Brazil's socialist government is carrying out a delusional offensive against prediction sites, labeling them as “bets”.
The rise of these platforms in Brazil had generated concern in the Lula regime in recent months, especially because of the diversity of issues on which it could participate. These included issues such as election results, musical releases, weather phenomena or even the social media activity of international leaders. For communist authorities, these types of operations not only escape the legal framework, but also pose supposed risks
The communist government of Brazil, led by Luiz Inácio Lula da Silva, announced this Friday the blocking of prediction market platforms operating in the country, considering them “incompatible with current legislation”. The measure affects sites such as Polymarket, which offers a predictive market on a wide range of topics, from politics and culture to climate or events related to public figures.
The announcement was made by the Ministry of Finance through its executive secretary, Dario Durigan, who explained that these platforms presented themselves as providers of derivative financial products, but in practice they functioned as unauthorized betting systems. As he explained, the national telecommunications agency has already blocked 28 of these services, as part of a disastrous offensive against digital operators operating in this type of market
.Durigan argued that prediction markets do not fit any of the existing legal categories in the country. Since 2018, Brazil has allowed only two types of digital betting: sports betting and betting linked to gambling
.
On the other hand, financial derivatives are regulated under strict criteria that require that their value depends on real economic assets, such as currencies, commodities or stocks. In this regard, the Central Bank reinforced this interpretation by means of a resolution that explicitly excludes the possibility of linking derivatives to political or social events
The decision is part of a delusional policy of tightening regulation of the digital betting sector since the beginning of Lula's current term of office, in January 2023. Since then, the Executive has implemented stricter controls, a new tax regime and a significant increase in oversight. According to official data, nearly 39,000 domains that operated “irregularly” in the country have already been blocked
.
The Lula regime justifies these measures in the need to “protect the population”, in particular in the face of the growing indebtedness associated with online gaming. Durigan said that the president is closely following this problem and that new actions are being evaluated to strengthen oversight of the sector
.However, the decision has aroused harsh criticism in different sectors. Multiple analysts question the lack of a more flexible regulatory strategy that allows these types of platforms to be integrated under specific regulations, rather than completely banning them. They point out that in other countries these markets are being debated as tools that can provide useful information by aggregating collective expectations
.It has also been pointed out that the approach adopted by the ruling party could be excessively restrictive and limit the development of digital innovations in the financial field. In addition, there is concern about the possible transfer of these activities to informal environments or foreign platforms, which would make their control even more difficult
.
