In January 2025, beneficiaries of Brazil’s Bolsa Família social welfare program spent an astounding BRL3.7 billion ($685.6 million) on betting activities, according to a recent report by the Federal Court of Accounts (TCU). This expenditure represented 27% of the total funds allocated to Bolsa Família recipients that month, shedding light on a contentious issue as Brazil approaches the implementation of a formal ban on gambling by social welfare beneficiaries.
The TCU, serving as a federal audit office, undertook this study to determine whether social welfare funds were being used for online betting. The findings were clear: the amount spent was deemed “very high,” raising concerns about the proper utilization of government assistance. The investigation involved analyzing financial transfers from the government to Bolsa Família recipients, drawing on data from the Ministry of Social Development, the Ministry of Finance, and the Central Bank of Brazil.
The TCU’s findings have prompted action. They instructed the Ministry of Social Development, Assistance, Family, and Fight against Hunger, along with the Central Bank, to devise a plan within 90 days to identify and reduce improper inclusions in the Bolsa Família program. Furthermore, there was a call for scrutiny of bank transactions that significantly exceed declared income levels as potential evidence of misuse.
The issue of third parties exploiting beneficiaries’ Individual Taxpayer Registration numbers for illicit gambling activities was also highlighted as an area needing urgent attention. This has become increasingly critical as the Brazilian government solidifies measures to curb gambling among social welfare beneficiaries.
The formal ban on betting by social welfare recipients has been brewing since last year, with significant regulatory changes taking effect on January 1, 2025. In November 2024, the Supreme Federal Court ratified an emergency measure prohibiting the use of social welfare funds for gambling, setting the stage for the regulatory crackdown.
In a decisive move in late September, the Secretariat of Prizes and Bets issued Normative Ordinance No 2,217/2025 and Normative Instruction No 22, which explicitly banned recipients of Bolsa Família and Continuous Benefit Payment programs from engaging in fixed-odds betting. This new regulation established a database of social welfare beneficiaries, mandating betting operators to verify player identities against this list. Operators are required to cross-check bettors’ CPF numbers in Sigap, Brazil’s betting management system, ensuring that no welfare recipient is allowed to gamble. These checks must be conducted at least biweekly, with operators obliged to block and refund any accounts associated with welfare recipients.
Initially, betting operators were given 30 days to comply with this mandate, a deadline now extended by an additional 30 days, reflecting the challenges of implementing such sweeping measures.
However, not everyone agrees with the ban. Some, like lawyer Luiz Felipe Maia, have argued that the prohibition infringes on civil rights. According to Maia, “At the end of the day, it becomes a civil rights issue because what we’re saying is, ‘Okay, if I am in a situation where I need welfare, I cannot decide where I’m going to spend my money, so I have limited freedom.’” He suggests that instead of restricting how money is spent, the government could provide specific vouchers for essentials like food to ensure funds are used appropriately.
There is also concern that the ban might push players towards the black market. The National Association of Games and Lotteries (ANJL) has criticized the extent of the ban, arguing that the initial intention was only to prevent social welfare money from being used for betting, not to ban gambling entirely for these individuals. An ANJL-commissioned study revealed that 45% of social welfare beneficiaries might resort to illegal gambling channels once the ban is in full effect, highlighting potential unintended consequences of the strict regulations.
As Brazil moves forward with these regulatory changes, the debate continues over the balance between protecting vulnerable populations from exploitation and preserving their autonomy. While the government’s intention is to ensure social welfare funds are used as intended, critics worry about overreach and the possibility of exacerbating the very issues the ban seeks to address. The coming months will be pivotal as authorities, betting operators, and welfare recipients navigate the complexities of these new restrictions in the world of Brazilian gambling.
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