The Brazilian Federation of Banks (Febraban) has called on the government to enforce the planned ban on using credit cards for betting sooner than initially scheduled.
Isaac Sidney, President of Febraban, expressed concern to the Brazilian publication Folha De S.Paulo about the increasing use of credit cards for betting, emphasising the potential risks this poses.
Brazil is set to launch a nationwide regulated betting and gaming market this year, under legislation introduced by President Luiz Inácio Lula da Silva. Regulations include a ban on the use of credit cards for fixed-rate betting, covering sports betting and online games.
This regulation, announced by the Ministry of Finance in April, also prohibits payments made in cash, bank slips, checks, cryptocurrencies, or other methods that could obscure the source of funds.
The new rule is set to take effect from the launch of the legal market on 1 January 2025. Until then, in the unregulated market, bettors can still use these soon-to-be-banned payment methods.
“We are very concerned about how much this could compromise family income and increase defaults, potentially raising the cost of credit,” Sidney told Folha journalists.
This concern is not unfounded. In July, the Central Bank reported that the delinquency rate for credit cardholders was 7.39%, slightly below the 7.71% average over the past year.
A Datafolha survey in January found that 15% of Brazilians either currently place or have placed sports bets online. Among those who bet, the average monthly expenditure is R$263 – about 20% of the 2023 minimum wage.
The survey also revealed that three out of 10 bettors spend more than R$100 per month. According to Instituto Locomotiva, one-third of these bettors are in debt and hold two or more credit cards.
Several countries have already implemented bans on using credit cards for betting, recognising the potential financial risks associated with this payment method.
In the UK, the ban on credit card payments for gambling was introduced in 2020 to protect consumers from accumulating gambling-related debt. Similarly, Australia has enforced restrictions on using credit cards for online gambling to prevent financial harm and promote responsible gambling practices.
However, preventing gambling harm is an ongoing effort, with payment methods playing a central role.
Last month, GamCare, which offers support services like a 24/7 helpline, raised concerns about the potential misuse of business accounts for gambling transactions. The charity urged banks to be mindful of the impact this could have on both businesses and self-employed individuals.
