Zona de Azar Brazil – Gambling Addiction: Should Betting Houses in Brazil Pay for Treatment?
Brazil. – October 10, 2024 www.zonadeazar.com Last Thursday, on the 3rd, President Lula attended a meeting with ministers from various government departments to discuss the impact of betting on Brazilian citizens’ lives and measures the government could take to prevent indebtedness and gambling addiction, which is the compulsion to gamble.
During the president’s speech, he mentioned the possibility of betting houses paying for the treatment of people with gambling addictions, a move also seen in other countries where the betting industry is already regulated.
The funds, which can be donated by companies or collected as part of taxes gathered by the government, are distributed to organizations responsible for treating gambling addiction. One example is the Gordon Moody, a non-profit UK institution that announced the Gambling Support First Aid program at the SBC Summit Lisbon, an initiative to help the LGBTQ+ community with gambling addiction.
“Most of us know how to respond to a medical emergency, but only a [small] number of people know how to truly support those who might be facing gambling-related harm. We want to create a community where talking about gambling as a hidden addiction is not stigmatized, and people feel comfortable discussing it,” explained Nina Shafaq, the institution’s CEO.
Criticism of Government Action in Addressing Gambling Addiction
In Brazil, since regulation is still in preparation and will only take effect from January 1, 2025, there is still some uncertainty about the specific obligations of companies regarding the treatment of gambling addiction.
President Lula mentioned the issue during the meeting, but part of the taxes that will already be allocated to the government could also be directed to ministries such as Development and Health.
For Rafael Ávila, a psychologist specializing in Responsible Gambling, the government’s lack of attention to policies for combating gambling addiction is concerning.
“We have not yet seen the involvement or expectations from a very important area when discussing a regulated gambling market – the Ministry of Health and public mental health policies, which are designed to protect users who may develop Gambling Disorder [pathological gambling] and increase demand for services at the Psychosocial Care Centers (CAPS),” he said.
Support for Combating Gambling Addiction Around the World
In the UK, sports betting and online gaming operators are required to contribute to funding gambling addiction treatment programs. Online gaming and betting operators must pay 1% of their gross gaming revenue, while betting houses and casinos contribute around 0.4%. The Gambling Commission is responsible for distributing the funds directly to the National Health Service (NHS) and the UK Research and Innovation (UKRI).
Elsewhere in Europe, Spain, under its new gaming legislation, requires operators to contribute financially to gambling addiction awareness and treatment programs to more effectively address the social and psychological issues that may arise from addiction.
Across the Pacific, Australia has state regulations that require betting operators to contribute to specific funds for treating gambling addiction. These funds are used to support awareness, prevention, and treatment initiatives.
In Latin America, countries are at different stages of regulation. Brazil, for example, is still moving toward this goal, while neighboring Peru is much further ahead.
In September, Peruvian congresswoman Digna Calle Lobatón introduced Bill No. 8,981 to reform the country’s tax system for casinos and slot machines. The amendment aims to increase taxes on land-based gaming by 20%, which would not affect online operations or sports betting.
The proposal seeks to “prevent and treat mental health problems stemming from gambling addiction and other impulse control disorders,” though it does not clearly explain how this goal would be achieved through higher taxes. A brief section mentions that 8% of the tax revenue would be allocated to the Ministry of Health “to be used for the prevention and treatment of mental health issues caused by gambling addiction and other impulse control disorders.”
So, should betting houses pay for the treatment of people with gambling addiction?
The answer varies depending on the legislation. The idea suggested by President Lula aligns with practices in more established markets – such as the UK and Australia.
In Brazil, there will be a 15% Individual Income Tax (IRPF) on the net profit of winnings. Winnings below the first tax bracket threshold will be exempt. Of the total fixed-odds betting revenue, 12% will be allocated to various areas. Of this amount, 10% will go to social security, 10% to education, 36% to sports, 1% to health, 28% to tourism, and 12.6% to public safety.
The percentage allocated to the sports sector will be managed by the Ministry of Sports, which will retain 22.2% and be responsible for distributing the remaining 7.3% – of which 2.20% will go to the Brazilian Olympic Committee (COB), 1.30% to the Brazilian Paralympic Committee (CPB), 0.70% to the Brazilian Club Committee (CBC), 0.50% to the Brazilian School Sports Confederation (CBDE), 0.50% to the Brazilian University Sports Confederation (CBDU), 0.30% to the Brazilian Paralympic Club Committee (CBCP), and 0.30% to the Brazilian Master Sports Committee (CBEM). Additionally, 0.7% of the funds collected will be directed to state sports departments, which must allocate half of this amount to municipal sports departments proportionate to each city’s population size.
Another tax to be collected is the Withholding Income Tax, the Gross Gaming Revenue (GGR), which will be taxed at 12%, covering allocations to different areas of interest, but without any government specification for now. This is a point of concern for the future when the market is regulated – where exactly will the funds go?
Beyond revenue collection, it should also be emphasized that one of the mandatory measures of the law is the promotion of responsible gambling. In August, the Prizes and Betting Secretariat (SPA) published in the Federal Official Gazette (DOU) Ordinance No. 1,231, which sets rules and guidelines for responsible gambling, communication actions, advertising, and marketing.
The Brazilian Compulsive Support Company (EBAC), for example, is at the forefront of combating gambling addiction in Brazil and is dedicated to offering support solutions and implementing programs focused on responsible gambling. Additionally, EBAC ensures that online betting companies comply with Brazilian laws, helping identify players who may develop gambling-related problems and providing appropriate psychoeducational support.
As Rafael Ávila highlighted:
“Raising bettors’ awareness must necessarily involve educating them on how games work, their risks, their odds, and the reasons for playing, which should remain as entertainment.”
Editó: @_fonta www.zonadeazar.com
