Published in April, Normative Ordinance No 615 banned the use of credit cards, crypto, cash, payment slips or cheques for betting when the legal Brazil online betting market goes live on 1 January 2025.
However only companies already active in Brazil that have applied for a betting licence will be able to continue operating from 1 October.
Both the ANJL and IBJR have urged their respective members to voluntarily bring forward the prohibition of credit cards after discussions with the Ministry of Finance. For the IBJR, which claims its members account for around 70% of the betting market in Brazil, the move is aligned with its wider objective to secure a safe betting market in the country.
Notably, the ANJL said almost all of its members have already removed credit cards as an option for bettors.
The credit ban will come into force from 1 January 2025, but the respective associations have raised concerns over the financial harms suffered by players betting with credit cards during the transition period between 1 October and 31 December.
“IBJR firmly believes that regulation is the most efficient and necessary way to face these challenges, ensuring the protection of consumers and the state,” the IBJR posted on Linkedin.
“As the leading industry association, we are fully prepared to contribute to solutions that address both government concerns and society’s demands.”
Growing criticism of Brazil’s betting sector
Pressure on Brazil’s gambling industry from government and private sector officials has been mounting of late, particuarly concerning the social and fiscal impacts of betting on vulnerable members of society.
Prior to the October deadline announcement, the president of the Brazilian Federation of Banks (Febraban) Isaac Sidney insisted the ban should come in earlier to protect players as soon as possible.
But the ANJL stressed that this mounting pressure wasn’t the reason it has advised its members to bring the ban forward,
It also explained the vast majority of bettors use instant payment provider Pix over credit cards.
“This is not a response to criticism from other sectors,” the ANJL said in an email shared with iGB. “Card payment is almost non-existent in the industry already.
“We are reinforcing a practice that is already widely used by the operators themselves, which is to offer players Pix. Even so, the ANJL understands that it is beneficial for all sides that credit cards are no longer an option once and for all.”
How popular is credit card use among Brazilian bettors?
There are disparaging beliefs over just how commonplace the use of credit is for gambling.
The ANJL estimates it is used for less than 3% of total bets made on its members’ platforms, while the IBJR claim credit accounts for approximately 0.5% of deposits.
On Thursday (26 September), however, Central Bank president Roberto Campos Neto maintained payments for digital gambling using credit were responsible for 10-15% of total transactions.
Campos Neto is unsure of the percentage, however, saying in quotes shared with Folha: “Sometimes you can do a credit card transaction with a digital wallet. And the digital wallet performs the transaction and the credit card issuer cannot see what purchase is being made.
“Looking only at the credit card channel, we cannot always be sure that that credit channel, that card, was not used to purchase that item.”
How are the ANJL and IBJR smoothing relations?
The publication of recent data has added fuel to the fire amid concerns that the upcoming regulation of betting is financially damaging for the Brazilian public.
A survey by market research specialist Hibou suggested 10% of the Brazilian population had suffered financial difficulties from gambling, while Yield Sec data suggested legal operators could cover just 9% of Brazil’s total online betting market.
The ANJL itself hit back in an open letter last week after a controversial study from the Brazilian Society of Retail and Consumption (SBVC) claimed 23% of respondents were gambling away money meant for clothes, food and medication.
The ANJL responded with data from the Brazilian Institute of Geography and Statistics (IBGE) showing household consumption expenditure in the country had increased 1.3% in Q2 from the previous quarter, with a 4.9% year-on-year rise.
Then, last week 15 entities from the retail and industry sectors in Brazil signed a manifesto, titled the ‘Proposal for the Nation’, which called for increased advertising regulations and taxation changes.
In response, the ANJL reiterated its dedication to a safe betting market and called for further collaboration between themselves, the government and key private sector industries in Brazil.
The IBJR echoed those sentiments, saying: “IBJR is formalising requests for meetings with government agencies such as the Ministry of Industry and Commerce, the Central Bank, the Ministry of Health and the Ministry of Social Development so that we can collaboratively discuss effective measures to mitigate the potential adverse effects of gaming and betting activities in Brazil.”
Original article: https://igamingbusiness.com/legal-compliance/regulation/anjl-ibjr-brazil-credit-ban/
