Battle Being Fought Over Brazil Gambling Bill

December 15, 2021
The leader of Brazil’s Chamber of Deputies is pushing to quickly pass a sweeping new bill to regulate casino-resorts, bingo halls and all forms of online gambling, but is struggling to overcome stiff opposition from evangelical lawmakers.


The leader of Brazil’s Chamber of Deputies is pushing to quickly pass a sweeping new bill to regulate casino-resorts, bingo halls and all forms of online gambling, but is struggling to overcome stiff opposition from evangelical lawmakers.

Speaker Arthur Lira placed a resolution to trigger an urgent floor vote on Bill no. 442/1991 at the top of the Chamber’s voting agenda for both Monday evening and Tuesday, but the measure was never actually brought up amid strong pushback from anti-gambling deputies affiliated with religious groups.

The bill itself is the product of the special committee that Lira established in September to revive a dormant legislative proposal and draw up a definitive regulatory framework for a gambling market that is currently restricted to traditional lottery games and horseracing.

After Lira showed his hand this past weekend to fast-track a vote on the committee’s proposed bill, evangelical groups swung into action by publicly declaring their opposition and pledging to no-show in order to ensure that not enough voting members would be present during Monday evening’s congressional session.

Speaking on the Chamber floor, the head of the Brazilian Congress’ Evangelical Front said its members and others were “desperately opposed” to the bill.

“And we are going to obstruct it here until we tear it down,” added deputy Cezinha de Madureira of São Paulo State.

The 13-member congressional working group formed by Lira in September held a series of meetings with industry and government officials throughout September, October and November as it crafted its 66-page bill, which was published in full on Friday.

Under the updated version of bill 442/91, a newly created federal regulator would oversee competitive licensing processes for six specific forms of gaming and betting: casino games; bingo; jogo do bicho numbers games; fixed-odds bets; horse race bets; and games of skill.

Each of the games could be offered in both “physical and virtual establishments”, enabling Brazil to establish an online gambling market consisting of all product offerings.

Revenue from all forms of online gambling would be taxed at a headline rate of 25 percent, with a lower 20 percent rate applied to physical gambling activities.

The proposal’s author, Deputy Felipe Carreras, told colleagues on Monday evening it was a myth that gambling is strictly prohibited in Brazil since lotteries and fixed-odds betting have already been legalized and some 450 international websites such as Entain’s Sportingbet were available in the country 24 hours per day.

“The key question is: who benefits from the illegality of gambling?” asked Carreras of Pernambuco State in northeastern Brazil.

Carreras’ bill retains some provisions from an earlier version of the same measure that was similarly passed out of a special gambling committee in 2016 before stalling on the Chamber floor.

The new bill would permit up to 31 casino-resorts across Brazil, with one in each state, up to two in Rio de Janeiro and Minas Gerais, and three in São Paulo.

Additional casinos could also be permitted in special tourist zones subject to future designation by federal officials, provided they are at least 100km away from a larger casino-resort.

Among various other provisions, the 66-page bill also would:

  • Allow for licensing of online casinos seemingly as part of the same process to license integrated-resort casinos.
  • Permit an undefined number of bingo halls with federal authorities later able to establish limits on their number in specific regions of the country.
  • Establish a central register and annual fee for all permitted gaming machines and require machine content to be at least 70 percent local to Brazil.
  • Repeal a 2018 lottery law on fixed-odds sports betting and instead authorize the activity as a form of gaming, denying states the ability to operate sports bets through their lotteries.
  • Require registration of all players and ban bonuses, gambling on credit or junket operations.
  • Establish new criminal penalties for illegal gambling and require ISP and financial transactions blocking of unregulated websites.

Carreras told fellow deputies that gambling was a matter of urgency as Brazil “needs to generate jobs and opportunity”, with as much as R$20bn or US$4bn in annual revenue at stake.

“It’s essential to formalize those that are in the unregulated market and attract investment, generate employment and generate tax revenue,” Carreras said.

It remains possible that Lira’s resolution to fast-track the gambling bill will be brought up for a vote this week or next, but even if it is approved by a majority of lawmakers, the bill itself would be subject to another vote on the floor to actually pass the Chamber of Deputies.

Without an urgency request, the gambling measure would have to be vetted by various congressional committees and take a lot longer to move through the lawmaking process.

Opposition to the broad gambling bill is not limited to the Congress’ lower house.

President Jair Bolsonaro a few months ago pledged to oppose any gambling measure passed by Congress, insisting that lawmakers would have to override his veto should they wish to pass legislation. On Monday, evangelical leaders declared that they had spoken with the President and been reassured he opposed the latest bill.

Another fundamental obstacle was also underlined last Thursday when a Senate committee held a public hearing on a much narrower proposal to limit gaming to just one casino-resort in each state.

Factions within Brazil have long been divided over a casino-only or much more encompassing approach to gambling expansion, with proponents of the latter model having blocked past legislative efforts limited to casino-resorts.

Congressional activity is not the only front for Brazilian gambling expansion heading into 2022, however.

More than a dozen states, including São Paulo, Rio and Amazonas, are preparing to create or expand lottery operations within their jurisdictions in line with a landmark federal Supreme Court ruling of September 2020. As things stand, Brazilian federal law appears to allow for states to authorize fixed-odds sports betting as a permitted lottery activity, in addition to draw and instant games plus potentially iLottery.

Meanwhile, a federal regulatory regime for fixed-odds sports betting should also become a reality next year with or without new legislation.

In December 2018, fixed-odds betting was legalized as part of a broader lottery reform measure passed by Congress and Brazil’s Ministry of Economy is now entering the final 12 months of a four-year window to adopt implementing regulations for both retail and online sports betting.

The chief lottery official in the economy ministry recently hinted that officials would soon be revealing details of the forthcoming licensing or concession process and gave the same message last week in an interview with Brazilian newspaper Valor.

Gustavo Guimarães suggested that Brazil’s sports-betting market could kick off limited to online bets initially, with restricted hours for advertising and minimum qualification criteria among matters currently being discussed.

Guimarães told Valor that baseline regulations could be established long before the December 2022 statutory deadline, with independent market observers expecting to see regulations even before the Carnival holiday in late February.

“Regulation evolves naturally,” Guimarães said. “What I say is it’s better to release a regulation that may have certain points that will need to be perfected later, but is still clear enough for everybody so that the market will be able to start functioning.”

Guimarães also said federal officials were discussing a potential new concession process for so-called Lotex instant lottery games, with the possibility that incumbent state-owned national lottery operator Caixa Econômica Federal could be permitted to participate this time around alongside industry partners.

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