Isaac Sidney, president of the Brazilian Federation of Banks (Febraban), wants the ban on the use of credit cards for gambling to be brought forward.
Normative Ordinance No 615, published back in April, stipulates using credit, crypto, cash, payment slips or cheques is to be prohibited.
Only electronic money transfers will be permitted for deposits, bets and withdrawals. Player and operator accounts must also be authorised by the Central Bank of Brazil.
However, the credit card betting ban is set to come in from the launch date of the legal market on 1 January 2025. In the unregulated market, players can still transact using these soon-to-be prohibited methods.
Sidney believes it is important the ban comes in sooner. This, he argues is vital to protect players.
“We are very concerned about how much this could compromise family income and increase default, even increasing the cost of credit,” Sidney told journalists in quotes shared with Folha.
Sidney’s comments follow a recent survey by market research specialist Hibou. The study found 10% of the Brazilian population had experienced financial problems stemming from their gambling.
Additionally, 65% of respondents said they knew of someone who had suffered financial issues from betting.
How is the government cracking down on illegal gambling payments?
The majority of the gambling market uses Pix, an instant payment service controlled by the Central Bank of Brazil.
As part of its plans to clamp down on the illegal market, the Brazilian government has announced it will block payments made through Pix to unlicensed operators.
Ari Celia, director of payments services company Pay4Fun, is confident that will be an effective method of countering illegal operators.
“If any commercial bank isn’t aware they have a company or client that is using illegal sites, as soon as they receive a warning from the Central Bank they will shut down their bank account immediately,” Celia told iGB.
“If they don’t, they’ll be subject to fines. There’s no point for any commercial bank in Brazil to allow those accounts to process Pix once they are notified.”
Limiting payments options for black market operators
The block on Pix payments to illegal operators means it will be “difficult” for unlicensed sites to be active in Brazil Celia says.
Cash and crypto are potentially options for offshore companies, although Celia has doubts over how feasible these are.
“Cash is limited, a lot of people in Brazil are not using it anymore,” Celia explained. “And how do you get cash for an online operation? You need local people, brokers, affiliates, to receive and send money to operators.
“This is very complicated and it’s almost impossible to send money out of Brazil using illegal channels.
“To buy crypto here you need an account for a crypto exchange, meaning you have to provide personal data. The Central Bank is on top of that.”
