With the launch of the Novo Desenrola Brasil programme, the government has created opportunities for families in debt to renegotiate their contracts and get back on a more balanced financial footing. However, the ban on gambling opens up the illegal market to those who are unable to play on licensed websites. That is the opinion of Plínio Lemos Jorge, president of the Brazilian National Association of Games and Lotteries (ANJL).
“A gambler who may be in debt but still plays on a website authorised by the Ministry of Finance will not stop gambling. They’ll end up on one of the thousands of illegal platforms and will remain just as indebted, or even more so,” he said.
The official believes that the programme offered proposals to improve the financial well-being of the Brazilian population through debt renegotiation, accompanied by interest rate reductions, as well as the possibility of using the Unemployment Guarantee Fund. “But there are some highly controversial issues that could even worsen some people’s debt, such as those related to gambling websites,” he said.
80% of the debts are related to miscellaneous expenses, not gambling
Lemos Jorge argues that preventing beneficiaries from gambling is not the right approach. In his view, one of the reasons is that gambling is considered one of the main causes of debt.
“That’s not true and the numbers prove it. According to the latest data from Serasa Experian, one of the country’s leading authorities on the subject, 82.8 million Brazilians were in debt in March, equivalent to 49% of the population. That same month, the Federal Government’s Betting Management System recorded nearly 10 million individuals placing bets on licensed websites. There’s no way of knowing how many of these gamblers are in debt,” he noted.
He follows the logic of the numbers. “Based on the overall data, if half of the bettors fall into this category, that would mean five million people out of a total population of 82.8 million, accounting for 6% of bettors. Of this group, however, according to the survey’s figures, 47% reportedly have debts with banks and 21% with utility bills, such as water and electricity. Another 11% have debts with the service sector. That is, over 80% of the debts are related to miscellaneous expenses, not gambling”.
Migration to the illegal market
The ANJL reiterates that blaming the problem on gambling sites and blocking bettors on legal sites is a mistake. The ban on gambling opens up the illegal market to those who are unable to use licensed platforms.
According to Lemos Jorge, a gambler who may be in debt but still plays on a website authorised by the Ministry of Finance will not stop gambling.
Studies indicate that gambling accounts for only 0.46% of household spending and cannot be linked to debt, according to Lemos Jorge. “Unfortunately, this has been a widespread narrative in the context of an election year, and it has been further reinforced by certain sectors of the economy, such as retail. It is widely agreed that easy access to extremely expensive credit, coupled with one of the highest interest rates in the world, has been one of the main drivers of household debt,” he said.
“If someone has BRL10,000 ($2,000) in credit card debt and another BRL5,000 in overdrafts, the problem isn’t the average monthly spending of BRL50 on gambling, which is a form of leisure. It’s the snowballing interest they pay to financial institutions,” he commented.
Blocking illegal websites
In his view, the main challenge facing the regulatory authorities, namely the Secretariat of Prizes and Bets (SPA) and Anatel (the Brazilian National Telecommunications Agency), which is responsible for blocking illegal websites, is to combat clandestine platforms. “This collaborative effort has been carried out successfully.” To give you an idea, as of April of this year, 39,000 websites had been blocked. The problem is that they replicate, and at a very fast speed. “In some cases, after being taken down, an illegal betting platform manages to come back online just hours later,” he noted, emphasizing that the ban on betting opens up the illegal market to beneficiaries of the Novo Desenrola Brasil programme.
In this context, both the government and the industry, including ANJL, have been working to find an effective solution to this problem, according to Lemos Jorge.
When asked about the reasons for the widespread dissemination of false information about the sector, Lemos Jorge said there are numerous factors contributing to this. “Unfortunately, one of them is the fact that the country experienced a four-year regulatory vacuum, during which practices harmful to players became widespread.
“Another factor is a behind-the-scenes power struggle involving sectors of the economy that have lost ground, for example, in the advertising market.” He added that this is compounded by the media’s tendency to focus on cases of gamblers who have lost large sums of money, without, however, verifying whether these incidents occurred on legal or illegal platforms.
“And, more recently, there is undoubtedly also the electoral factor, which will carry significant weight through October.”
Bets: the scapegoat during the election process
According to Lemos Jorge, the industry has no doubt that betting companies will continue to face heavy criticism during the election process. “Brazil has a number of problems to solve, most of which are historical, but aren’t limited to one government or another. But in this campaign, gambling is being made the scapegoat for all of them,” he admitted.
According to him, the role of ANJL, as the industry’s representative, is to refute false information and show the public that the industry provides entertainment services just like any other. “And, of course, we must continue to emphasise the importance of gambling responsibly, without going overboard, and view gambling as a form of entertainment, not as a way to make money,” he said.
Regarding the recent data released by the CNC (the Brazilian National Trade Confederation), indicating that gambling companies withdrew nearly BRL144 billion from the market, Lemos Jorge says he has no idea where that figure came from and that it makes no sense at all.
“These figures are out of touch with market realities. We also do not know the real intentions behind this data. Just as we respect all sectors, including commerce, industry, the service sector, and so on, it is only natural that we expect to be treated with the same respect. That has not been the case with these indiscriminate reports, which contain biased information or lack factual basis,” he said.
President Lula’s change of course
In his speech following the signing of the Provisional Measure establishing the Novo Desenrola Brasil programme, President Lula did not attack the gambling companies, as he had been doing. According to Lemos Jorge, in recent days, the ANJL has stepped up its dialogue with the government, both with the Presidential Office and the Ministry of Finance, using data to demonstrate that the narrative promoted by polls does not hold up.
“I believe this played a major role in President Lula’s decision to change course. Data from several reputable institutions, such as Pay4Fun and LCA Consultoria, show that spending on gambling accounts for a tiny fraction of Brazilians’ budgets. At the same time, the industry’s contribution to the country’s tax revenue has been essential for the government, which needs these funds that have gone uncollected for so many years. Not to mention the jobs and revenue that companies that have successfully established themselves in Brazil are generating. That is, there are several positive impacts on the economy, but this is rarely mentioned.”
In his view, it is important not only to provide the market with accurate information but also to demonstrate this to the government. “ANJL has done this through the press, social media, lectures. We are in constant communication with the government. “But we know that those opposed to the industry will continue to spread whatever information, or rather, misinformation, they see fit.
“Our role is to tackle this situation head-on, through a variety of initiatives. One thing is certain: Brazil cannot backtrack on the regulations it has worked so hard to put in place. Today, we have one of the most stringent regulatory frameworks in the world, whose main objective is to protect bettors and combat the illegal market. Dismantling the regulated industry would be tantamount to throwing the Brazilian population into the hands of illegal platforms, which have no commitment to players or to their mental and financial well-being,” he concluded.
Original article: https://igamingbusiness.com/sports-betting/gambling-ban-fuels-illegal-market-brazil-anjl/
