The Rio de Janeiro State Public Defender’s Office (DPRJ) has filed a lawsuit against 43 companies operating Brazilian online sportsbooks.
The civil action, announced July 20, alleges the unlawful omission of information about the addiction risks involved with sports betting.
The DPRJ’s Consumer Defense Center (Nudecon) filed the lawsuit seeking R$300 million (approximately USD 53.7 million) in penalties from the industry.
The watchdog also calls for “urgent measures to ensure greater consumer safety and greater transparency on the part of these companies,” according to a translation of the press release.
The DPRJ demands that the industry install:
- Betting limits
- Platform blocks based on usage time
- Alerts in cases of repeated betting, especially during the early morning hours
- A dashboard with detailed information about the user’s betting history
‘Responsible’ Gambling is Dangerous
In the Brazilian sportsbook lawsuit, the DPRJ requests that online sports betting companies be required to clearly and conspicuously warn users about gambling harm.
The consumer watchdog also wants a ban on the phrase “Play Responsibly” in advertising campaigns. According to the DPRJ, the message is “vague and insufficient.”
In the U.S., online gambling platforms and regulators use similar phrases such as “Gamble Responsibly” and “Responsible Gaming.”
The World Health Organization has also criticized the advertising slogan on public health grounds.
So-called responsible gambling puts the onus on the user and not the product designed to be addictive.
Brazil Gambling Sites Sued
The lawsuit named 43 companies operating online sports betting platforms.
The defendants include some of the most popular brands in Brazil, such as Betano, Bet365, Pixbet, Esportes da Sorte, and MrJack.bet.
The DPRJ requests that the gambling operators be “jointly and severally liable for collective moral damages” of R$300 million (USD 53.7 million).
According to the watchdog, the sum represents 1% of the R$30 billion in monthly betting transactions (handle) in the country (not just the State of Rio de Janeiro).
Should the state government prevail in the lawsuit, the money would fund prevention and treatment of gambling addiction.
Betting Isn’t an Investment
The Rio de Janeiro State Public Defender’s Office condemned betting as a way to make money.
“Many people view gambling as a kind of investment, with the idea that there will be a return, which is a completely misguided notion, the result of a lack of financial education and misleading advertising,” said Public Defender General Paulo Vinícus Cozzolino Abrahão.
He compared the gambling industry to the tobacco sector:
“We need to raise this awareness. It’s the same movement that occurred with cigarettes in the 1990s, and today there is a collective awareness that smoking is not beneficial to health. The issue must be addressed with utmost speed and seriousness. That’s why the Public Defender’s Office introduced these measures to protect consumers.”
The Brazilian sportsbook lawsuit seeks to regulate online gambling like cigarettes.
Brazil Sports Betting Debt
According to public defender Luciana Telles, coordinator of the Consumer Defense Center, gambling addiction in Brazil has risen to alarming levels.
The government has seen increased demand for debt relief.
“In all areas of consumer law, this is a hot topic,” Telles said. “We’re seeing this increase not only in the Public Defender’s Office, but also in Procons and other consumer protection agencies. We believe the filing of the [civil action] is necessary as a way to seek collective and structural protection so that consumers are aware of the risks involved in [betting], which can generate dependency and should not be confused with a form of investment.”
The DPRJ also stated that gambling debt hits Brazil’s most vulnerable hardest. The group called online sports betting an “illusory promise of easy money.”
The Consumer Defense Center assists individuals struggling with debt, including those whose debts are related to online gambling.
Parallels with U.S. SAFE Bet Act
The U.S. online sports betting industry has run amok, with betting addiction rates soaring in recent years.
The proposed federal SAFE Bet Act, whose authors also reject the dangerous “responsible gaming” advertising slogan, would install stronger guardrails.
Like the State of Rio de Janeiro, the SAFE Bet Act seeks limits on betting customer losses.
Broadly, the U.S. legislation seeks greater consumer protection, similar to the Brazilian lawsuit against sportsbooks.
Time will tell whether the U.S. can reform the out-of-control betting industry.
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