Brazil mulls how to stop use of welfare payments for gambling
The government seeks solutions amid technical challenges in preventing use of benefits.
Brazil.- The government of Brazil is trying to work out a way to prevent the use of social benefits payments for gambling after the Central Bank noted that there was currently no way to intervene. At the moment, welfare funds are transferred to the recipient’s bank account and the government has no way to control what the money is used for.
There has been controversy about the issue since before the regulated online gambling launched in Brazil this month. President Lula da Silva met with senior ministers to discuss the matter back in October after a report last year estimated that BRL 3bn (€500m) of welfare funds had been spent on betting.
Alessandro Stefanutto, president of the National Institute of Social Security (INSS), has asked the Central Bank to analyse the extent of the issue and to develop a strategy to prevent welfare funds from being used for gambling. However, the Central Bank noted that there was no way to distinguish welfare funds from a recipient’s other funds in their account.
Some three million people receive welfare payments via the Bolsa Familia programme, which was founded by current Lula da Silva in 2004 in his first term in office. Some countries have circumvented the issue of welfare payments being used for gambling by legislating to ban all recipients from gambling, but, for the moment, it seems Brazil seeks to avoid that more drastic option.
Brazil’s new regulated gambling market will begin on January 1. The new gambling regulator, the SPA, approved 71 operators for Brazilian online gambling licences ahead of the launch. Subsequently, operators previously licensed by Loterj, Rio de Janeiro’s state lottery, were told to stop taking bets outside of the state after Federal Supreme Court minister André Mendonca issued a preliminary injunction as part of a long-running dispute with the federal government over Rio’s right to issue nationwide licences.
Meanwhile, the Brazilian gaming and lottery industry association, ANJL, has called for more action against illegal gambling. Despite a spate of blocking orders against illegal sites from the telecoms watchdog Anatel, the ANJL warns that more than 2,000 illegal gambling sites are still operating in Brazil.
