Breakthrough For Brazil Gambling Expansion

December 17, 2021
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Brazil took a key step toward passing a sweeping gambling expansion plan when lawmakers on Thursday approved a resolution to fast-track a heavily amended bill to regulate casino-resorts, bingo halls and online gaming, although a final vote in the Chamber of Deputies will not be held until February.

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Brazil took a key step toward passing a sweeping gambling expansion plan when lawmakers on Thursday approved a resolution to fast-track a heavily amended bill to regulate casino-resorts, bingo halls and online gaming, although a final vote in the Chamber of Deputies will not be held until February.

Deputies voted 293 to 138, with 11 abstentions, to approve a resolution to treat Bill no. 442/1991 as an urgency measure, making it eligible for a final vote on the floor at any time and enabling it to bypass further committee reviews among other steps in the lawmaking process.

Chamber Speaker Arthur Lira had been trying to pass the measure since Monday but Thursday (December 16) denied reports he was finally able to do so only by pacifying evangelical opponents through an agreement to also stage a vote on an unrelated bill to exempt certain churches from property taxes.

Although the gambling bill could have been voted on immediately following passage of the urgency resolution and the bill itself was later formally debated by deputies, Lira made clear that a final vote would instead be held in the first week of February following the congressional recess that begins next week.

The bill will be subject to further amendments, Lira said, “with enough time so that it can maturate and be debated, so we can take note of those who want to regulate gaming, those who do not want to regulate gaming, what are the causes and effects, and what is good and bad.”

Thursday’s initial vote was still an important proof of life for a sweeping gambling expansion bill that had been laying dormant for the best part of five years until Lira established a special commission to explore the matter in September.

There are signs that the proposal itself remains in flux, however, with several notable changes in the text that was presented to the Chamber of Deputies late on Wednesday night from the draft that Lira’s special commission published last Friday.

The latest version of the bill would continue to authorize up to 31 casino-resorts in Brazil, with one in each state and additional resorts in more populous regions such as São Paulo and Rio de Janeiro.

However, the 52-page proposal no longer allows for further casinos at existing tourist venues and establishes specific limits on resorts such as minimum hotel rooms and other required amenities.

The latest version also now incorporates more specific details for bingo halls, which would be permitted in each of Brazil’s 5,570 municipalities.

Cities would be allowed to host one hall for every 150,000 residents, with each bingo hall also eligible to house up to 400 video-bingo machines. In the city of São Paulo alone that would equate to more than 80 bingo halls and some 32,000 video-bingo devices. Video-bingo would also permitted at larger sports stadiums and at racetracks.

One curious provision of the current version of Bill 442/1991 would appear to require the providers of electronic gaming machines in bingo halls and casinos to receive 40 percent of their revenue, with only 60 percent going to the casino or bingo owner.

For online gaming, the bill simply grants authority to the SECAP lottery department within the Ministry of Economy to establish future regulations in the area.

Unlike the version from last week, the proposed bill would no longer alter an existing federal lottery law of December 2018 that legalized fixed-odds sports betting.

The updated measure would also no longer require licensing of skill games such as fantasy sports or poker.

Having been removed from earlier drafts of the measure, the traditional numbers game of jogo do bicho is now back in the bill, with a newly established federal gambling regulator empowered to issue licences limited to each state.

Gross revenue from all gambling activities would be subject to a tax of 17 percent, with any daily player winnings of more than R$10,000 (approximately US$1,750) subject to a winnings tax of 20 percent.

With expanded gambling receiving widespread media coverage in Brazil this week, Thursday’s congressional session saw both proponents and opponents speak passionately about the issue.

Speaking on the Chamber floor, the author of the proposal on behalf of the special commission noted that among G20 countries only Brazil, Indonesia and Saudi Arabia do not regulate casino gaming.

Meanwhile, online casino games “are in the palm of every Brazilian’s hand”, through their mobile phones, said Felipe Carreras, a federal deputy from Pernambuco State in northeastern Brazil.

“Just think about how these online betting sites, these 457 sites, are profiting with paying a cent [in taxes]. I repeat, they don’t pay a single cent,” said Carreras.

The bill rapporteur added that money launderers would not target a regulated gambling industry because anonymous play would be prohibited, while problem gamblers already exist in Brazil and they would be better protected through a national exclusion system and other mechanisms.

“God willing, next year, widening this debate, we will create employment and opportunity for Brazilians through gaming and betting and do what the leading countries in the world do,” Carreras said.

If passed by the Chamber of Deputies early next year, Bill 442/1991 would then have to be approved by the Senate where at least three alternative bills to regulate casino-resorts or wider forms of gaming are already being considered.

In the meantime, officials led by SECAP are separately taking the final steps to implement Brazil’s 2018 sports-betting law, with regulations expected in early 2022 and some kind of licensing system due to be established before the Qatar FIFA World Cup.

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