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Brazil Moves to Block Welfare Funds from Gambling Use

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Brazil struggles to prohibit the use of social payments for gambling due to a lack of regulatory procedures.

Following in the footsteps of countries and gambling hotspots such as France, Turkey, Singapore, Hong Kong, and Macau, Brazil began 2025 by stepping up its efforts to combat unlicensed gaming companies.

The Central Bank (BCB) of South America’s largest country recently admitted that stopping welfare payments from being utilized for gaming presents considerable technical hurdles.  

INSS Wants BCB’s Help

On Monday, the National Institute of Social Security (INSS) formally asked the BCB’s aid in establishing a strategy to prevent social benefit users from using their cash for betting.

The critical request was started by INSS president Alessandro Stefanutto, who emphasized the need for a greater understanding of how assistance money are spent.

Stefanutto is presently overseeing an investigation into the Brazil Bets market to determine whether social funds are being exploited or contributing to gambling-related issues.

However, tracing individual transactions has proven challenging due to system restrictions. 


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Bolsa Familia Funds Spent on Gambling in 2024: BRL 3 billion ($504 million)

Last year, an estimated BRL 3 billion ($504 million) of Bolsa Família funds were spent on gaming sites, raising concerns (source: BCB study).

Bolsa Família, founded in 2004 by President Luiz Inácio Lula da Silva, serves around three million families and provides financial assistance to Brazil’s poorest.

This program is now under review as the government attempts to prevent the exploitation of its funding.

According to SBC Noticias Brazil and Folha de São Paulo, pinpointing the source of welfare contributions in recipients’ bank accounts is simple.  

However, if the funds are combined with other personal finances, it is impossible to determine their purpose.

Furthermore, under present regulations, funds placed into a beneficiary’s account become personal property, rendering the government impotent to impose spending limits. 

Core Priority in the Constantly Growing Market

President Lula’s administration prioritizes protecting Bolsa Família revenues from misuse as Brazil’s licensed gambling business grows.

The INSS has identified a few weaknesses in monitoring spending and will continue to evaluate present procedures.

In related developments, the Senate has established a Commission of Inquiry (CPI) to investigate the economic dangers posed by the betting sector.

Senator Soraya Thronicke will lead the CPI in reviewing the financial transactions of the 68 operators regulated by the Secretariat of Prizes and Bets (SPA).  

Thronicke has stated that the commission plans to regulate or prohibit gaming for Bolsa Família beneficiaries. Results are expected in the first part of the year.

Meanwhile, Brazil’s President has maintained the idea that operators who do not satisfy standard regulatory criteria or economic duties risk being barred from the market.

Regis Dudena, the head of the SPA, expressed worry last week about a planned selective tax aimed at detrimental industries such as gaming. 

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Oscar Alder
Oscar Alder
A newcomer to the iGaming industry, eager to learn and grow in the world of online gaming. Though just starting out, he brings fresh perspectives, enthusiasm, and a strong desire to understand the ins and outs of the industry.

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