Brazil's Attorney General's Office (AGU) has initiated legal action in the Federal Court of Pernambuco against 17 betting companies, demanding compensation for damages to the nation’s Public Health System (SUS). The total amount sought is BRL2.6 billion ($444.3 million), out of which BRL1 billion is claimed for moral and collective damages. The lawsuit targets this region specifically due to its high concentration of socioeconomically vulnerable individuals engaged in high-risk gambling.
In the lawsuit, the AGU asserts, "The defendant companies privatize significant profits derived from the financial collection from millions of bettors, while transferring the budgetary cost of collective illness to the SUS and society as a whole."
The government's stance is that the compensation required under existing laws does not adequately address the financial burdens on the healthcare system. Currently, a mere 0.12% of the mandatory allocations from the betting companies' revenue is funneled to the Ministry of Health.
For collective moral damages, the AGU is seeking to compel the 17 betting firms to pay no less than BRL1 billion to compensate for the harm inflicted by their operations. Reports indicate that the companies named in this legal action control roughly 80% of the current market.
The betting companies involved in the lawsuit include:
– Kaizen Gaming Brasil Ltda. (Betano)
– HS do Brasil Ltda. (Bet365)
– SPRBT Interactive Brasil Ltda. (Superbet)
– Ventmear Brazil SA (Sportingbet)
– Esportes Gaming Brasil Ltda. (Esportes da Sorte and Onabet)
– Foggo Entertainment Ltda. (Blaze)
– NSX Brazil (Betnacional)
– EB Intermediações e Jogos S/A (Estrelabet)
– Ana Gaming Brasil SA (7K and Casino)
– OIG Gaming Brazil Ltda. (7Games and Betão)
– BPX Bets Sports Group Ltda. (Vaidebet)
– H2 Licensed Ltda. (H2 Bet)
– Pixbet Soluções Tecnológicas Ltda. (Pixbet)
– NVBT Gaming Ltda. (Novibet)
– SevenX Gaming S/A (Bullsbet)
– NSX Betfair Brasil SA (Betfair)
– Apollo Operations Ltda. (KTO)
The government expects betting companies to assume a portion of the costs associated with the services provided by SUS. Although the lawsuit does not specify an exact dollar amount, the AGU anticipates calculating these figures later. The timeframe for reimbursement spans the five years preceding the lawsuit and will extend as long as the court recognizes ongoing damages. The AGU estimates that a potential reimbursement could reach approximately BRL2.6 billion.
This lawsuit follows a turbulent week for the Brazilian betting industry, which has been amplified by President Luiz Inácio Lula da Silva’s recent announcement of a ban on the sector effective from October 6. All licensed betting sites are to be blocked in Brazil. In response, the National Association of Games and Lotteries and the Brazilian Institute of Responsible Gaming have submitted a request to the Supreme Court to overturn the ban.
