How advertising regulation can help combat the betting epidemic

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How advertising regulation can help combat the betting epidemic
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How advertising regulation can help combat the betting epidemic
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Family debt, billion-dollar expenses, addiction on the rise. Brazil is racing against time to reduce the damage caused by the unbridled growth of online betting, bets. Regulation of the sector, online advertising and sponsorships from betting sites are just the time of a game that the country has already started to lose.

Survey carried out by the Central Bank shows that the monthly transfer volume via Pix for betting companies varied between R$18 billion and R$21 billion over the last year. Bolsa Família beneficiaries alone sent R$3 billion to bets in one month. The consultancy PwC points out that 40% of bettors are from classes D and E. Bets already represent 38% of Brazilian families' spending on culture and leisure.

Another study shows that Brazilians spent R$68 billion on betting sites and online casinos, and earned R$44.3 billion. In other words, a loss of almost R$24 billion. The numbers were collected by Itaú Unibancowhich also estimated that the online betting sector accounts for 0.2% of the Gross Domestic Product (GDP).

Research by Instituto Locomotiva reveals that 86% of Brazilian gamblers have debt. And sports betting and online casino companies continue to invest heavily in the country. “Brazil dug the well and now we are starting to go down”, says researcher and psychologist Altay de Souza.

To avoid hitting bottom, the country will have to act quickly. Last week, the Ministry of Finance announced the regulation of betting, which would only be carried out at the beginning of 2025. Now, as has already happened with cigarettes and alcoholic beverages, the focus is on advertising.

It is estimated that the online betting sector will have invested between R$5.8 billion and R$8.8 billion in marketing in Brazil between 2023 and 2024 – which is equivalent to between 50% and 75% of total betting revenue . If advertising is a priority for the growth of online gambling games, it is also a priority when it comes to protecting the audience.

According to data from Kantar Mediabetween January and August this year, bets invested R$2.3 billion in advertising on radio and television. Since last year, the segment has been the largest advertiser in the country.

WE ARE NOT THE ONLY

Brazil is not the only one dealing with the explosion in betting. In Australia, the number of sports bettors has doubled in the last five years and a third of spending on these sites is made by people addicted to gambling. Faced with this scenario, the Australian parliament began a process to ban advertising for gambling and betting sites.

The country's Senate made one of the first official studies which, in fact, indicate that banning betting advertising has positive effects. In the document, the scenario drawn is of a generation devastated by gambling addiction. Banning advertising would mean protecting children.

Bets already represent 38% of Brazilian families' spending on culture and leisure.

In France, it is prohibited for big sports stars and influencers to advertise sports bets. Taken last year by the French government, the decision was called the “example rule”: celebrities who could serve as an example to younger people are banned from betting advertising.

In the United Kingdom, where betting is regulated by its own government body, there was a ban on the use of credit cards for betting – a measure that Brazil replicated in the current regulation. In British lands, betting extends to non-sporting events. There, parliament is discussing charging companies a fee to pay for the treatment of gaming addicts.

PLEASE DO NOT SMOK

Among international references, Brazil can serve as an example for Brazil. The country is recognized by the World Health Organization (WHO) as a global model in the fight against tobacco. In the mid-90s, almost 30% of the Brazilian population smoked. In 2006, the number fell to 15.7% (today, it is less than 10%).

During this period, two laws restricting cigarette advertising were approved. The first, in 1996, limited advertising on radio, television and magazines. The second, approved in the late 2000s, was more aggressive: it prohibited the broadcast of tobacco advertisements, as well as prohibiting the sponsorship of cigarette brands at sporting and cultural events.

In 2001, Brazil was the second country in the world to adopt image warnings on cigarette packaging.

In the view of experts, online betting needs to be treated in the same way. “The regulations for betting need to be the same as for cigarettes,” says NewVegas CEO, Ian Black. The Minister of Finance himself, Fernando Haddad, stated that the government has this objective.

Tigrinho’s Game (Credit: Reproduction)

Until now, however, actions against gaming addiction have not resembled the fight against smoking. In January, the National Advertising Self-Regulation Council (Conar) approved the Annex Xa series of rules for sports betting advertising.

The guidelines deal with responsible betting, aimed at people over 18 years of age. Furthermore, there is a recommendation that betting companies not associate advertising their services with getting rich quick or success. Bets are also required to issue a warning about gaming addiction.

For professor and coordinator of the social communication course at Fundação Armando Álvares Penteado (FAAP), Eric Messa, this is a start that should lead to advertising in the sector becoming increasingly regulated, as is the case with the pharmaceutical industry.

Messa, however, does not believe that betting will be regulated like the tobacco sector in the short and medium term. “More studies will still need to be carried out to demonstrate how this business causes harm to society”, says the professor.

It is estimated that the sector will have invested between R$5.8 billion and R$8.8 billion in marketing in Brazil between 2023 and 2024.

In the 1990s, health professionals and associations lobbied to support a ban on cigarette advertising. Hospitals such as the National Cancer Institute, the Brazilian Cardiology Association and the Brazilian Medical Association participated in public hearings. Searches on the impact of the advertising ban on reducing tobacco consumption were used to support the regulation.

This situation is not repeating itself in discussions about online betting. Survey of Folha de S.Paulo showed that, to create the “responsible gambling” rules, the Ministry of Finance met 251 times with betting companies and only five with health professionals.

“If we need doctors to reduce cigarette consumption, now we need psychologists to be listened to”, says Altay de Souza.

NO NAME IN MY STADIUM

According to the Brazilian Society of Retail and Consumption (SBVC), 63% of bettors even committed their household budget to betting. Online games are divided into two types: casinos, such as the Tigrinho game, and sports betting, such as bets.

According to Souza, the stimuli in the brain are similar in both cases. Bets tend to be more dangerous for the public, says Altay, as they give the illusion that there is some control on the part of the bettor.

The football fan thinks he can predict the outcome of the game. “Advertising in the game makes us natural, it starts to become common to look at the bets”, says Altay.

Arena Fonte Nova, in Salvador, is now sponsored by Casa de Apostas (Credit: Reproduction/ Instagram)

The Premiere League, the English football championship, banned betting sites on team shirts. In Brazil, 33 clubs came together against a proposal that would prohibit bets from sponsoring sports teams. Bookmakers sponsor 19 of the 20 clubs in Series A in 2024, in sponsorship contracts worth more than R$630 million, a value 89% higher than in 2023.

The advancement goes beyond sponsorships. Betting companies bought the “naming right” of stadiums such as Arena Fonte Nova, in Bahia, and Arena das Dunas, in Rio Grande do Norte. They also sponsor Brazilian championship games and television programs, such as Big Brother Brasil.

In this sense, there are already bills to prohibit sponsorship of clubs, sporting and cultural events, such as PL 3,563/2024, proposed by senator Randolfe Rodrigues (PT-AP). The document is being processed in the Senate.

IT'S NOT JUST ADVERTISING

For João Branco, advisor to the Brazilian Association of Advertisers (ABA) and former CMO of McDonalds, the conversation is not just about marketing, but about the business model. “What is the limit of what a ‘game of chance’ can do?”, he asks.

Brazil was the second country in the world to adopt image warnings on cigarette packaging.

Even with all the advertising warnings, online gambling can be designed to make people consume more and more. How to ensure that services are responsible? At the moment, a large part of the industry uses the discourse of financial education, placing the onus on users to use the system correctly.

“Responsible gaming” also depends on the transparency of the system. If the person playing does not understand how the algorithm that dictates the probability and amount of winnings works, how could they make an informed decision?

Even with financial education and transparent information for everyone, there is still another factor: the negative impact on the brain. “If a person understands that smoking is bad, it can still damage their lungs”, compares Altay.

It's time for Brazil to stop smoking. Again.


How advertising regulation can help combat the betting epidemic

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