Brazil's Attorney General's Office (AGU) has initiated a legal action in the Federal Court of Pernambuco against 17 betting companies, demanding compensation for alleged damages inflicted on Brazil's Public Health System (SUS). The lawsuit estimates the total damages at BRL2.6 billion (approximately $444.3 million) and specifically seeks BRL1 billion in moral and collective damages from the firms involved.
This legal action targets the Northeast region due to its high concentration of socioeconomically vulnerable individuals who participate in high-risk gambling activities. The AGU's lawsuit points out that these companies often privatize substantial profits from millions of bettors, while shifting the financial burdens associated with public health issues to the SUS and society at large. "The defendant companies privatise significant profits derived from the financial collection from millions of bettors, while transferring the budgetary cost resulting from collective illness to the SUS and to society as a whole," the AGU states in its filing.
Currently, the government's view is that the fiscal contributions required by law from these betting firms are inadequate to meet the healthcare costs incurred by the SUS. Notably, only 0.12% of the revenue from these operators contributes to the Ministry of Health.
In addition to the BRL1 billion sought for collective moral damages, the AGU has claimed that these firms should bear part of the healthcare expenses incurred by the SUS. The specific amounts for reimbursement have not been detailed but the AGU intends for this to be calculated subsequently. The lawsuit seeks costs incurred over the five years prior and aims to ensure payments continue as long as the damages recognized in court persist. The AGU considers the reimbursement required could reach as much as BRL2.6 billion.
This lawsuit comes on the heels of a controversial announcement from President Luiz Inácio Lula da Silva, who imposed a ban on the betting industry last Friday. Effective October 6, all licensed betting websites will be inaccessible within Brazil. In reaction to the ban, the National Association of Games and Lotteries and the Brazilian Institute of Responsible Gaming have filed a petition with the Supreme Court, asking for the decision to be reversed.
Among the companies named in this lawsuit are:
– 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's lawsuit underscores its intent for these betting platforms to contribute to the economic and social repercussions of their operations.
