Brazil to propose steps to block use of benefits for online bets

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BRASILIA (Reuters) – Brazil’s Social Development Ministry said on Friday that a working group will propose measures by next week to stop people using their social benefit payments for online gambling.

President Luiz Inacio Lula da Silva’s Bolsa Familia, a more than 20-year-old scheme, provides direct cash transfers to the poorest households at an annual cost of 168.6 billion reais ($31.04 billion), or 1.5% of Brazil’s GDP.

A recent central bank report showed 5 million people from beneficiary households sent 3 billion reais to online gambling companies using the Pix payment platform in August, with a median expenditure of 100 reais per person.

This means that around 20% of the Workers’ Party program’s monthly budget was spent on betting online. Bolsa Familia supports 21 million families, with an average benefit of 685 reais per month, official data shows.

“We are working on alternatives. One of them is a zero limit on the use of social benefits, like Bolsa Familia, for gambling or betting,” Brazil’s Social Development Minister Wellington Dias said in a video distributed to journalists.

“And we are considering a control mechanism based on tax ID numbers to implement the necessary measures,” he said, adding that a proposal to amend the rules will be submitted to Lula.

Dias said that the average amount spent is significant and contrasts with Bolsa Familia’s purpose, which is to ensure funds for food and basic family needs.

Earlier on Friday, central bank chief Roberto Campos Neto said at an event that the bank’s report aimed not to “demonize” Bolsa Familia but to serve as a warning, showing that lower-income groups are spending a lot of money on betting.

“This is happening, and it’s happening at a fast pace, which could compromise the income of these lower-income households at some point,” he added.

($1 = 5.4316 reais)

(Reporting by Marcela Ayres; Editing by Alexander Smith)