Brazil iGaming In The Balance Ahead Of Chamber of Deputies Vote

December 15, 2023
Gambling industry experts have expressed disappointment and surprise that virtual casino games were struck from the version of an online betting bill approved by Brazil’s Senate on Tuesday.

Gambling industry experts have expressed disappointment and surprise that virtual casino games were struck from the version of an online betting bill approved by Brazil’s Senate on Tuesday (December 12).

“I think that even the government was expecting the bill’s approval with iGaming,” said Rafael Marchetti Marcondes, chief legal officer at fantasy sports operator Rei do Pitaco and legal director of Brazilian betting industry association IBJR.

Marcondes was speaking at a Vixio GamblingCompliance webinar on the future of gambling in Brazil on Wednesday.

“They know that's very important for them in terms of revenues, and consequently, taxes,” Marcondes said.

Part of the rush to approve Bill 3626/2023 before the end of this year has been the government's desire to include revenue from online gambling taxes in the 2024 budget.

Marcondes said there was confusion around Tuesday's Senate vote, and that some senators accidentally voted against keeping iGaming in the bill when they had been vocal advocates.

Luiz Felipe Maia, founding partner of São Paulo law firm Maia Yoshiyasu, added that several senators who had confirmed they would vote in favor of including online gaming did not show up for the vote on the Senate floor.

This was despite it being clear that it would be a close-run vote, given vocal opposition to online casinos from a group of anti-gambling senators following the addition of iGaming to the lower house bill in September.

“It's not the time to find who to blame. I think we have lessons learned in terms of political articulation, and being ready for these kinds of movements,” Maia said.

Online casino provisions can be reinserted into the bill before it becomes law, because the Chamber of Deputies must vote again to decide which of the Senate's 42 amendments to the bill that were approved in September should remain.

The coming days will see a rush for the Chamber to approve the bill and get it signed by President Luiz Inácio Lula da Silva before the congressional break that starts December 22 and ends in February.

Maia told webinar attendees that the bill will be treated with urgency, for budget reasons, but that there is no guarantee the lower house will take up the legislation again over the next week.

Udo Seckelmann, a lawyer at Rio de Janeiro firm Bichara e Motta, told Vixio in a separate interview that the chances of the bill being signed by Lula before the holidays is greater than 50 percent, but that this was impossible to predict with certainty.

Much lobbying and political horse-trading is expected before all is said and done, Marcondes said.

He said he was “very optimistic” that Bill 3626/2023 will once again include iGaming when it is approved by the Chamber of Deputies.

After all, he said, it was the Chamber that inserted online casino games into the bill in the first place, while the lower house has shown itself to be more open to expanding gambling than the Senate when it recently approved a wider bill for casinos, bingo and online gaming.

“I do believe that this rejection from the Senate can be changed, but it's not going to be a very easy task. A lot of negotiation will be involved in that, you can be sure of that. So let's see.” 

At the end of the day, it will be Chamber of Deputies president Arthur Lira, arguably the most powerful man in Brazilian politics, who will wield the biggest influence.

Seckelmann said there are contrasting views on whether Lira will put iGaming back into the bill, adding that he included it in the first place after lobbyists said licence applications would plummet without online casinos.

What is certain, Seckelmann said, is that if virtual casino games are not included in the sports-betting bill, then the passage of Bill 442/1991, which proposes to legalize essentially all gambling in Brazil, will be accelerated. 

That bill remains in a Senate committee, having been approved by the Chamber of Deputies in February 2022.

Other focal issues after the Senate's vote on Tuesday include an amendment that would require facial recognition technology to verify player identity.

Although fraud is a significant issue in Brazil, Maia said it makes little sense to mandate specific technologies in legislation instead of deferring to the regulator.

Maia and Marcondes also noted a Senate amendment requiring sports-betting licence applicants to be at least 20 percent owned by a Brazilian enterprise or investors.

The lawyers said they expected that provision, if maintained in the final bill, to be challenged on constitutional grounds.

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