Brazil’s Banking Federation Urges Faster Credit Card Ban for Betting
The Brazilian Federation of Banks (Febraban) is pushing for the government to speed up the planned ban on using credit cards for betting, raising alarms about financial risks.
Urging Government Action
Isaac Sidney, President of Febraban, voiced concern in an interview with Folha De S.Paulo about the growing use of credit cards for betting. He warned of the potential consequences, including rising debt and the impact on family incomes.
While Brazil prepares to regulate its betting and gaming market under legislation introduced by President Luiz Inácio Lula da Silva, the scheduled start date for these regulations is January 1, 2025. This legal framework will prohibit the use of credit cards for fixed-rate betting, covering sports and online gaming.
Financial Risks Are Growing
Sidney stressed the urgency of early enforcement, stating, “We are very concerned about how much this could compromise family income and increase defaults, potentially raising the cost of credit.” His concerns are not isolated. The Central Bank reported a 7.39% delinquency rate for credit cardholders in July, reflecting a consistent financial strain on Brazilians.
Widespread Betting Culture
Betting is a growing trend in Brazil. A Datafolha survey revealed that 15% of Brazilians either place or have placed sports bets online. Among them, the average monthly spending is R$263, which equals nearly 20% of the 2023 minimum wage. Alarmingly, three out of ten bettors spend over R$100 monthly, and one-third of them are already in debt, holding two or more credit cards.
The potential for financial harm is clear. Many countries have already taken steps to mitigate such risks. The UK banned credit card payments for gambling in 2020 to prevent debt accumulation, while Australia has also enforced restrictions to promote responsible gambling practices.
Learning From Global Examples
Other countries’ experiences highlight the importance of early action. In the UK, the ban on credit card use for gambling has proven effective in reducing gambling-related debt. Likewise, Australia has implemented similar restrictions to protect consumers from financial harm.
As Brazil’s betting market prepares for regulation, the urgency to enforce these credit card bans earlier could be a crucial step in safeguarding citizens from escalating debt.