazilians, just like video and music streaming services. The SBVC (Brazilian Society of Retail and Consumption) showed that spending on bets reduced the rate of consumption of other types of goods.
The bill to authorize betting companies with a fixed tax rate to operate in Brazil was approved at the end of 2018. After this step, the Executive Branch was supposed to regulate the sector, but the government of Jair Bolsonaro (PL) delayed the task by the four years that the first bill stipulated for regulation.
Discussions about regulation resumed last year when the Chamber of Deputies approved the online sports betting bill. The measure was one of the Lula government's efforts to increase revenue and at the time was estimated to attract R$ 1,6 billion to public coffers in 2024, according to projections from the Ministry of Finance.
At the end of 2023, the Workers' Party president approved the law regulating the sector, encompassing virtual betting, physical betting, real sporting events, online games, and virtual online gaming events.
The contribution rate for betting houses was set at 12%, and now they must pay an authorization fee of R$ 30 million to operate legally in the country. In addition, the government created the SPA (Secretariat of Prizes and Bets), linked to the Ministry of Finance, to regulate betting houses.
The practice is still undergoing regulation, with specific rules being discussed, although it has already become popular with the public. Check out the three main controversial points about this billion-dollar market.
Who are the companies?
The lack of regulation during the Bolsonaro administration created a grey area for betting operations in the country: a legal limbo that allowed the proliferation of companies in the sector operating in the country.
Most betting sites operating in Brazil since the legal loophole of 2018 were run by privately held companies headquartered in tax havens like Curaçao and Malta. They paid no taxes and made no commitments to the Brazilian government to keep their websites running in the country.
Companies argue that this type of operation in a gray market was primarily motivated by Brazil's legal uncertainty prior to regulation.
Now, companies will have to pay a license fee of R$ 30 million to operate in the Brazilian market, in addition to establishing a physical headquarters in the country and having at least 20% ownership by a native entity. The sector's contribution rate has been set at 12%.
Changes in consumption patterns and the risk of developing addiction.
The segment of the population that is passionate about football has been attracted by the seemingly easy money obtained through betting. These consumers have reduced their spending in other areas, especially clothing, groceries, and travel, according to a survey by SBVC, in order to find room in their personal budget to spend on betting.
A report by Santander bank published in June shows that the share of retail spending in household expenses fell from a peak of 63% in 2021 to 57% in 2023. At the same time, bets increased from 0,8% of household income in 2018 to somewhere between 1,9% and 2,7% in 2023.
Around 15% of Brazilians say they gamble or have gambled online, and almost a third (30%) of Brazilians aged 16 to 24 say they have gambled. Gamblers spend an average of R$260 per month, and the poorest have a significant portion of their income consumed by this activity.
The market's expansion is raising alarm among researchers, doctors, educators, and even members of support groups for gaming addicts, who reported to Folha a spread among young people and even teenagers, with recurring problematic cases. This occurs even with the legal prohibition for those under 18 years of age.
According to Karine Karam, a professor of consumer behavior and market research at ESPM, online betting brings excitement to a world where winning is very difficult. “The internet has changed our perception of time. Earning money through work is something that takes time and effort. But nobody wants to wait long for anything, especially younger people,” says the director of Markka Pesquisa, in Rio.
With gamification, she argues, the player has the illusion of being good at something. When they lose, they need to play again to win, she says. "Winning is a treat for the brain. It works like dopamine," she says, advocating for strict regulation capable of protecting users from material and psychological harm.
Manipulation of results and investigations
Alongside the regulations being implemented in Brasília, schemes began to emerge that led to investigations involving various figures, including politicians, players, referees, and even a team president.
In May 2023, federal deputy Felipe Carreras (PSB-PE) established the Parliamentary Commission of Inquiry into Sports Betting, and the commission gained strength in the National Congress with Operation Maximum Penalty, by the Public Prosecutor's Office of Goiás, which investigated the possible manipulation of football match results, including in the national Série A.
The Public Prosecutor's Office of Goiás (MP-GO) identified, at the time, situations in which players were approached to force cards or commit penalties, with the aim of illicit gain on sports betting websites.
Earlier this month, another allegation surfaced when former special advisor to the Ministry of Finance, José Francisco Manssur, stated to the Senate's Sports Betting CPI, chaired by Kajuru and with Romário (PL-RJ) as rapporteur, that a president of a gambling association reported receiving bribe requests from Congressman Felipe Carreras, rapporteur of the first CPI in Congress.
At the time, the businessman who made the complaint, Wesley Cardia, president of ANJL (National Agency of Games and Lotteries), told Folha that he would "accept the invitation from the CPI" and would answer questions about the case "directly to the commission."
Representative Felipe Carreras called the alleged bribery request a "false insinuation, denied by the association's president himself," and said that he only met with Cardia at institutional meetings, in the presence of other parliamentarians.
In another case, businessman John Textor was among those summoned by the Senate committee for making several accusations that Botafogo had been harmed by alleged fraud and refereeing errors since the middle of last year. The accusations began after Botafogo was overtaken by Palmeiras in the final stretch of the 2023 Brazilian Championship.
At the time, he presented an audio recording attributed to a former referee in which he stated to an interlocutor that he had not received the agreed-upon bribe to favor one of the clubs in a match.
The former referee in question is Glauber do Amaral Cunha, who officiated matches in the fourth division of the Campeonato Carioca until 2022. He was summoned to testify before the CPI (Parliamentary Commission of Inquiry) in early May, but remained silent throughout the session.
