Following in the footsteps of countries and gambling hubs like France, Turkey, Singapore, Hong Kong, and Macau, Brazil started 2025 by intensifying its efforts to crack down on unlicensed gambling operators.
The Central Bank (BCB) of South America’s largest country has recently acknowledged significant technical challenges in preventing welfare funds from being used for gambling.
INSS Wants BCB’s Help
On Monday, the National Institute of Social Security (INSS) formally requested the BCB’s assistance in developing a strategy to block recipients of social benefits from using their funds for betting.
The critical request was initiated by INSS’ president, Alessandro Stefanutto, who highlighted the need to better understand how welfare payments are being spent.
Stefanutto is currently leading an investigation into the Brazil Bets market, analyzing whether social funds are being misused or fueling gambling-related issues.
However, tracking individual transactions has proven difficult due to existing system limitations.
BRL 3B ($504M) Bolsa Familia Funds Spent on Gambling in 2024
Concerns date back to a BCB report revealing that an estimated BRL 3 billion ($504 million) of Bolsa Família funds were spent on gambling platforms last year.
Established in 2004 by President Luiz Inácio Lula da Silva, Bolsa Família supports approximately three million families and provides vital financial aid to Brazil’s most impoverished.
This program now faces scrutiny as the government struggles to prevent misuse of its funds.
According to SBC Noticias Brazil and Folha de São Paulo, identifying the source of welfare deposits in recipients’ bank accounts is straightforward.
However, once these funds mix with other personal finances, it becomes impossible to determine their use.
Furthermore, under current laws, funds transferred into a beneficiary’s account become their personal property, leaving the government powerless to impose spending restrictions.
Core Priority Amid the Constantly Growing Market
President Lula’s administration has stated that protecting Bolsa Família funds from misuse is a core priority as Brazil’s regulated gambling market expands.
The INSS has identified a few shortcomings in monitoring spending and will keep assessing current controls.
In similar news, the Senate has approved a Commission of Inquiry (CPI) to examine the economic risks posed by the betting industry.
Led by Senator Soraya Thronicke, the CPI will review the financial transactions of the 68 operators licensed by the Secretariat of Prizes and Bets (SPA).
Thronicke has indicated that the commission will propose measures to limit or ban gambling for Bolsa Família beneficiaries. Findings are expected in the first half of the year.
Meanwhile, Brazil’s President has reiterated the policy that operators who fail to meet the standard regulatory requirements or economic responsibilities risk being excluded from the market. Last week, SPA head Regis Dudena expressed concerns about a proposed selective tax that would target harmful industries, including gambling.