Brazil: Caixa's betting platform could be permanently scrapped

Brazil's President, Lula da Silva, has ordered the suspension of a Government-backed betting platform set to be launched by Caixa Econômica Federal.

Caixa is one of Brazil's largest state-owned banks, responsible for managing social programs, housing loans and national lotteries.

Sources close to the matter suggest the project could ultimately be cancelled.

Lula reportedly became aware of Caixa's initiative while travelling through Asia and expressed dissatisfaction to aides, describing the move as politically tone-deaf amid the Government's current efforts to tighten regulations and increase taxes on betting operators.

Upon returning to Brazil, the president met with Caixa's CEO, Carlos Vieira, to discuss the matter, which caused the project to be delayed.

Finance Minister Fernando Haddad is said to have opposed the launch from the start, citing fiscal and reputational concerns for the state-owned bank.

The state-owned bank had already paid around BR30m ($5.6m) for its operational license and argued that its entry into the market could reclaim part of the revenue currently flowing to unlicensed foreign sites.

However, senior officials pointed out that launching a Caixa-branded betting platform would contradict the Government's broader crackdown on excessive gambling in the country and its campaign to raise the taxes on operators.

Besides the President and the Finance Minister, a Senator has also criticized the launch of the platform, saying it's a "moral and social setback".

Lula has previously warned that if regulation fails to prevent gambling addiction and illegal activity, his administration may reconsider allowing the activity altogether, a stance that is now reflected in the suspension of Caixa's operations.