Brazil: Is an online gambling ban realistic – and how might it look?

Brazil’s betting market is barely out of the nursery and already facing the possibility of being sent to the naughty corner. 

The Government of President Lula da Silva is preparing a measure that could significantly tighten the rules for betting operators, with the possibility of banning certain products, including online casinos and games.  

Lula himself has gone even further, saying on several occasions that he would personally end sports betting altogether. He is not the only politician in Brazil to have said similar...

Of course, the constant threats of restriction have become so repetitive in recent months that they are tempting to ignore completely.

This week, however, reports throughout Brazil say new measures are imminent. So if Brazil really is heading for another regulatory shake-up, what could it actually look like? 

A total betting ban? That’s a hard sell 

A complete ban would certainly be the most drastic option – but it also seems the least practical. 

Brazil’s regulated betting market may be young but Brazilians are no longer strangers to betting. Consumers already know the brands, the apps and the products. Take the legal market away overnight and, without question, it would not stop gambling overnight. It would simply mean bettors start looking elsewhere. 

The Government itself has been increasingly focused on tackling the illegal market, pushing consumers back towards unregulated websites would rather defeat the point. A regulated operator can be supervised, taxed and held accountable. An offshore website operating outside Brazil’s rules is considerably harder to deal with. 

So, rather than throwing the entire industry out of the window, the more interesting question is what Brazil could decide it does not want people betting on. 

Online casinos could be an obvious target, particularly given the political attention around products. Certain betting markets or types of games could also face restrictions if the Government decides they carry greater risk than others. That is where things get particularly interesting. 

007: Could Brazilians be given a license to bet?

One suggestion that has been circulating among Brazilians online is Bond-level bureaucracy: a license to gamble. 

The basic idea is simple: if you want to bet, you would need to obtain a free license or authorization first, potentially after completing a psychological assessment. 

This would be strange, revolutionary and potentially authoritarian. All in one. A walking juxtaposition.

But there would be a logic behind this. The question is whether someone who is legally old enough to gamble is also old enough to understand what gambling addiction can do.

There are sports and activities in Brazil that require licenses or evaluations before people can participate, and gambling could theoretically be treated as another activity where a basic assessment is considered worthwhile. 

The proposal would undoubtedly be criticized and, frankly, that criticism would become much stronger if people had to pay for the privilege of obtaining permission to gamble. 

If the Government went down this route, making the license free would be important. The point should be harm prevention, not creating another financial barrier, especially when the people most vulnerable to gambling-related problems may already be financially exposed. 

Overall, though, the idea seems far-fetched.

What else could Brazil restrict for bettors and gambling operators?

There are plenty of less dramatic options: Brazil could introduce (even more) taxes on betting activity, increase financial contributions towards gambling addiction prevention, impose tighter limits on deposits or losses, or restrict certain types of promotions and bonuses. 

Advertising could face even tougher rules, particularly around how operators can present gambling to younger audiences or portray betting as a normal part of everyday life. 

The Government could also strengthen affordability checks, require operators to intervene earlier when customers display potentially problematic behavior, or introduce more aggressive restrictions on accounts showing signs of excessive gambling. 

None of these measures would necessarily kill the regulated market. They would, though, make it considerably harder for operators to treat customer acquisition as the main objective. 

Who would be the real victims of any strict regulation? 

Our industry would almost certainly suggest any overt regulation spells the end of civilization as we know it. That is the by-now-automatic reaction.

Operators have obvious reasons to oppose anything that makes gambling less accessible. Fewer customers, fewer deposits and more restrictions are not exactly a dream scenario for any commercial business.

And in many cases, poorly thought-out regulation has made regulatory frameworks much, much weaker.

But there is an uncomfortable truth here many sadly ignore: operators are not always simply victims of gambling regulation. They are selling an entertainment product but – in simple economic turns – that product carries a social cost.

For these reasons, gambling's reputation has taken a hit across a range of mature markets.

The UK is a case in point. Many gambling policies considered unfavorable by operators are greeted by outright rejection and the tiresome message of "but what about the black market?" There, unfortunately, seems to be very little acknowldgement of what the regulated market could do better. And politicians have stopped listening because there is no willingness to compromise.

Brazil is a fascinating case study because of just how quickly operators advertised en masse and to the degree that they immediately utilized influencer marketing.

Any new Brazilian regulation should be fair and measured – of that there is no doubt. Whether it will, however, is the key question. And operators won't be blameless if this goes wrong.