This is Naked Capitalism fundraising week. 103 donors have already invested in our efforts to combat corruption and predatory conduct, particularly in the financial realm. Please join us and participate via our donation page, which shows how to give via check, credit card, debit card, PayPal. Clover, or Wise. Read about why we’re doing this fundraiser, what we’ve accomplished in the last year,, and our current goal, strengthening our IT infrastructure.
Brazilian football clubs have warned of “fatal blow” to national sport as concerns about the impact of online gambling grow worldwide.
Less than two weeks before the first round of Brazil’s genuinely make-or-break presidential elections, on October 4, incumbent President Luiz Inácio Lula da Silva has set his sights on one of the country’s fastest growing business sectors: online gambling. As concerns grow about the sector’s effects on the indebtedness of families, especially those with lower incomes, Lula is even talking about imposing a total ban on online casinos.
“Are we remaining passive while society drowns in debt?” Lula said. “Are we remaining passive while society is driven to madness – because this is an illness. People lose their minds; they contemplate suicide or abandoning their homes. So, we are going to take serious action.”
Like the US, Brazil has developed a serious gambling problem since legalising fixed-odds sports betting in 2018. Like the US, Brazil has emerged from nowhere to become one of the world’s biggest betting markets (#1 in the case of the US, #5 in the case of Brazil). As in the US, the spectacular growth of this nascent sector has come at a very heavy price, reports the Irish Independent:
In 2024, online gambling losses drove an estimated 1.8 million Brazilians into debt. It is affecting the country’s most vulnerable households: In one month last year, hundreds of millions of dollars from the Bolsa Familia, Brazil’s largest welfare programme, were spent on betting platforms. Demand for treatment related to gambling addiction in the public health system has risen 140pc in five years.
Brazil’s online gambling sector has registered growth of close to 500% since January 2023, while the number of people placing bets has also risen steadily. In 2025, Brazil recorded a monthly average of approximately 9.25 million bettors, with peaks exceeding 10.8 million during periods of peak football activity, such as October.
Lula has been trying to buck this trend for some time, including by signing a decree allowing the government to freeze the funds of companies that run illegal online gambling platforms. In July, his government imposed strict advertising rules on online gambling companies, including mandatory warning labels on all betting ads about addiction risks and potential financial losses.
Lula’s concerns are well justified. In 2025, $68 billion was wagered via Pix, the country’s digital payments system, just one year after online gambling was fully legalised, reports Agência Publica. Of that money approximately $12 billion was lost, which is apparently equivalent to 0.68% of the gross national disposable income of Brazilian families.
Many of those families are in Brazil’s poor and working classes — one of Lula’s core constituencies. In a speech on Sunday the president said that if it were up to him, online betting companies would be shut down completely, though he acknowledged that any change will depend on the will of Congress, which is far from guaranteed. Brazil’s Finance Minister Dario Durigan, meanwhile, insists the government has not yet made a decision on the matter.
Lula is now planning two additional measures: a complete ban on online casino activity, and the creation of an electoral programme in which he meets with Brazilians affected by problem gambling.
If Lula wins the upcoming election, Brazil may become the first Top-10 economy in the world to try to reverse some of the damage caused by legalised online gambling. The fact that his rival, Flavio Bolsonaro, is not opposing Lula on this issue suggests the proposed ban enjoys broad public support.
For those wondering, Lula appears to have an even chance of winning that election after major tracking polls have tightened. A scandal involving Alexandre de Moraes, the powerful judge who led the coup trial that convicted former president Jair Bolsonaro, has exacted a heavy toll on Lula’s campaign. As regular NC readers are aware, Trump-endorsed, pro-Israel candidates have a near-perfect record of winning general elections in Latin America over the past year.
Brazil’s presidential election is a month away (Oct 4).
Polls all year have shown Lula with a modest lead, but they have definitely tightened over the past 6 weeks. One of the major tracking polls now has Flavio Bolsonaro narrowly winning the run-off against Lula. https://t.co/Rl0t4OLbrp pic.twitter.com/DKVWZ3EStY
— Glenn Greenwald (@ggreenwald) September 3, 2026
Lula’s proposed ban on online gambling will apparently not extend to sports betting and sponsorship agreements involving sports clubs and competitions. But it could still have a major impact on both areas.
Sports betting and online casino “products” are generally operated by the same companies. More important still, online casino games are estimated to account for around 75% of operators’ revenues. As such, any sizeable hit to that side of the business would mean a lot less money available for sponsorship and advertising. From the Reuters article:
Brazil’s government is reportedly preparing an executive order to ban online casino operations in the country despite concerns over lost tax revenue and potential legal challenges from companies licensed to operate in the country, sources familiar with discussions within the presidential office told Reuters.
Leftist President Luiz Inacio Lula da Silva, who has repeatedly signaled he wants to curb online gambling, is expected to sign off on the final text before the first round of general elections on October 4, according to three sources, who spoke on condition of anonymity…
Officials acknowledge that banning online casinos while preserving sports betting would significantly reduce operators’ revenues, affecting sports sponsorship spending and government tax receipts.
Brazil’s biggest football clubs have already responded to the threat by issuing a joint statement warning that “making the current model unviable” could favour the growth of illegal platforms that do not pay taxes or comply with current regulations. It could also deliver a “fatal blow to Brazilian football”, they said, perhaps even tipping some clubs into insolvency.
Betting sponsorship has become the main source of income for Brazilian football, reaching $200 million in 2026. That money trickles down to smaller clubs, lower divisions and lower-profile competitions, according to One Football. The funds are necessary to support the “administration, training centres, social projects, women’s football and youth development, areas that are often the first to suffer cuts when revenues fall”.
In other words, Brazilian football clubs are now financially hooked on the sponsorship fees coming from online betting firms, much like national and regional governments are growing increasingly dependent on the tax revenues paid by online betting companies. But most of this money is built on the immiseration of football fans, warns Lula in his response to the Serie A clubs’ letter.
“Sao Paulo was world champion three times without sports betting. Santos, twice. Gremio, Flamengo and Internacional, too. And my Corinthians, also twice. Our national time also won five world titles when these platforms did not even exist. The idea that eliminating sports betting will end Brazilian football is nonsense.
“Football teams cannot want the poor person, who already spends his money to watch the game, to pay for buses, subways, and still have to [gamble] to please the teams. No, no and no. Get ready because I’m getting into this fight. We are going to end this business.”
While the people who partake in sports gambling are predominantly men, it is Brazilian women to whom Lula is directly appealing, as can be seen in the English-subtitled campaign video below, from March. There is good reason for this: it is wives and partners of online gamblers who have to share the fallout of financial devastation, including drained joint savings, hidden debt accrued in their names and ruined credit scores.
🚨🇧🇷 BREAKING — Lula:
Brazil Will Ban Online Gambling. pic.twitter.com/fiyQBP1gbV
— Pamphlets (@PamphletsY) March 8, 2026
The massive growth in sports gambling has siphoned money away from other forms of consumer spending and household bills. Research by the National Confederation of Store Managers suggests that 46% of gamblers have pared back their spending on clothing and amenities such as travel and restaurants to accommodate their gambling outlay. Fifteen percent have even stopped paying their bills.
It’s a similar story in the US. A recent study from the New York Fed found that sports betting is linked to rising credit delinquencies and plummeting credit scores in the more than 30 U.S. states where the activity is legal. One UCLA study from earlier this year found that in states where online sports gambling has been legalised, bankruptcies and credit card delinquencies increased about 25%.
In Brazil, the impact has apparently even been felt in the education sector. A study by Educa Insights suggests that as many as 35% of potential students interested in starting a degree in 2024 did not do so because they had splashed their income on online gambling platforms and virtual casinos.
The ubiquity and ease-of-use of online gambling is what makes it so uniquely dangerous. Never before has it been so easy to place a bet on a sporting event, or a combination of sporting events, or a virtual roulette wheel or poker match. Via our smartphones, we all have a giant virtual casino in our pocket or handbag, and it’s open 24/7. It will also happily accept our credit — until the day our bank, or banks, put a block on it.
It’s not just the economic fallout from online gambling that matters. Gambling addiction results in emotional distress, including depression, shame, and chronic stress for spouses and children, as well as relationship and family breakdown. It often goes hand-in-hand with domestic abuse and carries one of the highest rates of suicidal behaviour of any addictive disorder.
As Geaux Gabrielle, founder of the Thurman Perry Foundation, points out in the tweet below, process addictions like gambling can be even more difficult to treat than substance abuse: “they take every single person near the addict with them”.
Gambling is demonic and I am so serious about that. It is worse than drug addiction and I say that as a public health professional. Process addictions are INFINITELY more difficult to treat, especially ones as socially acceptable as gambling.
They take every single person near… https://t.co/EtC3n0BlGh
— g. (@GeauxGabrielle) September 21, 2026
The Brazilian psychologist Juliana Bizeto likens gambling to crack cocaine:
“If gambling were a drug, it is comparable to crack. Its addictive power is greater than, for example, that of cocaine. The shorter the interval between the bet and the outcome, the greater the risk of compulsion. To make matters worse, people often gamble alone. The lack of social control causes more damage.”
The fact that Lula’s government is now talking of trying to put the genie of online gambling (or at least part of it) back in the bottle, while commendable, does not negate the fact that it was Lula’s government that was largely responsible for opening the bottle in the first place through its 2024 regulations. As Infobae reports, it was online betting companies that helped draft the regulations while public health considerations took a back seat (machine translation):
[A]ccording to the newspaper Folha de São Paulo, during the drafting of the rules to regulate the sector, the government only organised five meetings with health-related groups, while there were 251 meetings with online betting companies.
Rodrigo Machado, a psychiatrist at the Impulse Disorders Program of the Institute of Psychiatry of the Hospital das Clínicas (HC), warned in the journal of the University of São Paulo (USP) that the online gambling market can wreak havoc on Brazilian public health.
“We understand that this new measure can bring potential financial benefits to the country. However, for this to happen, we need to be prepared and structured, with an appropriate action plan on how to provide healthcare to this population and how to train professionals to manage these new patients,” he said.
According to the psychiatrist, one of the critical points is the lack of national training, since in Brazil health care levels such as Basic Health Units (UBS) and Psychosocial Assistance Centers (CAPS) are not sufficiently prepared to treat gambling addiction.
Another major concern flagged by experts was the risk that the online gambling sector, once unleashed, would boost organised crime in Brazil by making it even easier to launder money. And so it has proven. Just a few days ago, the Financial Action Task Force, a global financial crimes watchdog based in Paris, warned that online gaming and gambling platforms are increasingly being used for money laundering and terrorist financing.
The irony is that in Brazil, as in many other countries, one of the great attractions of legalising and regulating online gambling was that it would (supposedly) help to increase tax revenues. In reality, it has opened up a whole new path for money laundering, making it an ideal vehicle for tax evasion. Meanwhile, as the UN Office on Drugs and Crime warns below, the line between online gaming and online gambling is becoming increasingly blurred.
Gaming turned into gambling.
Criminals are making online gambling look more like online gaming to attract younger users.
Mobile access, addictive design features and the introduction of monetary stakes are putting more young people at risk.https://t.co/1gCDsdZlOF pic.twitter.com/tf3fDV2tEf
— UN Office on Drugs & Crime (@UNODC) September 17, 2026
By
