BRASILIA : Soccer-mad Brazilians have fallen hard for online sports betting, yielding a boom of interest from foreign gambling companies that may boost state coffers but also threatens to divert funds from consumer spending in other areas.
Latin America’s largest economy has seen lower-than-expected growth in consumer spending in the country in recent months, a weakness some banks and think tanks are blaming on gambling. Such a linkage would echo data seen in some U.S. states touched by online gambling fever.
Brazilian central bank governor-in-waiting Gabriel Galipolo has chimed in as well.
“Even major banks are discussing why the recent growth in income is not reflected in the growth of savings or consumption, and may be leaking into this type of activity, into gambling,” Galipolo said at a seminar last month, without elaborating.
Brazil’s online gambling boom underlines profound economic shifts that can result from the wider availability of betting and the tightrope for policymakers worldwide as they look to reap the gains in terms of tax receipts while avoiding the drawbacks.
The gambling industry disputes the impact betting has on consumption and maintains that the drop came with the COVID-19 pandemic that kept people at home for two years.
“The retail sector is using gambling as a scapegoat,” said lawyer Luiz Felipe Maia, who represents a dozen gambling companies in Brazil. He pointed out that one safeguard in last year’s law laying the rules for fixed-odds sports bets is a ban on the use of credit cards for betting.
Brazilians spent 68.2 billion reais ($12.2 billion) in the year ending in June on betting platforms abroad, according to an analysis by lender Itau Unibanco, based on central bank data. That would put it among the world’s top six sports betting markets.
‘STOPPED LIVING’
The Brazilian government expects to receive 3.4 billion reais in down payments for license