Brazil: Alckmin's ministry refutes reports of gambling's impact on retail trade and debt

The document was drawn up by the ministry led by vice-president Geraldo Alckmin (PSB) at the request of the AGU (Federal Attorney General's Office). The request came about because of a lawsuit before the Federal Supreme Court (STF) asking for the betting law to be suspended. The ministry also questions the Central Bank's conclusions about household spending on betting.

The sector is currently being regulated by the Lula government, led by the team of Minister Fernando Haddad (Finance).

The action was initiated by the CNC (National Confederation of Trade in Goods, Services and Tourism). The organisation says that the expansion of gambling in Brazil has led to family indebtedness and has considerably damaged the domestic economy, retail trade and social development.

In the Ministry of Development's document, the argument is that the country's trade data does not allow us to identify a slowdown in the sector. The technical note, signed last Friday (4), provides data on the performance of the retail sector.

‘The data provided by the IBGE indicate that trade in Brazil is growing, with retail sales showing the following variations: In July 2024, sales grew by 0.6 per cent compared to June. In the first half of 2024, retail trade accumulated an increase of 5.3 per cent. In the 12 months to July, the retail trade accumulated an increase of 3.7 per cent’.

The report also contacted the AGU and the Treasury, but received no replies.

In the technical note, “Desenvolvimento” also states that ‘it is even more complex to attribute any variation in the sector's results to spending on betting and games of chance’, even questioning data presented by the Central Bank in a note sent to Senator Omar Aziz (PSD-AM).

The Central Bank's note caused strong repercussions within the government, the retail sector and Congress. The document concluded that in August alone, Bolsa Família beneficiaries transferred R$3 billion to bets in Pix payments. Over the course of this year, the monthly gross transfers to bets have varied between R$18 billion and R$21 billion.

Lula's government ministry questions these conclusions, pointing to difficulties with the correct registration of the sites' economic activities. ‘These figures represent gross betting amounts, without considering the prizes paid to bettors, which would result in lower net spending on bets.’

When questioned, the Ministry of Development said that the note does not question information from the Central Bank, but ‘only states that, with the official data available, it is not possible to technically assess the impact of the bets’. And that for this to happen, a ‘more comprehensive study would be necessary, also considering the interaction of other variables in the economy’.

The ministry also emphasised that the issue is considered relevant and that it will follow up and monitor the topic, especially from the point of view of the impact on the retail trade - which is also described in the technical note.

Regarding household indebtedness, Alckmin's department uses Central Bank data to conclude that there is stability, according to data from the first half of the year.

‘There is some stability in household indebtedness to the National Financial System in relation to accumulated income over the last 12 months, from 48.25 per cent in August 2023 to 47.83 per cent at the start of 2024 and finally 47.93 per cent in July 2024,’ the text says.

The note was drawn up by the General Coordination of Sectoral Institutional Articulation of the Ministry's Department of Trade and Services.

By Paulo Saldaña