Brazil's Balancing Act - Gambling Boom vs. Public Health Crisis
Over 3.5 million Brazilians began gambling every month in 2024. Current legislation targets a tax-raising bonanza, but fails to consider the dramatic health implications.
Written by Rafael Ávila, director of SOS Jogador, a Brazilian NGO fighting gambling addiction, and Francisco Silva, a researcher on iGaming at the University of Pontifical Catholic University of Minas Gerais.
After Brazil legalised sports betting in November 2018, its online betting sector operated essentially unregulated for close to six years.
In this time, the betting market flourished but created a parallel health crisis in terms of abuse and addiction.
This article was first published in Portuguese on The Conversation. It has been translated and republished with the consent of the authors, and has been slightly edited to fit a wider audience. The views expressed herein do not necessarily represent those of the Sports and Crime Briefing.
The 2018 law stipulated regulation should kick in within four years, but successive delays stalled this process. In January 2024, the regulated Brazil Bets market finally came into being, overseeing a colossal pool of gambling revenue, with up to 3.5 million new people starting to gamble in Brazil every month.
However, the scenario still presents considerable challenges.
Regulation focused on revenue
Brazil’s increased Internet penetration and the advancement of digital technologies has transformed the betting landscape, making it accessible 24 hours a day to anyone with a connected mobile phone or laptop.
Online platforms offer real-time betting, expanding possibilities with thousands of sporting events. Technological developments have also facilitated access to online casinos, featuring fast-paced, highly stimulating, and risky games that multiply the audience.
Brazil has already seen its own scandals related to these so-called “crash games,” such as the well-known yet illegal Jogo do Tigrinho (Fortune Tiger). These attract players by offering bets on multiplier lines that behave similarly to stock market charts. When placing a bet, the player sees the line rise and multiply their winnings rapidly until a moment of collapse, the “crash.” The concept is to wait until the last moment before the collapse to maximize gains or lose everything.
Studies from the University of Sydney’s Gambling Treatment & Research Clinic clearly show the ease of access offered by mobile devices dramatically increases the risks of such gambling practices.
Here, Brazil continues to face a significant regulatory gap. Technological advancement far outpaces the country’s capacity to implement effective public policy to mitigate gambling addiction.
For example, Brazil’s original 2018 legalisation only covered fixed-odds sports betting. But betting sites quickly expanded their operations to include online casinos, which now account for the majority of the sector’s revenue, fueled by intense digital advertising and partnerships with influencers. The COVID-19 pandemic only accelerated the demand for online gambling.
The federal government now faces the need to regulate an online betting sector that keeps growing and changing.
Betting companies have made massive investments in Brazilian football, representing over 64% of all sponsorships in the country’s three main leagues. Adverts dominate stadiums, social media, and television, roping in celebrities and athletes.
Before legalisation in 2018, around 500 online betting sites operated in Brazil with no regulation or taxation. But with legalisation, the market has become even more competitive. PLatforms offer bonuses, promotions, and reduced minimum deposits to attract new users. Simplified payment methods, such as Pix, have only further sped up deposit and withdrawal processes.
Around 25 million Brazilians placed their first online bets between January and July 2024. The number of available gambling sites exceeded 4,000, with the market growing 135% between 2022 and 2023. It is estimated that the sector moves more than $3.2 billion per month, without these amounts being properly taxed.
And a lack of regulation cuts both ways.
No public health regulation
Gambling addiction, or problem gambling, is classified as a mental disorders by the World Health Organization and in the latest edition of the Diagnostic and Statistical Manual of Mental Disorders (DSM-5).
It shares several characteristics with other addictions, such as substance dependence. Neuroimaging studies have revealed that the brains of people with gambling disorder show activation patterns similar to those observed in individuals with substance addictions, especially in areas related to impulse control and the reward system.
Compulsion and impulsivity are central aspects of this disorder, making it difficult to control finances and bets places, according to Terryan C. Clark from the Faculty of Health Sciences at the University of Auckland.
But the consequences go beyond mental health. Problem gambling carries a severe financial impact, with many compulsive gamblers accumulating considerable debts, losing assets, and facing family breakdowns, as well as suicidal ideation.
Brazil’s current regulation provides no effective prevention, support, and supervision structure to mitigate these impacts.
Reulating betting has been a priority since President Lula’s inauguration in 2023. However, this has been focused on increasing tax revenue from online casino games and fixed-odds sports betting.
The law did not incorporate a public health approach, allocating only a small portion of revenue to the Ministry of Health and failing to establish public policies aimed at preventing and treating problem gambling.
Regulation needs to do more
The responsibility has fallen to support groups, such as SOS Jogador and Gamblers Anonymous, which have proven effective in managing addiction.
Cognitive-Behavioral Therapy (CBT) has yielded significant results in helping individuals restructure dysfunctional thoughts about gambling and develop strategies to resist the urge to gamble.
However, an increasingly tolerant perception regarding online betting has made it difficult for users to recognize compulsive behaviors due to the intangible nature of the product and the lack of negative stereotypes traditionally linked to addiction.
To address the challenges of online betting, it is essential that the government adopt a public health approach that goes beyond simple individual responsibility. This includes implementing regulations that limit harmful commercial practices, such as misleading advertising that promote games as a source of alternative income rather than entertainment.
The recommendations are as follows:
Part of Brazil’s tax revenue from gambling should be directed to prevention and treatment programs, promote awareness about the risks of excessive gambling, and facilitate access to control and blocking tools.
Brazil has no mechanism that allows for people to simultaneously block access to all sites. Current self-exclusion tools are specific to each platform. This can generate a false sense of security, as bettors can easily access other platforms. Thus, although a user is excluded from one site, they still have access to hundreds of others, facilitating new losses.
Implementing a system similar to GAMSTOP, used in the United Kingdom, could prevent these problems more effectively.Education programs need to raise awareness about the risks of excessive gambling and the available help options. These programs should target ar risk-groups, including schoolchildren, young people, individuals with financial difficulties, and those with a history of impulsive behavior. These should not only highlight the dangers of gambling but demystify prejudices that prevent affected individuals from seeking support. Using respectful, encouraging, and non-stigmatizing language is essential to create an environment where everyone feels comfortable identifying themselves and seeking help when needed.
A national helpline should serve as a centralized resource for support and awareness, promoting a safer and more transparent betting environment.
These efforts do not need to take place in a vacuum. A robust supervisory structure should involve collaboration between betting sites, the government, and researchers to share data on gambling behaviors.