The President of Brazil publicly criticized the online gaming industry and the erosion of football and advertising as a social risk.
The President of Brazil, Luiz Inácio Lula da Silva, has recently publicly accused the online lottery of the social risks that the rapid expansion of the industry in football, the media and social life is posing and contributing to the spread of corruption. In her speech, Lula made it clear that she supported the involvement of the Central Bank of Brazil in the monitoring of the online lottery website.
In the presentation, Lula compared the current online sports gaming platform with traditional casinos. He noted that, despite Brazil’s long-standing ban on casinos, the gaming platform “reached thousands of households” through online channels. “For a long time, we have said that casinos are prohibited, because games that profit from so-called luck only make the poor poorer, which should not exist. Now, these gaming platforms are obeisance to our home.” Lula stressed that the “over-infiltration” of gaming companies, which were penetrating many areas of society, from sports events to advertising and to social activities, was a cause for concern. While he did not mention specific cases of corruption in his speech, he pointed to the systemic risks posed by the online lottery industry. “As a result of the plethora of platforms, a 10-year-old child can participate through his father’s mobile phone. Online games are eroding football, occupying advertising and even contributing to corruption. The Central Bank is working to regulate, at least to enable these operators to pay taxes in accordance with the law.” Lula linked the rapid expansion of the industry to broader social issues, including the access of minors to gaming services and excessive exposure of related brands to mainstream media. He also accused operators of lobbying against increased tax revenues in the industry and described such resistance as part of a broader corruption issue related to the economic impact of the industry. Lottery brands have become the main sponsors of Brazilian football, and the exposure of lottery companies in the top leagues has increased significantly over the past year. The number of lottery company signs appearing on the club’s shirt reportedly increased by 125 per cent. For the Brazilian Government, the proliferation of sponsors shows that the industry is deeply integrated into Brazilian football. As the most popular movement in Brazil and worldwide, football continues to play an important role as a major marketing channel for online gaming platforms, whether sponsored by jerseys or broadcast on television.
In recent years, the Brazilian Government has introduced a formal licensing system for online lottery and game operators, aimed at strengthening federal regulation, regulating market order and increasing tax revenues. Dozens of companies have been authorized by the Brazilian Government to operate, and at least 25 others are awaiting approval from the Secretariat for Awards and Lottery under the Ministry of Finance. The new regulatory system also emphasizes financial regulation to prevent money-laundering and fraud. Lula reiterated that the Central Bank would continue to ensure that compliance platforms paid taxes in accordance with the law. However, industry experts noted that the direct supervision of the gaming website remains the responsibility of the Award and Lottery Secretariat, while the central bank ‘ s responsibilities are focused on the regulation of the financial system, the implementation of monetary policy and the maintenance of monetary stability. The Brazilian Government is considering the issue of online lottery as a cross-cutting issue between social governance and financial regulation, and may in the future promote closer cross-sectoral regulatory mechanisms.
