Retailers move against betting in Brasilia while still seeking conclusive data

Sports betting houses, also known as “bets”, have caused concern among Brazilian retail entrepreneurs. Although there is still no precise figure for how much the growth of these games affects the consumption of food and other items sold by retailers, entities in the sector are moving to seek restrictions on this practice in the National Congress, in Brasília, and support from the Executive on the issue.

Magazine Luiza CEO Frederico Trajano said at a Banco Santander event that he does not see any impact on retail sales from Brazilians’ spending on betting in the so-called “bets” in the short term. However, he understands that this spending is growing “exponentially” in the country and, therefore, the Institute for Retail Development (IDV) recently raised the issue with Vice President Geraldo Alckmin.

While the IDV is taking steps in research and starting dialogues with authorities, the Brazilian Association of Supermarkets (Abras) has already indicated more specific paths. The institutional vice-president of the association, Marcio Milan, said that the institution has joined companies such as Unilever in supporting a Proposed Amendment to the Constitution (PEC) that restricts the advertising of betting houses, the so-called ‘bets’. Federal deputy from Ceará Luiz Gastão (PSD) is the one who has been collecting signatures to file the proposal.

Abras also stated that it has provided “clear and ethical” guidance to companies in the food retail sector to be “rigorous in the selection of marketing agencies and influencers”. A fundamental criterion in the selection process is that these professionals must not be associated with gambling.

Milan said there are still no figures that directly link weaker consumption in supermarkets and the growth in spending on gambling, but that Abras has been seeking more data on the subject. For him, the topic should gain more clarity in the coming months.

Research on the topic so far indicates an increase in Brazilians’ bets on their family budget and estimates the impact on consumption, although there is still no conclusive data. A study by the Locomotiva Institute indicates that in classes C, D and E, part of the money that used to be directed to savings (according to 52% of respondents) or bars, restaurants and delivery services (according to 48% of respondents) is now used for bets. Purchases of clothes and accessories (according to 43% of respondents) and cinemas, theaters and shows (according to 41% of respondents) have also lost resources for bets.

A study by PWC, in turn, showed that with growth of 89% per year between 2020 and 2024, it is estimated that R$40 to R$50 billion will be spent on sports betting in 2023. According to the study, betting already represents 1.38% of the family budget in classes D and E, compared to 0.27% in 2018. In the average family budget, it represented 0.73% in 2023, a number that corresponds to 4.9% of what is spent on food (whereas this proportion was 1.5% in 2018).

Data from the Brazilian Society of Retail and Consumption (SBVC) in partnership with AGP Pesquisas shows that 63% of those interviewed said their income was compromised by the habit of gambling, especially in online games: 23% stopped buying clothes, 19% stopped going to the supermarket and 11% stopped spending on health care and medication.

“We still don’t have a precise figure for how much spending on bets reduces consumption. This is one of the things we’re going to look into in more depth at IDV. We want to have robust data like the ones we’ve presented to talk about the need for tax equality with cross-border imports,” says IDV president Jorge Gonçalves.

For him, it is clear that the increase in spending on betting affects consumption, but the institute should also point out issues related to public health, food safety and access to credit. Jorge also states that the institution should study tax issues, since online sports betting houses are taxed at around 12%, while products that can cause addiction, such as alcoholic beverages, have rates of up to 60%.

According to Mauro Toledo, director of Strategy& (PwC’s strategic consultancy), despite the lack of clear figures on the impact of betting on consumption, the reality is that consumers do not have a portfolio for each expense. “If they spend more in one category, they have taken more from another. Sports betting is a recent phenomenon in Brazil, which has been growing very quickly and already represents a significant portion of household spending (especially low-income households). It is difficult to say what exchanges each household makes, but it is quite clear that the exchange is occurring to a certain extent – ​​whether from the numbers or from the statements of consumers themselves,” he states.