Brazil's Online Betting Surge Sparks Debt Crisis as Users Turn To 400% Loans (yahoo.com)
- Reference: 0175476657
- News link: https://news.slashdot.org/story/24/11/15/1450236/brazils-online-betting-surge-sparks-debt-crisis-as-users-turn-to-400-loans
- Source link: https://finance.yahoo.com/news/gamblers-pay-400-loan-rates-113019317.html
The surge in online betting has doubled Brazil's gambling population to 52 million in six months, with the central bank estimating monthly gambling spending between 18-21 billion reais ($3.1-3.6 billion) through August 2024. Central Bank President Roberto Campos Neto said lower-income families are disproportionately affected, with 20% of government social program payments in August directed to online gambling sites.
The Finance Ministry has accelerated regulatory measures, requiring over 100 betting companies to submit operating paperwork ahead of schedule. New rules starting January 1 will allow authorities to limit bet amounts, block payment systems, and monitor for money laundering. President Luiz Inacio Lula da Silva recently raised concerns at the UN about gambling's impact on Brazil's poorest citizens, while officials are moving to ban credit card use for betting and restrict gambling advertisements.
[1] https://finance.yahoo.com/news/gamblers-pay-400-loan-rates-113019317.html
Hold on... (Score:2)
What kind of idiot loan company thinks lending to gamblers will result in getting their money back? Because they won't. It doesn't matter what the interest rate is, they're going bankrupt. Is property seizure really expedited in that country or something?
Re: (Score:2)
Maybe it's so high because they know that only a small % will be able to pay it back?
markers are at 0% for 30 days max but after if you (Score:2)
markers are at 0% for 30 days max but after if you don't pay!
Re: (Score:2)
They're loaning to people on the dole. They just need to wait for the next month's cheque to arrive before squeezing them for as much of it as they can. It's not any different than credit card companies in the U.S. or other western countries that charge much less exorbitant rates, but will gladly collect the minimum monthly payment from now until a person dies.
Who? What? Why? (Score:3)
I'm baffled by all parties involved in this. The 438% rate makes sense, as the liability for lending to known gamblers has to be absolutely batshit insane. The chances of payback must be well above the gamblers threshold. It's almost like the loans are being offered by gamblers themselves. It's gambling all the way down. Good grief.
And who would take a loan at that rate for any reason? I get gambling addiction is a thing, but even so you'd think some part of the brain would go, "I'd have to quadruple my money just to pay back the loan I took to make the bet. What are my chances?" That's not even gambling at that point. That's guaranteed failure.
People do not make good decisions (Score:2)
under duress. TV makes us think that they do because we see the cool guy cut the right wire and win the day.
So you get people saying "If I can just win this one gamble I can get out ahead of everything".
It's not rational, but again, people under pressure don't think and act rationally. In the real world bomb disposal is done by robots and even then you've got an engineer with years and years of training who do hundreds if not thousands of simulations.
Re: (Score:2)
> So you get people saying "If I can just win this one gamble I can get out ahead of everything".
It worked for James Bond in Casino Royale, so why not?
ok if you fix the match we will wipe out your loan (Score:2)
ok if you fix the match we will wipe out your loan!
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And who would take a loan at that rate for any reason?
The same people who use a check cashing firm rather than having a bank despite the large cut taken out of each paycheck. They'll be poor forever since they lose so much money every time they cash their check.
Re: (Score:2)
These are the people who failed [1]the marshmallow test [wikipedia.org].
[1] https://en.wikipedia.org/wiki/Stanford_marshmallow_experiment
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It's not really "lending to gamblers", they are not giving money with the explicit purpose of it being used for gambling and such (nobody would be crazy enough to do that).
In Brazil, credit cards are used as a way of financing not only current expenses (let's say a trip, your daily shopping, etc.) but also in place of small loans (those are not very common), and used to buy appliances, pay a unexpected bill that you cannot afford with your standard income, etc. This model leads to a huge problem with unpaid
Re: (Score:2)
> The issue is rather complex: you have a mix of economic disadvantage, social inequality, lack of financial education and predatory practices.
Sounds like home (USA). Or at least, the path we seem to be slaloming toward.
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Why would people vote for a business man who failed to run a casino to lower inflation?
Why would people think lowering inflation would set prices back to what they used to be?
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People are stupid.
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Indeed. This last election was a choice between "Slight course correction," or "Blow up the ship." We decided to blow it up. What kind of people decide to blow up their own ship while they're on it?
Give them time (Score:3)
Just give them more time. They're certain they'll win it all back eventually. Given enough chances.
Let's drink bleach again / like we did last summer (Score:2)
"Let's legalize gambling! What's the worst that could happen?"
"I dunno, what about all the things that happened last time gambling was legal?"
Happily not my issue (Score:2)
My addictions don't include gambling - or alcohol - for which I am very grateful. But I recognise they are powerfully destructive in many people's lives, and we need to work out how to reduce the harm that this causes. to the victims, most commonly the other members of the family. All suggestions welcome!
Re: (Score:1)
Public education and subsidized (when not corrupt) treatment programs really help.
Re: (Score:2)
Just let the shady monster types that give out these loans beat the hell out of the degenerate gamblers who take them in public. As long as no one is losing fingers our puking up a spleen it should be fine. I think that's maybe the only kind of education program that might work, because the only thing I really recall about the educational programs that were targeted at my generation when we were young and in school is that it just made us want to try cigarettes or other drugs more. Short eliminating all bla