In the context of the Brazilian government intensifying the regulation of gambling promotions, BetMGM's legal affairs chief Eduardo Ludmer warned that a complete ban on influencers participating in gambling promotions could backfire, exacerbating the expansion of the illegal gambling market.
In May this year, the Brazilian Senate passed a series of tighter measures targeting gambling marketing, among which the most controversial was the prohibition of operators using influencers for advertising promotions. This measure stemmed from a series of recent incidents, including a parliamentary investigation (CPI) triggered by influencers' involvement in gambling promotions. For instance, the Chief of Police in Alagoas, Lucimério Barros Campos, accused influencers of misleading consumers, and CPI reporter Soraya Thronicke advocated in her final report to prosecute two well-known influencers, Virgínia Fonseca and Deolane Bezerra, for charges including fraud and illegal gambling activities.
Although the final report was rejected and did not succeed in pushing for criminal charges or a ban on the controversial game "Fortune Tiger," this round of public and political storm prompted the Senate to continue pushing for stricter advertising restrictions, including a complete ban on influential public figures participating in gambling promotions.
In this regard, Ludmer expressed concerns. He pointed out that this "one-size-fits-all" approach might weaken the market penetration of legal gambling platforms, instead pushing users towards unregulated, irresponsible illegal gambling platforms. He warned, "If we restrict legal operators from using influencers, a significant channel, then illegal platforms might exploit regulatory gaps, dominating public discourse and capturing user attention."
However, Ludmer also acknowledged that legal gambling companies must take on higher responsibilities when using influencers for promotions. He emphasized that in promotional activities, operators should see influencers as a key medium to distinguish between compliant and illegal platforms, enhancing public awareness through transparent and responsible information dissemination.
"Gambling is not an investment behavior, but a form of entertainment, which needs to be conveyed through proper guidance," he added, "If there are clear regulatory guidelines and effective supervision mechanisms, influencer advertising can completely become a window for the industry to showcase transparency and responsibility."
Ludmer cited data released by the Brazilian Institute for Responsible Gambling, stating that about 78% of Brazilian users struggle to distinguish between legal and illegal gambling sites. Faced with this reality, he believes that the focus of regulation should be on guiding users into compliant channels, rather than simply suppressing all forms of marketing.
BetMGM's concerns also reflect the anxiety of the entire industry. In addition to advertising restrictions, the Brazilian government also plans to raise the gambling tax rate to 18% of total gambling revenue (GGR), which represents a significant cost burden for the newly legalized market.
According to data from H2 Gambling Capital, currently about one-third of gambling activities in Brazil still occur on overseas platforms, indicating that the black market is still rapidly infiltrating.
"If the regulatory goal is to achieve a healthy and sustainable market, then a balance must be struck between tax policy, product attractiveness, and effective crackdown on illegal activities," Ludmer concluded. "Only in such an environment can the real transformation of users from illegal to legal platforms be achieved."
