Brazilian Senate Committee on Betting Fails to Pass Report

A Parliamentary Commission of Inquiry (CPI) in Brazil, established to investigate the burgeoning online betting industry, has concluded in disarray after its final report was rejected. The committee, once labeled a “circus” by Senate President Davi Alcolumbre, is the first CPI in a decade to have its report rejected.

The CPI was launched last November to examine the increasing influence of virtual gambling on Brazilian families’ finances. However, it faced significant criticism, including allegations of extortion following an investigation by Veja magazine. Alcolumbre previously denied a request to extend the CPI’s term, dismissing it as a “circus.”

The report, authored by Senator Soraya Thronicke, was rejected in a four-to-three vote. This outcome means that none of the measures proposed by Thronicke will be implemented, leaving the sector facing uncertainty. Recent weeks have seen politicians imposing tax increases and advertising restrictions on the industry.

Despite the rejection, Thronicke intends to submit the report’s findings to authorities such as the Ministry of Finance and the Federal Police.

Key Proposals in the Rejected Report

Thronicke’s report sought to indict 16 individuals, including digital influencers Virgínia Fonseca and Deolane Bezerra, for offenses related to fraud and illegal gambling.

Senator Angelo Coronel, who voted against the report, stated that the report was presented too late to properly analyze its conclusions. “I don’t feel comfortable voting on something I haven’t read,” he explained.

In addition to the indictments, Thronicke proposed 20 bills aimed at mitigating the harms of gambling. These included banning the popular game “Fortune Tiger,” which has been linked to fraud through influencer marketing schemes.

Other proposals included prohibiting beneficiaries of the CadÚnico social assistance program from gambling, and imposing prison sentences of one to four years for non-compliance with gambling advertising regulations.

Furthermore, Thronicke recommended prison sentences of four to eight years and fines for operating unlicensed virtual gambling platforms.

Measures such as limiting daily betting time to three hours and establishing a national self-exclusion program were also rejected.

Reasons for the CPI’s Failure

Senator Eduardo Gomes expressed broader concerns about the effectiveness of CPIs, suggesting they require reform.

“I don’t like CPIs. I think they function incorrectly,” said Gomes. “An effective change is needed in the way they work, or we will have one CPI after another, undermined by their own functioning.”

During its 21 sessions, the CPI heard testimony from only 19 individuals, a small fraction of those summoned. Six invitees failed to appear.

Additionally, only half of the 192 requests for confidential information from the Council for Financial Activities Control were approved.

Senator Eduardo Girão initially indicated he would vote against the report due to the CPI’s conduct, but ultimately approved it due to “interesting measures” regarding betting restrictions. He noted that none of his eight requests were approved, and highlighted the prior allegations of extortion.

CPI President Dr. Hiran Gonçalves responded to Girão, stating: “I don’t accept insinuations. Say the name. It’s bravado. We cannot be vague – when we are vague, we attack people who don’t deserve to be attacked.”

Alternative Opinion Added to Final Report

Senator Izalci Lucas also presented an alternative report, including measures such as banning gambling advertising on radio and television between 6 AM and 10 PM, and making gambling sites and digital influencers jointly liable for damages caused by abusive advertising.

While Lucas’s report was initially registered as a separate opinion, Thronicke added a section to her final report incorporating it.

However, senators only considered Thronicke’s text during the vote, declining to vote on Lucas’s report, believing it was compromised.

Senator Eduardo Gomes criticized Lucas’s report for exposing confidential financial data of individuals under investigation.