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Brazil Proposes Online Betting Ban Over Mental Health and Financial Risks

Latest-bill-calls-for-online-betting-ban-in-BrazilA new bill aimed at banning online sports betting across Brazil has been introduced by Senator Sérgio Petecão, reflecting growing concerns over the impact of virtual gambling on mental health and financial stability. The bill, officially named Bill 4.031/2024, was submitted to the Brazilian Senate on October 21, 2024, and seeks to halt the rapidly growing online betting market just months before it is set to be fully regulated and legalized.

Concerns Over Mental Health and Financial Debt

Senator Petecão’s primary concern is the toll that online betting can take on the mental well-being of bettors, as well as the financial burden it places on families. The senator argues that online betting platforms are accessible 24 hours a day, creating a heightened risk for addiction and compulsive gambling behaviors. According to Petecão, “The platforms of online betting are available 24 hours a day, creating a false sense of easy winnings and leading many people to addiction. This compromises their own lives, their relationships, and their finances.”

The proposal comes in response to growing evidence that many Brazilians are falling into significant financial debt due to online betting. One controversial study, despite its small sample size, received widespread attention for suggesting that some bettors were using money meant for food and medicine to gamble. These findings have fueled public debate about the potential dangers of expanding the online betting market.

Bill Calls for an Immediate Halt

The new bill requests that the law enabling online betting in Brazil, signed earlier this year, be amended within 60 days to prohibit virtual gambling. While in-person betting at physical venues would still be allowed, with bettors required to purchase printed tickets, the bill suggests that online betting is a far more dangerous practice due to its round-the-clock availability and the anonymity it offers players. Petecão’s argument hinges on the belief that retail betting carries fewer risks of addiction compared to its online counterpart.

The senator’s proposal arrives as the Brazilian government prepares to launch its licensed online betting market in January 2025. As preparations continue, various other lawmakers and public figures have expressed similar concerns, particularly regarding the potential impact on vulnerable populations, including the elderly and those dependent on social benefits.

Government Response and Lula’s Position

President Luiz Inácio Lula da Silva is expected to address these concerns and clarify the government’s stance on the matter before the scheduled launch of the regulated betting market. In response to calls for more restrictive measures, Lula has already signed Bill 3.626/2023, which legalized online betting. However, the latest developments and concerns may prompt further action. Less severe proposals, such as spending limits for vulnerable groups and an accelerated ban on using credit cards for betting, are also being discussed.

In addition to Petecão’s bill, the Brazilian government has already been actively working to curb illegal betting through its Secretariat of Prizes and Bets (SPA). This regulatory body recently blocked over 2,000 unlicensed betting sites operating in Brazil. The SPA has also focused on ensuring that licensed operators meet strict requirements, including providing safeguards to protect players from gambling addiction and unethical practices.

Opposition from the Betting Industry

While the proposed ban has garnered attention, it faces strong opposition from within the betting industry. Licensed operators argue that a ban would only drive more bettors to illegal sites, undermining the government’s efforts to control the market. Moreover, with the launch of the legal market so close, many in the industry worry that these drastic measures could stall progress and hinder the development of a regulated, safer betting environment.

Supporters of the legal betting market point to ongoing efforts to protect consumers, such as advertising restrictions and player protection mechanisms, as steps in the right direction. Advocates for legalization believe that a regulated market will reduce harm by providing proper oversight and tools to manage problem gambling.

Impact on Bolsa Família and Social Benefits

The controversy surrounding online betting extends beyond the Senate, as data from Brazil’s Central Bank reveals that some recipients of Bolsa Família, the government’s flagship social welfare program, have been using their benefits to place bets online. This revelation has led to discussions about imposing stricter regulations on how Bolsa Família funds can be spent. Senator Cleitinho has introduced a separate bill that would limit the use of these funds to specific purchases, ensuring that they are used for necessities like food and healthcare rather than gambling.

As the Brazilian government continues to debate these issues, the outcome will shape the future of the country’s betting industry. Whether Petecão’s bill leads to an outright ban or simply encourages further regulation remains to be seen. Either way, Brazil is facing a critical decision about balancing economic interests, public health, and consumer protection in the burgeoning online gambling market.

Source:

“Bill to Ban Online Sports Betting Proposed in Brazil“, igamingbusiness.com, October 23, 2024.

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France Proposes Legalization of Online Casinos to Tackle Budget Deficit

Legalising-online-casinos-France-places-a-bet-on-solving-budget-woesThe French government is moving toward legalizing online casino games in a bold move aimed at bolstering its state finances and curbing illegal gambling. The proposed amendment, part of the 2025 draft budget, suggests introducing a 55.6% tax on online casino turnover, potentially generating significant revenue for the country.

Addressing France’s Budget Deficit

France’s growing deficit has become a major concern for the government. In 2023, the deficit reached 5.5% of GDP, well above the EU’s target of 3%. The situation could worsen, with 2024 figures expected to exceed 6%. Finance Minister Antoine Armand emphasized that legalizing online casinos could help combat the deficit by contributing valuable tax revenue to the national budget. “Those that exist, which are sometimes operating illegally, must either be closed or regulated or have to contribute,” Armand said in a recent television interview .

The country’s current legal gambling sector generated approximately €13 billion in 2022, according to a PricewaterhouseCoopers report. However, an estimated €748 million to €1.5 billion of gross gaming revenue comes from illegal online casino sites, which the government is hoping to bring under control through regulation .

Fighting Illegal Gambling and Public Health Risks

Legalizing online casinos would not only bring in much-needed revenue but also address the growing problem of illegal gambling. France’s gaming watchdog, l’Autorité nationale des jeux (ANJ), has highlighted the risks posed by unregulated sites, which often operate from tax havens. These illegal platforms expose French citizens to gambling without proper consumer protections, exacerbating addiction risks.

By legalizing and regulating online casino games, the government aims to create a safer gambling environment. Proponents of the law argue that regulation would provide tools to mitigate the public health impacts of problem gambling. This includes measures to protect vulnerable players, which would be implemented in coordination with ANJ and other relevant authorities.

Concerns from Land-Based Casinos

Despite the government’s optimism, the proposal has drawn criticism from the country’s physical casinos. Grégory Rabuel, president of the Casinos de France union, expressed concern about the impact on traditional establishments, warning that legalizing online casinos could result in a 20-30% decline in revenue for land-based casinos. Rabuel also predicted that around 30% of these venues could close, leading to the loss of approximately 15,000 jobs.

In a statement to Les Echos, Rabuel stressed that if online casinos are legalized, they should only operate in partnership with physical casinos to ensure that local businesses and jobs are protected. He called for a cautious approach to prevent weakening France’s existing network of more than 200 land-based casinos .

Moving in Line with EU Neighbors

France and Cyprus remain the only EU member states where online casinos are entirely banned. The French government has pointed out that the new amendment is designed to align France’s regulations with those of its European neighbors. This would bring the country closer to the broader EU trend of regulated online gambling .

Prime Minister Michel Barnier’s administration, which has been keen to address the fiscal challenges facing France, sees the legalization of online casinos as part of a broader strategy to modernize the gaming framework. The move would place France in a stronger position compared to other EU markets, enhancing both its revenue collection and regulatory oversight.

Balancing Revenue and Risk

While there are strong arguments for the potential financial benefits of legalizing online casinos, industry experts warn that this change alone may not entirely eliminate illegal gambling. Elsa Trochet-Macé, a spokesperson for ANJ, pointed out that even with regulation, illegal operators might continue to appeal to a portion of the gambling market, particularly those drawn to riskier or less regulated options. As a result, a careful balance must be struck between generating revenue and ensuring the effectiveness of regulatory efforts.

If passed, the amendment is expected to take effect in 2025, with the hope that it will provide France with a fresh source of tax income while mitigating the risks of unregulated online gambling. Advocates of the measure are confident that it will help address France’s fiscal woes while simultaneously creating a safer environment for online gambling enthusiasts.

Source:

“Legalising Online Casinos: France Places a Bet on Solving Budget Woes“, euronews.com, October 23, 2024.

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UK Gambling Commission Prepares First Study to Combat Online Black Market

Gambling-Commission-embarks-on-black-market-study-to-improve-monitoringIn a bid to clamp down on illegal online gambling, the UK Gambling Commission (UKGC) is set to release its first comprehensive study of the UK’s black market. Scheduled for publication in spring 2025, the study aims to provide the UKGC with data-driven insights into the scale of unlicensed gambling and inform its strategies for disrupting illegal operations.

The research will investigate consumer motivations, focusing on why individuals access unlicensed gambling websites. By collecting and analyzing web traffic data and player behavior, the UKGC hopes to estimate the financial impact of the black market, particularly in terms of gross gambling yield (GGY). This data will enable the regulator to better monitor and combat illegal activities, ensuring that the licensed market is protected and consumers are safeguarded from harmful practices.

How the UKGC is Measuring the Impact of the Black Market

To estimate the size of the black market, the UKGC is employing a mix of web traffic analytics and player spending data.

The regulator has collected information from over 139,000 gambling accountsacross seven UK operators between 2018 and 2019, using this data to estimate that the GGY for online slot machines on unlicensed sites is approximately £0.32 per minute. However, this approach has its limitations, particularly when it comes to other forms of gambling like sports betting, which may involve higher spending but are not accounted for in the current model.

The UKGC is also monitoring specific search terms that are likely to be used by consumers seeking unlicensed gambling platforms. By tracking popular queries via Google Trends and Similarweb, the Commission identifies search results that lead to unlicensed sites. Web traffic from these sites is then analyzed, providing insights into the behavior of UK consumers on illegal platforms.

International Comparisons and Challenges

The UKGC’s efforts align with similar studies conducted by other European regulators, such as the Netherlands and Sweden, where data has shown that consumers often spend more on unlicensed platforms than on regulated sites. This insight is reflected in the UKGC’s methodology, which acknowledges that spending habits on unlicensed sites may differ from those on licensed ones.

In a note about the study, the UKGC said, “With a better understanding of why and how consumers access unlicensed gambling websites, we can identify ways in which we can use data to identify unlicensed websites and make estimates of their usage by GB consumers.” This approach will help the Commission create more effective strategies for monitoring and disrupting the black market.

CEO Andrew Rhodes emphasized the social and economic risks posed by the black market. “The illegal market is bad from a human point of view – as it poses a risk to consumers, especially the vulnerable. It is also unlikely to operate in a way that is fair or safe. It is also a concern from an economic point of view – as it pays no tax and undercuts legitimate business,” he stated. Rhodes further highlighted the role that data analytics will play in addressing these challenges.

Future Research: Social Media and Encrypted Messaging

Looking ahead, the UKGC plans to expand its research to examine the role that social media platforms and encrypted messaging apps play in facilitating unlicensed gambling. Services such as WhatsApp, Telegram, Twitch, and Kick are increasingly being used to promote gambling content, and the Commission is eager to understand how these platforms drive traffic to unlicensed operators.

Over the past year, the UKGC has ramped up its efforts to combat the black market, issuing more than 750 cease-and-desist orders and removing 50,000 URLs from search engine results. The findings from the study, to be published in 2025, will guide the next phase of the UKGC’s strategy to combat illegal online gambling and protect consumers.

Source:

“Unlicensed Gambling Using Data to Identify Unlicensed Operators and Estimate“, gamblingcommission.gov.uk, October 21, 2024.

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Brazil Contemplates Ban on Online Sports Betting Over Addiction and Financial Strain

Brazil-considers-ban-on-online-sports-bettingBrazilian President Luiz Inácio Lula da Silva is contemplating an outright ban on online sports betting if the government’s recent regulatory efforts fail to address the growing issue of gambling addiction in the country. Since the legalization of online sports betting in 2018, there has been a dramatic surge in betting activity, raising concerns about the negative financial and social impacts on Brazilian households.

Worsening Socio-Economic Impact

Recent studies have revealed troubling trends linked to the rapid rise in online betting. Many Brazilian families are suffering financially due to an increased tendency to gamble, often using money intended for essential purchases. A significant portion of household income is reportedly being diverted to gambling, contributing to permanent debt and family bankruptcies. One study commissioned by a Brazilian retailers’ association found that 63% of online betting platform users experienced income declines, and 23% of those surveyed admitted to prioritizing gambling over purchasing necessities like clothing.

President Lula expressed particular concern for low-income families receiving social assistance through Brazil’s Bolsa Família program. Addressing the issue after casting his vote in São Paulo’s municipal elections, Lula stated, “Everyone knows that the person going to buy bread in the morning will make a small bet using the bread money.” He emphasized the importance of regulating the industry to prevent vulnerable populations from falling further into financial hardship. Lula added that, if the new regulations are insufficient in curbing the addiction, he “won’t hesitate in putting an end to [betting]

definitively.”

Stricter Regulations Underway

To address these growing concerns, the Brazilian government has introduced a set of regulations aimed at tightening control over the online sports betting market. The new rules mandate that international betting companies operating in Brazil must obtain local licenses, establish corporate offices, and provide customer support specifically for Brazilian users. Additionally, measures are being implemented to prevent money laundering, and credit card usage for betting will be prohibited under these guidelines, which are set to take effect by the end of the year.

Brazil’s Secretariat of Prizes and Bets (SPA) has already published a list of licensed operators, which includes some of the biggest names in the betting industry, such as Flutter Entertainment, Entain Group, and Betsson. These companies must now comply with local regulations, including partnering with Brazilian entities and adhering to strict financial and operational requirements. Hundreds of other companies have been denied licenses for failing to meet the necessary conditions.

Despite these new regulations, concerns about gambling addiction persist. In August alone, Brazil’s central bank reported that recipients of Bolsa Família spent over R$3 billion ($550 million) on bets, raising alarms about the impact on vulnerable communities. Lula’s government recently held a cabinet meeting to discuss whether to ban Bolsa Família beneficiaries from participating in betting activities, although no decision has yet been made.

Further Investigations and Potential Ban

As Brazil grapples with the consequences of its booming online gambling market, a separate parliamentary inquiry has been launched to examine the links between online gambling and criminal organizations. The inquiry, led by Senator Soraya Thronicke of the Podemos Party, aims to investigate potential money laundering activities and other illegal practices connected to online betting. Thronicke, addressing the gravity of the issue, noted, “There is no point in closing our eyes to this problem. It is a fact. It is one of the main reasons for attacks on life and separations.”

In recent months, Brazilian authorities have ramped up efforts to clamp down on illegal betting activities. As part of Operation Integration, a major money laundering crackdown, popular online influencer Deolane Bezerra was arrested in September for her involvement in promoting illegal online gambling activities. The inquiry will delve deeper into these connections, examining how criminal organizations may be exploiting the growing online gambling market.

Senator Dr. Hiran Gonçalves, another key figure in the inquiry, raised concerns about the lack of oversight in online betting transactions, especially with the use of cryptocurrencies and offshore operators. He highlighted the need for a robust inquiry to provide the Brazilian public with answers and ensure that the country’s financial system is not being compromised by unchecked gambling activities.

A Complex Balancing Act

Brazil is now at a crossroads, trying to balance the economic benefits of its rapidly growing gambling industry with the need to protect its most vulnerable citizens. While banning online sports betting entirely may seem like an extreme measure, Lula has made it clear that if the current regulatory measures do not effectively curb the social and economic harms of gambling, more drastic action will be taken.

Lula also acknowledged that completely banning betting may drive it underground, as has been the case with illegal cockfighting and clandestine number betting, known as “jogo do bicho,” which has been prevalent in Brazil since the 19th century. “Brazilians will always find a way to gamble,” he remarked, emphasizing the importance of tackling the problem without pushing it into unregulated spaces.

As Brazil’s gambling market continues to evolve, the government’s efforts to regulate it will be closely monitored. With nearly 25 million new users joining betting platforms this year alone, the stakes are high. If regulation proves ineffective in combating addiction and the negative financial impacts, Lula’s administration has made it clear that a ban remains a viable option.

Source:

“Brazil’s Lula Says He Will Ban Sports Bets if Addiction Not Regulated”, reuters.com, October 6, 2024.

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New Online Gambling Deposit Rules in the Netherlands Starting October 2024

Online-deposit-limits-come-into-force-in-NetherlandsAs of October 1, 2024, Dutch online gamblers are subject to a new set of stringent deposit rules to promote responsible gambling. The measures are part of the Netherlands’ ongoing efforts to ensure player protection, particularly focusing on deposit limits and encouraging self-awareness among players about their gambling behavior.

The newly introduced rules include strict thresholds on monthly deposits, particularly limiting the net deposit amounts players can make. For adults, the limit is set at €700 per calendar month, while for young adults aged 18 to 25, this threshold is significantly lower at €300. Once a player reaches these limits, they are temporarily barred from making further deposits until the start of the next calendar month. These automatic resets aim to prevent overspending and reduce gambling-related risks.

New Rules on Setting Personal Deposit Limits

In addition to the mandatory deposit thresholds, the new regulations require that players set personal deposit limits when registering with an online casino. If a player attempts to set a limit higher than €350 per month (or €150 for young adults), they must engage in a mandatory contact moment with the operator. This interaction, conducted via phone or chat, serves to inform players about the risks of excessive gambling and to direct them to available resources for support, such as the national self-exclusion system, Crucks.

Players who exceed their deposit limits will also encounter pop-up notifications that provide real-time feedback on their gambling behavior. These messages, appearing every 30 minutes during gameplay, remind them how long they have been playing and indicate when they are halfway to their pre-set limit. The regulations are designed to raise awareness of responsible gaming practices and promote safer gambling experiences for all users.

For those who wish to increase their deposit limits beyond the established threshold, proof of financial stability is required. Players can share income statements with operators to verify their ability to manage higher spending limits, with a general guideline being that players can deposit up to 30% of their net income. However, this is not a mandatory process—players can wait until the start of the next month to reset their limits.

Industry Response and Impact on Operators

The Dutch gambling trade association, VNLOK, has voiced its support for the new measures, emphasizing their role in ensuring a safer gambling environment. “VNLOK members have already taken extra-legal measures to provide additional protection for players,” said VNLOK chair Helma Lodders, pointing to previous efforts such as the Online Gambling Advertising Code and stricter limits for young adults. According to Lodders, these measures align with VNLOK’s goal of maintaining a responsible and regulated market.

However, concerns have been raised by industry experts regarding the potential financial strain these regulations might place on operators. Gambling lawyer Alan Littler warned that the increased operational costs associated with implementing these rules, alongside the anticipated decline in consumer spending, could make it more challenging for companies to do business in the Dutch market.

Adding to this, the Dutch government has approved a series of tax hikes for gambling operators, with the gambling tax rate set to rise from 30.5% to 34.2% in 2025 and reaching 37.3% by January 2026. This additional financial burden, combined with tighter regulations, has raised fears that some players may turn to illegal gambling sites that do not adhere to such strict guidelines. VNLOK also acknowledged this concern, with Lodders stating, “Well-intentioned measures can thus have a counterproductive effect,” pointing out that over-regulation may lead to the unintended consequence of driving consumers to unlicensed platforms.

Future Regulatory Changes on the Horizon

Looking ahead, the current Dutch Remote Gambling Act is undergoing an evaluation by the country’s gaming regulator, Kansspelautoriteit (KSA), which is expected to conclude by the end of October. This review will assess the effectiveness of the existing laws and could lead to further amendments. Depending on the findings, additional regulatory changes may be introduced, raising concerns about their implications for both operators and players.

Meanwhile, several companies in the Netherlands gambling sector are developing solutions to help operators comply with these new rules. For example, I-Finance Services has introduced an Affordability Check tool to verify players’ income data, and Bluem launched its Budget Check system, which allows for income verification without giving casinos full access to players’ financial accounts. Trustly has also announced plans for a KYC solution to assist online casinos in adhering to the new regulations.

Source:
VNLOK, vnlok.nl, October 1, 2024.

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