Central Bank points out that bettors allocate up to R$ 30 billion per month to betting

According to the head of the organization, banks already perceive a greater risk and charge higher interest rates to gamblers.

The regulation of online betting has not inhibited Brazilian interest in gambling. From January to March, bettors allocated up to R$ 30 billion per month to bets, said the executive secretary of the BC (Central Bank), Rogério Lucca, on Tuesday (8). He and the president of the body, Gabriel Galípolo, spoke to the Senate’s CPI (Parliamentary Commission of Inquiry) on Bets.

According to Lucca, last year, when the market was not yet regulated, the Central Bank estimated that the flow spent on electronic betting was around R$ 20 billion per month. With the updated data after the regulation, which came into effect on January 1st, the Central Bank found that the value was slightly higher, between R$ 20 billion and R$ 30 billion.

“At that time [last year], we reached an average monthly flow of R$ 20 billion to these sites. During this year, from January to March, the value we monitor for activity purposes is around R$ 20 billion to R$ 30 billion per month, confirming what we had estimated at the end of last year,” said Lucca.

Monitoring became more effective after legalized betting sites were required to register a bank account with a specific National Classification of Economic Activities (CNAE) code. The Central Bank clarified that the data is for internal use only and will not be released periodically.

Almost all the money spent is distributed to the winners, but the figures differ between the Ministry of Finance and the Central Bank. According to Galípolo, the Secretariat of Prizes and Bets (SPA), linked to the Ministry of Finance, has recorded a return of 93% to 94% of the amount spent by bettors in prizes. In a preliminary report released last year, the Central Bank had calculated an average return in prizes of 85%.

Without the power to oversee.
The president of the Central Bank clarified that the institution can only compile statistics and does not have the legal authority to inspect, supervise, or apply sanctions, such as blocking transactions of betting sites not authorized to operate in Brazil. He clarified that the monetary authority can only take these measures if notified by the SPA (Spanish National Financial System).

“The Betting Prizes Secretariat is the one that defines which bets are authorized or not. The Central Bank, once informed by the SPA, will tell the financial institution: ‘you have companies there to observe in their procedures and, from now on, no longer authorize them.’ It is not the Central Bank that interrupts a transaction. From then on, it is the financial institution itself that interrupts it,” explained Galípolo.

The president of the Central Bank clarified that, in addition to compiling statistics, the Central Bank’s work regarding bets is limited to preventing money laundering and combating terrorism, an activity for which the monetary authority has legal competence. In these cases, financial institutions must notify the Central Bank, which then forwards suspicious transactions to the Council for the Control of Financial Activities (Coaf), the Public Prosecutor’s Office, and the Federal Police.

“I can neither allow my prerogatives to be violated nor can I violate the prerogatives of other entities,” Galípolo justified.

Bank secrecy
Despite requests from several senators, Galípolo stated that, due to legal obligations to protect personal data and banking secrecy, the Central Bank cannot block the Pix (Brazilian instant payment system) of bettors who receive Bolsa Família (a Brazilian social welfare program). According to him, the agency also lacks the power to block the Pix keys of betting companies that receive funds from the social program.

In his first week as president of the Central Bank, Galípolo had committed to collaborating with the Federal Court of Accounts (TCU) and providing information about Pix transactions for Bolsa Família beneficiaries who gamble on betting sites.

The only data the Central Bank president provided was that online gamblers have a significantly higher credit risk (chance of defaulting on loans) than non-gamblers. According to Galípolo, banks are already aware of this increased risk and are charging higher interest rates to these clients.

Galípolo and the BC technician testified at the invitation of the commission’s president, Senator Dr. Hiran (PP-RR). Established in November in the Senate, the Betting CPI aims to investigate the impact of electronic betting on the budgets of Brazilian families and the financial system, as well as its possible association with criminal organizations. The rapporteur is Senator Soraya Thronicke (Podemos-MS), author of the CPI request.