Bricking it: Brazil’s House of Deputies proposes step forward in online legislation

Brazil, House of Deputies, online, legislation, politics
Share this article
  •  
  •  
  •  
  •  
  •  
  •  
  •  

Brazil’s House of Deputies has proposed another step forward in gambling legislation, with 32 new land-based casino licences on the cards. However, is PL530/2019 a necessary step toward establishing an online market, or another fumble in building effective regulation?

Following the legalisation of fixed odds sports betting in December by departing president Michel Temer, the Brazilian market looks set to receive a further boost through a new casino bill from Chamber of Deputies member Paulo Azi.

Having announced his intention in February 2018 to push through gambling legislation by stripping all consideration of the online sector, the Tourism Committee chair has filed PL530/2019, proposing the regulation of casinos to monetise the country’s gambling market.

“We are dealing with a sector that already exists, is in full operation, and whose expansion is practically impossible to stop,” said Azi. “At present there is no control, regulation or taxation of this industry in Brazil.”
The bill seeks to establish the first land-based IRs in the country, offering ten percent casino space per venue, with each state permitted casino licenses granted in accordance with population.

States counting under 15 million residents will be permitted one resort, those under 25 million two resorts, and those above that figure; three resorts, with state governments overseeing the individual tender processes.

Theoretically, this could create 32 casino licenses, with Sao Paolo the only state eligible for three IRs due to its 45 million inhabitants. Minas Gerais, Rio de Janeiro and Bahia Azi’s own constituency state – would be eligible to award the proposed 30- year licenses to two venues each.

Though a potentially positive step forward for the Brazilian gambling industry, the land-based draft bill drew criticism from fellow deputy Joao Carlos Bacelar, who asked “what is behind this measure?”

The representative stated that slimmed legislation “will produce only 20k jobs in the country,” as opposed to the projected 700,000 jobs created by full vertical approvals, adding he would oppose casino-only legislation until “we know the whole content of the matter.”
The bill is the latest in a much drawn-out process to regulate the “sleeping giant” of Brazil’s gambling market, currently estimated to be worth $13.4bn annually in illegal wagers, bolstered by the small figure delivered by the Caixa Economica Federal-operated state lottery.

Though regulation has been under discussion by the country’s Senate for decades, there remains the key hurdle of legislators being reluctant to speak out on what is nationally considered a moral issue.

Azi’s own constituency state – would be eligible to award the proposed 30- year licenses to two venues each.

Though a potentially positive step forward for the Brazilian gambling industry, the land-based draft bill drew criticism from fellow deputy Joao Carlos Bacelar, who asked “what is behind this measure?”

The representative stated that slimmed legislation “will produce only 20k jobs in the country,” as opposed to the projected 700,000 jobs created by full vertical approvals, adding he would oppose casino-only legislation until “we know the whole content of the matter.”

The bill is the latest in a much drawn-out process to regulate the “sleeping giant” of Brazil’s gambling market, currently estimated to be worth $13.4bn annually in illegal wagers, bolstered by the small figure delivered by the Caixa Economica Federal-operated state lottery.

Though regulation has been under discussion by the country’s Senate for decades, there remains the key hurdle of legislators being reluctant to speak out on what is nationally considered a moral issue.

Temer’s parting gift to the sports betting industry, though indicative of progress, leaves actual regulation to the new Jair Bol- sonaro government, which took office on 1 January, with the Ministry of Finance given four years to implement a legal structure.

Bolsonaro’s record on gambling is chequered, speaking against the process of regulatory bill PLS186/2014 in October, claiming gambling “brings unhappiness to families.”

However, when it comes to legalisation, he added “there is a possibility, I say, of playing for each state to decide. In principle I am against, but we will see what the best way out.”

Temer’s bill, PL846/2018, could deliver the tax revenue Bolsonaro has built his economic election campaign on, however effective regulation that secures forward looking progress development may prove difficult under an indifferent premier.

“The current legislation expressly permits sports betting relating to real world sporting events,” said Neil Montgomery, managing partner of Brazilian law firm Montgomery and Associates.
“This would therefore exclude all forms of esports.”
“The new law also does not expressly revoke letter (c) of par. 3 of Decree-Law No. 3,688/41 (the Criminal Contraventions Law) which puts sports betting on a par with unauthorized gambling (which constitutes a criminal offense under such legislation).”
With the legislative arm of Brazil’s government still loathe to embrace gambling for fear of alienating voters, and thorny language such as the above waiting to catch out unwary regulators, it could well be the substantial tax contributions from a part-regulated market that most effectively drive progress.

Though PL530/2019 will only allow casinos to offer slot and table games, the prospect of the figures raised by a ten per- cent tax on gross revenue is a key impetus for legalisation, with all taxation money divided between the General Fund for Tourism and the National Public Security Fund.

In order to be approved, the bill must secure a majority from both the parliament’s 513 MEPs and 81 Senators, before presidential consideration.
With the bill’s main opponent Bacelar now caught up in separate corruption claims, the bill has a high chance of success, and could see the Brazilian gambling industry take another small step into the 21st Century.


Share this article
  •  
  •  
  •  
  •  
  •  
  •  
  •