Brazil Places Major Bet On Gambling Expansion

February 24, 2022
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In an historic vote, the lower house of Brazil’s Congress passed a sweeping gambling expansion bill late on Wednesday night to legalize land-based casino-resorts, video-bingo operations and online gaming across the country of more than 210m people.

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In an historic vote, the lower house of Brazil’s Congress passed a sweeping gambling expansion bill late on Wednesday (February 23) night to legalize land-based casino-resorts, video-bingo operations and online gaming across the country of more than 210m people.

After a heated floor debate lasting almost four hours, the Chamber of Deputies voted 246 to 202 to pass Bill no. 442/1991 that was first introduced more than 30 years ago, but was given a new lease of life last year by a special commission formed to study gambling regulation in Brazil.

Speaking before the vote, bill author Felipe Carreras said his colleagues had the chance to “make history” and urged them to recognize that gambling is already part of Brazilian culture, even though Brazil and Indonesia are the only G20 member countries without a regulated market.

Online gambling is today available throughout Brazil every hour of the day, with no protections to prevent access by children, said Carreras, a federal deputy from Pernambuco state.

“We cannot close our eyes to this,” Carreras said. “We have to see the opportunities that Brazil is losing.”

Deputies Going All-In On Gambling Expansion

Brazil’s current legal gambling market is limited to traditional national lottery games and betting on horse races, although fixed-odds sports betting was also legalized through a lottery law passed three years ago and is in the process of being regulated.

As amended and passed on Wednesday by the Chamber, Bill 442/1991 would establish a national regulatory framework for a wide range of gambling activities under oversight of the Ministry of Economy.

The bill would authorize 31 integrated-resort casinos with a minimum of 100 hotel rooms — one in each state, two in Rio de Janeiro and Minas Gerais, and a third in populous São Paulo.

Additional casinos would also be permitted in designated tourist regions, provided they are not within 100km of a full casino-resort, and up to three floating riverboat casinos could also be authorized to operate on the Amazon and other major Brazilian rivers.

Casino licenses would be awarded through a public tender process, or “leilão”, and no company could operate more than one casino in each state.

Elsewhere, bingo would be authorized at standalone bingo halls, horse racetracks and sports stadiums with a minimum capacity of 15,000.

Brazilian municipalities could host one bingo hall for every 150,000 residents, meaning more than 80 halls could be opened just in the city of São Paulo alone.

Each bingo hall could also offer up to 400 video-bingo machines, with the Ministry of Economy required to establish regulations for bingo within a maximum of one year of the bill becoming law.

The traditional numbers game of jogo do bicho would also be legalized for the first time, with one licensed operator for every 700,000 residents of each state.

Unlike an earlier iteration that was published last week, the bill would not repeal the sports-betting provisions of a December 2018 lottery law, which would remain in force.

Fixed-odds betting is not covered by the bill because the federal government already has authority to regulate that activity and is in the process of doing so, said Carreras, the bill’s rapporteur.

“Here we are going to authorize, regulate and collect taxes from all forms of online gaming. Today there are 3,000 betting sites, with online bingo, online casino, even Big Brother is being bet on through digital platforms,” Carreras said.

The latest version of Carreras’ bill offers little detail on online gaming, however, and would merely grant the economy ministry authority to establish “specific regulations” for online casino and bingo games.

The bill would also require the ministry to regulate “games of mental skill” — presumably including poker and fantasy sports contests — within a period of 90 days.

All gambling operations would be subject to a specific tax of 17 percent of gross gaming revenue, with player winnings of more than R$10,000 subject to a 20 percent tax.

Online gaming operators would have to pay a quarterly licensing fee of R$300,000 (approximately US$60,000) for each site or skin they offer in Brazil, half the amount required of each land-based casino facility but more than ten times the equivalent fee for a bingo hall.

In other notable provisions, Bill 442/1991 would:

  • Prohibit the advertising of unregistered gambling businesses and require Brazilian internet service providers (ISPs) to prevent access to unregulated websites.
  • Mandate the Bank of Brazil to adopt rules to prevent payment processing for offshore sites and ensure all illegal transactions would be cancelled.
  • Require all players to be registered and identified and limit all gambling activities to cashless gaming, with no gambling on credit or junket operations permitted.
  • Establish a central register for all gaming machines and require machine providers to receive 40 percent of revenue, with the casino or bingo operator retaining only 60 percent.
  • Create a national self-exclusion register and establish rules on responsible advertising and anti-money laundering.
  • Repeal a general ban on gambling but criminalize unregulated gambling and establish various new penalties.

Next Stop: Senate

After its formal approval by the Chamber of Deputies, possible amendments to Bill 442/1991 will now be considered by deputies likely later today. The bill will then be sent for consideration by Brazil’s Senate, where its prospects are not entirely clear.

The Senate has considered its own proposals on expanded gambling in recent years but has declined to pass a bill on the floor on at least two occasions since 2015.

Assuming it does not just sit on the Chamber's bill, the Senate will be able to amend the measure and send it back to the lower house, which would have to decide whether or not to accept the changes before passing it on to Brazil’s Planalto presidential palace for final approval.

Brazil President Jair Bolsonaro has on several recent occasions stated his opposition to legal gambling, although there is a suspicion that his stance is a political move to court conservative support in an election year and he would be unlikely to seriously block an effort by Congress to override a veto. Bolsonaro’s chief of staff, Ciro Nogueira, is also the former leading supporter of gambling expansion in the Senate.

Wednesday night’s vote was taken after midnight local time and came only after a motion to block the measure and withdraw the bill from the Chamber’s agenda was rejected by a margin of 243 to 211.

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