THE GAMBLING MARKET IN BRAZIL

Gambling and online gambling: what is already legal and what are the perspectives for this huge Latin American market.

Gambling in Brazil had a short life of legality. The liberation of the game happened only in the 1920s and its peak was in the following decade when big casinos were opened as a way to promote tourism in the country. In its golden age, Brazil had 70 casinos employing 50,000 employees.

In 1946, then president Eurico Gaspar Dutra sanctioned gambling in public spaces. The law prohibited this industry in private dwellings, hotels or businesses and associations nor establishments intended for the exploitation of gambling. Overnight gambling became illegal in Brazil. Since then, the only type of game allowed in Brazil is betting on federal lotteries, monopolized by the Federal Savings Bank (Caixa Econômica Federal), state lotteries and betting on horse racing within racetracks.

In 1993 president Itamar Franco sanctioned the so-called "Zico Law" that legalized the opening of bingos by sports entities with the sole purpose of raising funds for the promotion of sports in the country. In 1998, the so-called "Pelé Law" authorized bingos by any commercial establishment throughout the federal territory. Several bingos were opened in the country, but in 2000 President Fernando Henrique Cardoso revoked the previous law until December 2001.

The legality of online betting in Brazil

Laws that prohibited gambling in Brazil from the 1940s were never modernized to include the use of internet for the purpose of online gambling; by taking advantage of this loophole to circumvent legislation, online betting was never technically prohibited nor illegal. Even though there were no type of restrictions provided by law, the online gambling operator’s sites are based in countries where gambling is legal, thus wagers are placed in foreign territories; this way it is technically not criminal to bet online in Brazil.

In December 2018 then President Michel Temer provisionally sanctioned Measure 846 after endorsement by the National Congress and the Senate legalizing online gambling. Now it is up to the Ministry of Economy to draft specific rules for granting the right to exploit this type of gaming and stipulate how licenses are to be issued to companies. This was a rather quick move considering the fact that so far other bills trying to legalize gambling and regulate online gambling have always been delayed in Congress.

Sport federations and committees will start to receive funds directly from the federal government after approval of MP 846, without having to go through the Ministry of Sports. It was defined that the sport resources should be applied in programs and projects to encourage, develop and maintain the sport.

The entire international gambling community is looking to Brazil with great anticipation, both betting operators and other gambling bodies, since the adoption of this law can be an important first step towards legalizing other games.

The main online betting sites that accept Brazilian players are Bet365, Sportingbet, Betboo and Betfair. There are many others, but these are the most popular and widely used sites in the country.

Current scenario of gambling in Brazil

The Brazilian government's new vision to accelerate the economy saw a great opportunity in the gambling sector to generate employment and raise additional taxes, given the great success that online gambling already had among Brazilian players. According to the newspaper "O Globo" the Brazilian government fails to collect about USD 800 million in taxes due to the non-regularization of this market.

Within the Brazilian National Congress there are two projects to legalize gambling, one in the Senate and another in the Chamber of Deputies. The Senate bill is called "Senate Bill number 186," approved by the Special Committee on National Development in November 2016, who seeks to broaden the range of legalized gambling in Brazil. The Chamber of Deputies work on "Regulatory Framework of the Games in Brazil" that authorizes casinos, “jogo do bicho” and bingos approved in August 2016.

It has always been noted that the laws prohibiting gambling never fully succeeded in Brazil, which currently accounts for more than USD 5 billion per year through informal and online betting (sports, i-Gaming and poker). Brazil has an average of 8.7 million people betting online with a profit of more than USD 200 million a year in the hands of companies that exploit i-Gaming in Brazil.

Other advantages of legalizing gambling in Brazil would be greater transparency in the market, curb the manipulation of results and include the possibility of betting sites sponsoring Brazilian clubs, thus increasing their profits.

Brazil's current president, Jair Bolsonaro, who took office in January 2019 stated that he intends to legalize gambling and sports betting during his administration. Both gambling and sports betting would be regulated by the Ministry of Economy, which could authorize or license any company that would like to offer this service in both physical and virtual environments. In addition, it would be up to the Ministry to indicate how licensing would commence and the amount of duties these companies will need to pay in order to operate within the Brazilian territory, whether in physical establishments, such as casinos or online.

Foreign entrepreneurs in the industry, such as millionaire Sheldon Adelson, have already announced investing in casino projects throughout Brazil. He has already met with the mayor of Rio de Janeiro, Marcelo Crivella, to announce two major projects in the city and one more in the city of São Paulo. Municipal and state officials are also pressing the new president for the rapid approval of this legalization. The BetConstruct site has stated that it expects these laws to be adopted in the first half of 2019, anticipating that Brazil will quickly become its largest market in Latin America and one of the largest in the world.

SOURCES

* BNL Data. Será que os jogos de azar vão ser legalizados no Brasil?

* Código de Bonus. A legalidade das apostas esportivas no Brasil.

* Correio do Brasil. Aumenta a pressão para Bolsonaro liberar jogos e cassinos em todo país.

* Jusbrasil. A proibição do jogo de azar no Brasil.

* Games Magazine. O Brasil vai se tornar o maior mercado da América Latina. O céu será o limite para o país.

* Games Magazine. O que muda com a aprovação da lei que legaliza as apostas esportivas no Brasil?

* Games Magazine. Sheldon Adelson aguardar legalização para construer dois resorts com casino no Brasil.

* SporTV. MP 846 passou na Câmara, o que isso representa?