Brazil’s Top Audit Court Seeks Ban on Social Welfare Funds for Gambling
The Tribunal de Contas da União (TCU), Brazil’s top audit court, has requested a ban on the use of social welfare funds for gambling activities, following an appeal from the Attorney General’s Office (AGU).
After a two-day hearing at the Supreme Federal Court (STF) in November, the court initially favored an emergency measure proposed by Minister Luis Fux. This measure aimed to immediately prohibit gambling in Brazil using social welfare funds, including those from the Bolsa Família program. Bolsa Família provides state support to impoverished families, contingent on children attending school and receiving vaccinations.
However, on December 12th, the AGU filed an appeal against the ban, arguing that the government lacked the technical resources to effectively enforce it. They cited the difficulty in distinguishing social welfare funds from other money used for gambling.
The AGU emphasized that they were not against the ban itself, but rather needed a “reasonable period” to ensure its effective implementation.
Now, TCU Minister Jhonathan de Jesus has called on the Ministries of Finance, Sports, and Development, as well as Caixa Econômica Federal (a state-owned bank), to immediately reinstate the prohibition.
These bodies have been given 15 days, starting from December 15th (the date the decision was signed), to discuss the matter.
Minister Jesus also requested evidentiary information regarding the misuse of social welfare funds for gambling. He stated, “The allocation of resources for gambling, an activity that does not contribute to meeting basic needs or overcoming poverty, violates these objectives and compromises the effectiveness of the public social assistance policy.”
Does the Brazilian Government Have the Right to Interfere?
In September, the Central Bank of Brazil reported that a significant portion of funds from its Bolsa Família program disbursed in August were used for online gambling.
The AGU argues that once social welfare funds have been transferred to beneficiaries, the government loses the right to dictate how that money is spent.
They also cited data from the National Secretariat of Income and Citizenship (Senarc), which indicated that only a small percentage of Bolsa Família families withdraw the full social assistance amount using the provided card. The vast majority use the online bank account linked to Bolsa Família benefits, which can also receive other income, such as salaries.
“Therefore, it is essential to understand that a possible account freeze invades the private sphere, in which the citizen moves other income,” the AGU stated.
Questions also remain about whether state regulators will be required to adhere to such measures.
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