Brazil Gambling Expansion Back On The Agenda

September 22, 2021
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A new special commission formed in Brazil’s Chamber of Deputies is the latest sign of momentum returning for long-stalled legislation to regulate casinos, bingo halls and online gambling in one of the world’s largest untapped markets.

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A new special commission formed in Brazil’s Chamber of Deputies is the latest sign of momentum returning for long-stalled legislation to regulate casinos, bingo halls and online gambling in one of the world’s largest untapped markets.

A special working group on gambling regulation was established earlier this month by Chamber speaker Arthur Lira, just a few days before the tourism committee in the lower house of Brazil’s Congress last week held the first formal legislative hearing on expanded gaming since the pandemic.

A sweeping bill to legalize up to 32 casino-resorts plus hundreds of bingo halls, online gambling and video gaming terminal operations in bars and other locations was passed out of a Chamber of Deputies committee in mid-2016 but never brought up for a vote on the floor.

Lira, a congressman from Alagoas state who was elected Speaker in February, is reportedly in favor of expanded gambling and even wants to see a revised bill voted out of the lower house before the end of this year, according to the Globo news agency.

The new working group is made up of 13 deputies who will have a period of 90 days to review pending legislation and craft their own proposal to be considered by the full chamber.

The group met for the first time last Thursday at the behest of Deputy João Carlos Bacelar Batista, a long-time advocate for gambling expansion who chairs both the new gambling panel as well as the Chamber of Deputies’ permanent committee on tourism.

“I believe the time is right to encourage and liberate this activity,” Bacelar said last week.

“Gaming, travel and tourism are all interconnected, and we are going to grease this legislation so that it can be approved as soon as possible. Those of us in the working group are united. Brazil can only win.”

Aside from marking the return of gaming to the congressional agenda in Brasilia, last week’s public hearing hosted by the Chamber of Deputies tourism committee appeared to break little new ground in the debate over expanded gambling in Brazil, while highlighting at least one lingering challenge that has stymied progress in previous years.

Two witnesses from the Legal Gaming Institute lobbying group and Brazil’s Institute for Tourism, Cultural, Sports and Environmental Development both argued that legislation must encompass both large and smaller casinos plus bingo and online gambling, among other verticals, to maximize job creation, tax revenue and other economic benefits.

But an advisor to the Brazilian Resort Association advocated only for casinos as part of integrated resorts, albeit with no limit on their number per state as has been proposed in earlier bills in Brazil’s Congress.

Meanwhile, any new legislative proposal will also have to overcome opposition from evangelical members of Congress who have immediately reacted with skepticism to the claims that a bill could be approved by the Chamber of Deputies within a matter of weeks.

“We have the most conservative Congress in 30 years; the votes aren’t there for approval,” Rio de Janeiro federal deputy Sostenes Cavalcante told Globo this week, adding that he and fellow evangelical lawmakers would be lobbying key ministers in the administration of President Jair Bolsonaro to “demonstrate that the harm from the legalization of gaming is much greater than the potential revenue.”

Action At Senate, State Level

In addition to activity in the lower house of Congress, there is the prospect of legislative discussions resuming in Brazil’s Senate.

Two separate bills to authorize integrated-resort casinos have been introduced in the Senate since 2019, with some recent disagreement among senators about which of them should be considered first or whether they should be combined into one measure.

A broader gambling bill encompassing casinos and bingo was also approved by a Senate committee in 2016 before being rejected by another panel two years later amid opposition from evangelical senators.

One reason for optimism now is the fact that the author of that Senate bill, former Senator Ciro Nogueira, resigned a few months ago to become Chief of Staff to President Bolsonaro in a role that directly entails working with Congress to pass legislation favored by the administration.

Congress remains very busy with matters related to the pandemic but the discussions on gambling expansion “have been developing steadily,” Luiz Felipe Maia, partner at FYMSA Advogados law firm in Sao Paulo, told the VIXIO GamblingCompliance podcast last month.

“I think if we have some time off [addressing the pandemic] we have some very mature discussions on the casino front,” Maia said.

The discussions in Congress over casinos and other forms of gaming expansion are just one front as Brazil transitions away from having one of the most limited legal gambling markets in the non-Islamic world.

Brazil’s Ministry of Economy expects to soon release a request for proposals from advisors to help implement a licensing or concession regime for fixed-odds sports betting in accordance with a December 2018 law, Waldir Eustáquio Marques Jr., the ministry’s undersecretary for lotteries, told the Chamber of Deputies tourism committee last week.

Waldir Jr. added that officials hope for a regulated sports-betting market to launch before the end of next year.

Meanwhile, Waldir Jr. said the ministry is also in the process of “remodeling” a concession process for instant lottery or “Lotex” games, after a consortium of IGT and Scientific Games two years ago backed away from a bid for a 15-year exclusive license.

At state level, at least 16 states, including São Paulo and Rio de Janeiro, are either expanding or creating their own lottery operations in response to a landmark Supreme Court ruling last year that granted states and municipalities equal rights as the federal government to conduct approved lottery games such as numbers draws, instant lotteries and sports betting within their jurisdictions.

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