Brazilian article warns betting ban could cut public security funding
Regulation2 min read
In brief
- An article by João Henrique Martins says Provisional Measure 1.394 compromises planned public security funding in Brazil.
- It says security funds stay at R$1.1bn instead of reaching R$3bn to R$7bn a year.
- The Public Security PEC passed the Chamber of Deputies and is still before the Senate.
An article by João Henrique Martins concludes that Provisional Measure 1.394, which prohibits legal sports betting, compromises the funding planned for public security in Brazil. According to the article, the measure also undermines the viability of the Ministry of Public Security promised by the re-elected government.
The article says that, without legal betting, public security funds stay at the R$1.1bn invested in 2025, instead of reaching R$3bn to R$7bn a year as the Public Security PEC was designed to deliver. It describes the measure as having cut the largest of the funding sources.
The Public Security PEC passed the Chamber of Deputies with 487 votes in the first round and 461 in the second. The text is still being considered in the Senate. According to the article, the proposal gives constitutional status to the Susp, the Unified Public Security System. The article says the Chamber chose earmarked revenue to fund it, by enlarging the share of the oil social fund and the share of the online betting tax and by securing the allocation of assets seized from illegal betting operators.
The article estimates that, had the rule applied in 2026, security funds would have received R$3.3bn in betting fees up to October and a further R$1.2bn from seizures. It adds that police operations have already located more than R$12bn circulating in the illicit betting market.
The article argues that prohibitions do not eliminate established demand, citing electronic cigarettes as a parallel. It says that, although banned, they reached 8.8% of Brazilians over 14, according to Lenad 3, in a market estimated at R$8bn to R$16bn a year. The associated tax revenue foregone is put at R$5bn to R$14bn a year, based on data from Fiemg and a study by Esem-USP and Ipsos. The article presents Denmark as a counterexample, saying it raised the regulated share of online betting from 38% to 91.5% by combining licensing and blocking. It also says the United Kingdom charges a levy on legal operators to fund the prevention and treatment of gambling addiction.
The article calls for legal provision for the betting market to be reintroduced under regulation that includes controls on gambling addiction, treatment funding, a tax earmarked for security funds, immediate forfeiture of illicit assets and a unit in each operator to track the illegal market. It says the states account for 85% of national public security spending, while 94% to 97% of their budgets are already committed to salaries, running costs and pensions. Martins is described as a specialist in criminal economics and a researcher at Esem (IRI-USP).