TikTok is preparing for a potential loss of betting and online casino advertising revenue in Brazil.
This comes as the Government considers new restrictions ahead of the country’s first-round election on 4 October.
Social media platforms are awaiting a possible provisional measure (MP) that could restrict paid advertising from betting operators, including companies currently operating under the rules established by Brazil’s Ministry of Finance.
TikTok has not disclosed how much revenue it generates from advertising by licensed betting operators. The company did not respond when questioned by national new outlets regarding the potential restrictions.
TikTok’s position comes as Brazilian authorities continue to scrutinise how betting apps reach consumers, including concerns over age verification. GGI recently reported that Brazil questions Apple and Google over underage access to betting apps, as regulators examine how betting platforms can be accessed by under-18s.
The Government remains divided over how far the measure should go. President Luiz Inácio Lula da Silva and the Secretariat of Social Communication (Secom) reportedly support banning online betting, while the Ministry of Finance has raised concerns over the loss of around BR12bn ($2.3bn) in tax revenue.
Social media platforms and other market participants argue that a complete restriction of online betting could strengthen illegal operators, which do not pay taxes and cannot legally purchase advertising on social networks.
The potential restrictions come as Lula faces pressure from businesses, banks, industry groups and medical professionals supporting tougher measures, while football clubs have publicly opposed changes that could affect their betting sponsorship revenues.
The Government is expected to decide on the scope of any measure before the first round of voting.
If introduced through an MP, the restrictions would take immediate effect but could be subject to changes in Congress
