This move comes as concerns grow over the increasing use of credit cards for betting activities and their potential financial risks.
Brazil is preparing to launch a regulated betting and gaming market in 2024 under new legislation. The regulations, announced by the Ministry of Finance in April, will prohibit credit card use for fixed-rate betting, including sports betting and online games. Additionally, payments via cash, bank slips, checks, cryptocurrencies, and other methods that may obscure the source of funds will also be banned.
The Central Bank reported a credit card delinquency rate of 7.39% in July, slightly lower than the annual average of 7.71%. A Datafolha survey revealed that 15% of Brazilians engage in online sports betting, with an average monthly expenditure of USD 48.2, which is about 20% of the 2023 minimum wage. Among these bettors, 30% spend over USD 18.2 per month, and one-third are in debt and hold multiple credit cards.
Countries like the UK and Australia have already implemented similar bans to mitigate gambling-related financial risks. The UK introduced its ban in 2020, and Australia has imposed restrictions to prevent financial harm and promote responsible gambling.
The Brazilian government has embarked on a significant overhaul of its gambling regulations to address the growing concerns over unregulated betting practices. The new legislation, spearheaded by President Luiz Inácio Lula da Silva, aims to establish a comprehensive regulatory framework for gambling in Brazil. This initiative is part of a broader strategy to create a controlled and transparent market that curbs illegal activities and ensures consumer protection. By setting up a regulated betting environment, the government seeks to prevent financial exploitation and mitigate the risks associated with gambling, including debt accumulation and fraudulent practices.
The legislative framework encompasses a range of measures designed to bring betting operations under strict oversight. Key provisions include the ban on using credit cards for fixed-rate betting, which covers sports and online gaming. Additionally, the regulations will prohibit various payment methods that could obscure the source of funds, such as cash and cryptocurrencies. These steps are intended to add to the integrity of the betting market, protect consumers, and ensure that betting activities are conducted in a secure and regulated manner. The establishment of this market represents a significant shift from Brazil's previously fragmented and largely unregulated betting landscape.
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