The National Association of Games and Lotteries (ANJL) and the Brazilian Institute of Responsible Gaming (IBJR) have urged their members to voluntarily implement a ban on the use of credit cards for betting transactions before the official regulatory deadline. This decision anticipates a regulation set to come into effect on January 1, 2025, which prohibits several payment methods, including credit cards, cryptocurrency, cash, payment slips, and checks, when Brazil’s legal online betting market goes live.
This preemptive move is particularly significant as the regulation will initially affect only those operators who have already applied for a license. These companies will be allowed to continue operating from October 1, 2024, until the full regulation comes into effect. Both associations emphasized the importance of reducing financial harm to bettors during the transition period.
IBJR Members Lead the Way
The IBJR, which claims to represent approximately 70% of Brazil’s betting market, announced that its members had unanimously agreed to expedite the credit card ban. The association sees this measure as a vital step toward fostering a safer betting environment in Brazil, ensuring that financial risks to consumers are minimized well before the official deadline.
The ANJL has also responded positively, stating that nearly all its members had already removed credit cards as a payment option. The move aligns with both associations’ broader objectives to promote responsible gambling.
In a LinkedIn post, the IBJR expressed its stance on the matter: “IBJR firmly believes that regulation is the most efficient and necessary way to face these challenges, ensuring the protection of consumers and the state.” The organization added that it is ready to work with the government to address concerns surrounding the betting sector and ensure its responsible development.
Impact on the Brazilian Betting Market
Despite the growing criticism surrounding Brazil’s betting industry, particularly regarding its social and economic consequences, the ANJL clarified that its decision to ban credit cards was not a reaction to this criticism. Instead, it acknowledged that the vast majority of bettors already prefer using instant payment methods, particularly Pix, over credit cards.
“This is not a response to criticism from other sectors,” the ANJL stated in an email to iGaming Business. “Card payment is almost non-existent in the industry already. We are reinforcing a practice that is already widely used by the operators themselves, which is to offer players Pix.”
Discrepancies in Credit Card Usage Data
While both the ANJL and IBJR claim that credit cards account for a minimal portion of gambling transactions—estimated at less than 3% and 0.5%, respectively—there is some debate about these figures. Central Bank president Roberto Campos Neto suggested that credit card usage might be higher, estimating that digital gambling transactions via credit could make up 10% to 15% of all bets.
Campos Neto did, however, acknowledge the challenges of accurately tracking these transactions, noting that digital wallets often obscure the original source of payment. This discrepancy highlights the complexities in monitoring financial activities within the rapidly expanding betting market in Brazil.
Addressing Criticism and Building a Safer Betting Environment
Recent data has fueled concerns about the financial impacts of betting in Brazil. A report by market research firm Hibou indicated that 10% of the population has experienced financial difficulties related to gambling, while Yield Sec data suggested that legal operators cover just 9% of the country’s total online betting market.
Moreover, a controversial study by the Brazilian Society of Retail and Consumption (SBVC) claimed that 23% of survey respondents were diverting money intended for essential expenses like clothing, food, and medication to gambling. In response, the ANJL defended its position by citing data from the Brazilian Institute of Geography and Statistics (IBGE), which reported a 1.3% rise in household consumption in Q2 of this year.
As the public and private sectors push for stronger regulations, the ANJL reiterated its dedication to ensuring a secure and responsible betting market. The IBJR has also expressed its commitment to collaborating with government agencies to mitigate the potential harms of betting.
In conclusion, the voluntary decision by Brazil’s betting associations to accelerate the credit card ban demonstrates their proactive approach to meeting the upcoming regulatory standards. This move reflects a growing awareness within the industry of the importance of protecting vulnerable bettors and promoting responsible gambling practices. As the January 2025 deadline approaches, all eyes will be on the impact of these changes on Brazil’s rapidly evolving betting market.
Source:
“Associação de Bets Diz Que Já Vai Banir Cartão de Crédito Para Apostas.” CNN Brasil, September 26, 2024.