How gambling is driving brazilian youth into debt

Ron

• 23 Nov 2024 • Reading time: 3 minutes

During a speech at the United Nations, President Lula slammed the gambling industry. He called gambling a “disaster” that primarily affects the poorest Brazilians. Many people are racking up huge debts to support their gambling addiction. Lula’s message was clear: it has to stop. His Finance Minister, Fernando Haddad, later agreed. He even called the situation an “epidemic”.

It may sound exaggerated, but the figures don’t lie. In August, 20% of social security money was used for online gambling. That means that money meant for groceries or rent goes straight to gambling sites. No wonder the government is getting nervous.

Why Gambling Is So Tempting for Poor Brazilians

Brazil has a huge group of people living below the poverty line. For them, the promise of a big win sounds like a dream come true. Many gamblers do everything they can to get rich through their favorite football club or a spin on the roulette wheel. But that dream often turns into a nightmare.

Take Beatriz Azevedo dos Santos, a 19-year-old girl from Recife. She started by making small bets on a game called Crash. It seemed innocent at first. She won a little, lost a little, and thought she had figured it out. But the stakes kept getting higher. Before she knew it, she was stuck with a debt of 7,000 reais. Her scooter was stolen, she lost her job, and all the money she had disappeared into gambling debts.

“I thought winning depended only on me,” she says now. “But now I see that it was all an illusion.”

Social media and influencers make gambling popular

If you are on social media in Brazil, you can’t avoid gambling advertisements. Well-known influencers show how easy it is to win. Luxury cars, expensive houses, and a carefree life – it all seems within reach. And yes, it works. Young people believe the hype and get addicted before they know it.

Brands like Betano and Blaze even sponsor football teams and make sure their name pops up everywhere. On TV, radio and the internet you hear catchy jingles promoting gambling. It feels like everyone is getting rich from it. But in reality it is mainly the gambling companies that are winning.

Sky-high interest rates make the problems worse

Many gamblers have no savings, so they borrow money to gamble. In Brazil this is super easy. With a few clicks you can access loans via apps and credit cards. But they have interest rates of up to 438% per year. That means your debt grows rapidly, especially if you cannot repay it.

Central bank president Roberto Campos Neto warned in September that the situation is “very worrying”. He sees that poorer Brazilians in particular are suffering from the debt. Many people get caught in a web of loans and gambling debts that they can no longer escape.

The government intervenes, but is it enough?

The Brazilian government is trying to get the gambling crisis under control. Starting in January, gambling companies will have to comply with strict rules. For example, they will have to monitor players’ gambling behavior and issue warnings in the event of excessive gambling. The government is also considering banning credit cards for gambling.

However, it is questionable whether that will be enough. Many people, like dos Santos, have lost all their savings and more. They are stuck with debts they cannot repay. For them, help comes too late.