As Brazil prepares to vote in a tightly contested presidential election on Sunday, a mounting household debt crisis has emerged as a key concern for many voters amid broader political turbulence. Over 80 percent of Brazilian families are currently in debt, a record high, according to the National Confederation of Commerce. This financial strain is compounded by Brazil’s benchmark interest rate, the highest among 40 major economies, leading families to allocate nearly 30 percent of their income to debt repayments—significantly more than the roughly 11 percent seen in the United States.

Unlike in other countries where mortgage debt dominates, Brazilians’ indebtedness largely stems from credit cards, payroll loans, and retail installment plans, which carry some of the highest interest rates globally. Interest rates on revolving credit cards can exceed 400 percent annually for borrowers who miss payments, intensifying the financial burden on many households.

In the final days of the campaign, incumbent President Luiz Inácio Lula da Silva introduced a controversial measure aimed at curbing the crisis: an immediate ban on online gambling. Legalized in 2018 and one of the world’s largest markets by size, Brazil’s online betting sector has grown rapidly and is widely viewed as a driver of rising debt. Brazilians lost approximately $7 billion to licensed gambling platforms last year, with heavy advertising saturating public spaces and prominent sponsorship of national sports teams, particularly during events such as the recent World Cup.

Critics of the ban, including Lula’s right-wing rival Flávio Bolsonaro, have dismissed the move as a last-minute political tactic unlikely to resolve the deep-rooted debt problem. Some opponents have also warned that the measure could cost the government billions in annual tax revenue and threaten sponsorship revenues for professional soccer clubs. Industry groups argue the ban undermines free enterprise and could have lasting negative effects on the national sports economy. Bolsonaro, while opposing online casinos, has voiced support for sports betting and attributed the worsening debt conditions to failures in Lula’s administration.

Supporters, including public health experts and social activists, contend that unchecked gambling has contributed to addiction, increased pressure on the public health system, and widespread social harms. Clinics for compulsive gambling report a sharp rise in online gambling addicts, now constituting a majority of patients at some treatment centers. Experts warn that many low-income Brazilians—newly exposed to formal financial services since the pandemic—are vulnerable to predatory lending and high-interest credit, often exacerbated by “buy now, pay later” schemes heavily marketed online.

The ban, which took effect immediately and is set to last up to 120 days pending congressional approval, represents the most aggressive step taken by Lula’s government to date in addressing household debt. The administration has also rolled out debt relief initiatives and capped interest rates on certain loans amid broader economic improvements such as rising wages and declining unemployment.

For many Brazilians struggling with debt, the gambling ban signals hope for relief. Luighor Bittencourt, a former supporter of Bolsonaro’s Liberal Party, described his descent into $400,000 of debt through soccer betting, which resulted in the loss of his home and business and two suicide attempts. Now in recovery and working against online gambling, Bittencourt praised Lula’s decision, viewing it as a necessary intervention to protect vulnerable families facing financial ruin.

As the presidential race draws to a close, the debate over online gambling and debt highlights the broader challenges Brazil faces in balancing economic growth with social protection, offering voters a stark choice on how to address the nation’s deepening financial distress.