Brazil sector slams Haddad ‘attack’ after finance minister calls for betting ban

Fernando Haddad, the finance minister of Brazil, has caused a stir by stating he’d vote to ban gambling if a bill was to appear in the Chamber of Deputies.

In an explosive interview with ICL Notícias, released on 21 July, Haddad and economist Eduardo Moreira discussed the regulated gambling sector in Brazil, which launched on 1 January this year.

When asked by Moreira how Haddad and the government planned to alleviate concerns over family financial troubles caused by gambling, the finance minister described the situation as a “disaster”.

“Families are suffering. I’ve seen things that are unspeakable, as they say,” Haddad said. “I’ve heard of horrifying cases involving bets, people I know who even lost family members because of it. It’s a real tragedy.

“If a project came up in the Federal Chamber to continue or to stop [betting in Brazil], I’d press the stop button. There’s no amount of tax revenue that justifies this mess we’ve gotten ourselves into. What’s happening is really bad.”

Haddad’s anti-gambling stance raises industry eyebrows

The SPA, which regulates gambling in Brazil, is a department within the ministry of finance. In response to the interview, many industry stakeholders noted the irony of the ministry’s leader appearing to lobby for the shutdown of a sector it regulates.

Haddad is not the only official seeking a shutdown of licensed betting in Brazil. The sector is still awaiting the outcome of a November Supreme Federal Court hearing to clarify whether the betting laws are unconstitutional. This was expected to be due in H1 2025, but has not been addressed in a number of months.

Haddad has already attracted the ire of the licensed Brazil gambling sector, as he is one of the key proponents of the bill to increase the gambling tax rate from 12% to 18% GGR.

That measure is now undergoing a review by the National Congress, with the provisional measure extended to 8 October, by which time a vote will occur to decide whether to make the tax rise permanent.

Haddad comments draw furious reactions from trade bodies

The ANJL expressed its “surprise and dismay” at Haddad’s statements, describing them as defamatory against the betting sector.

“This surprise comes from the fact that the sector, which has been diligent in complying with all the regulations of the Secretariat of Prizes and Bets (SPA), did not expect to be the target of such an attack from the minister,” an ANJL response read this week.

“It also expresses dismay because of the highly detrimental potential for the market, stemming from this assessment by the head of the department under which the sector’s regulations are being developed.”

According to the ANJL, the issues of family debt and predatory advertising mentioned in the interview largely relate to illegal operators, rather than their licensed counterparts.

“It is also crucial to clarify that cases of addiction are rare in the regulated market,” the ANJL continued.

“The core problem of gambling addiction lies in the widespread activity of illegal websites, which adopt no mechanisms to protect bettors and do not collect any taxes for the country.”

The Brazilian Institute of Responsible Gaming (IBJR) echoed the ANJL’s view that Haddad’s comments were misguided, targeting the legal sector when the illegal alternative is the primary issue.

“The minister’s view diverts attention from the real problem: tax evasion in the illegal market, which dominates 51% of the sector and generates annual losses of BRL10 billion for the country,” the IBJR claimed.

“Statements that downplay the importance of the regulated environment create legal uncertainty, discourage investment and, in practice, strengthen the illegal operations that the government should be combating.”

Treating gambling as a public health issue in Brazil

Haddad says the four years between legislation first being approved and full regulation coming in meant Brazil missed out on BRL40 billion ($7.2 billion) in taxes.

The finance minister also said the government was working with the Central Bank to target fintech companies, which he feels are being used as vehicles for gambling-linked organised crime, such as money laundering.

In Haddad’s view, gambling must be treated as a “serious public health issue” and the government should be utilising data from the first six months of the regulated market.

The ANJL somewhat agrees with this comment, though the association also stressed that licensed operators are funding most of the development of responsible gaming programmes in Brazil.

“Regarding Minister Fernando Haddad’s understanding that gambling addiction should be treated as a public health issue, the association agrees and has already expressed this opinion several times,” the ANJL added.

“It is important to emphasise, however, that currently, the tax paid by legal betting houses already allocates a portion of these funds to health.”

 Industry trade bodies in Brazil have denounced Finance Minister Fernando Haddad for an interview they believe was misguided.