Lula promises to take "very serious" measures to curb online gambling houses

São Paulo.- Brazilian President Luiz Inácio Lula da Silva vowed this Monday to take "very serious" measures to curb the expansion of online betting houses because, as he said, "they are taking the money from the poor people" of the country.

The president warned that casinos are now "inside people's homes" through cell phones, in an official act in the municipality of Mauá, in the metropolitan region of São Paulo, to announce public investments in education and health. "The casino is in your living rooms, in the palm of your 14-year-old children's hands, who take your cell phones and play, often spending money that they don't have," condemned the progressive leader during his intervention.

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"And we are going to take very serious measures against those 'bets' (online betting houses) because they are taking the money from the poor people of the country," he added. In a speech with a markedly electoral tone, Lula, who will run for re-election in October, said that he "learned to be against gambling" because the Catholic Church taught him, but that has now changed with the massive use of cell phones. Lula's government has already taken some measures to contain the increasingly widespread use of this type of betting in Brazil, whose advertising is clearly visible during the broadcast of sporting events on television.

Progressive Increase in Taxes on Digital Betting

In power since January 1, 2023, the Executive has promoted a bill, already approved by Parliament, to raise an income tax on digital betting houses, which will increase from the current 12% to 13% in 2026, 14% in 2027 and 15% in 2028. That specific tax is applied to the gross billing of betting companies and a portion of the revenue will be allocated to actions related to health and social security. The levy is added to others on the activity, which could end up bearing a total tax burden of around 40%, according to various estimates. The government also published last October a regulation through which it prevented beneficiaries of Bolsa Familia, Lula's flagship program that grants subsidies to families with fewer resources, and other social initiatives from placing online bets. Subsequently, Supreme Court Justice Luiz Fux limited the scope of that measure, at the request of the National Association of Games and Lotteries.

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It was planned that the high court would hold a conciliation hearing on the matter with all parties involved this Tuesday, but it was canceled due to scheduling reasons. Central Bank data showed that, in a single month, beneficiaries of the Bolsa Familia made transfers of up to 3 billion reais (about 580 million dollars / 485 million euros at today's exchange rate) to betting companies.