Brazil Could Become Largest Regulated Gambling Jurisdiction

As discussed in a previous article by Casino News Daily, Latin America has been drawing more and more attention as a region where gambling may be a particularly profitable industry. Several Latin American countries have been considering the adoption of gambling-friendly regulations that could open their markets to international developers and operators.

Aside from Mexico, which was the main focus of that previous article, it can be said that Brazil is yet another country from the region whose legislators seem to have finally recognized the importance and usefulness of the creation of a regulated gambling environment.

With very few exceptions, gambling is illegal in Brazil under a federal law from the 1940s. However, it has been almost a quarter of a century now that lawmakers have been trying to legalize one form of gambling or another and to create a gambling legalization and regulatory framework that would lift the ban completely.

Brazil’s Gambling Legalization Effort

Both chambers of the country’s bicameral legislative body – the National Congress – have been discussing legislative proposals that would legalize different forms of gambling, including online gaming and sports betting within the country’s borders. However, it can be said that the Senate has made more significant progress with its PLS 186/2014, so that particular legislative piece will be paid more special attention in the current article.

Under the bill, originally produced by Senator Ciro Nogueira Lima Filho back in 2014 as its name suggests, both land-based and online casinos, slot parlors, bingo halls, sports betting options, and the particularly popular lottery-type game Jogo do Bicho (Animal Game) should be legalized within the country’s borders.

A modified version of PLS 186/2014 was broadly discussed last year and was even approved by the country’s Special Committee for National Development. Gaining certain momentum, it was believed that the legislative piece could reach the full Senate floor by the end of 2016 and be voted on one final time. However, the expected final vote did not occur, which means that gambling debates may be renewed anytime this year.

Although the bill has been supported by key lawmakers, it has also been met with staunch opposition. According to opposing legislators, the legalization of gambling services could worsen the country’s economic situation. Gambling was even compared to drugs and alcohol in terms of compulsiveness and harmfulness.

On the other hand, proponents of Brazil’s gambling legalization effort counter-argued that if the local market is regulated, it would draw international gambling companies and additional investment and would generate much-needed tax revenue.

PLS 186/2014 needs to be passed by all chambers of Brazil’s National Congress in order for its provisions to come into effect as law. If signed into law, the bill would create a regulatory framework for the operation, regulation, and taxation of gambling. The new regulatory regime would also feature measures for preventing and combating money laundering and corruption.

Here it is important to note that state-run lotteries, poker, and betting on horse racing are legal in the country, as these are considered activities whose outcome is based on skill and not on luck. Bingo was also declared legal in the 1990s, but was banned in 2007.

Illegal Gambling in Brazil: Facts and Figures

Brazil has been described as the sleeping giant in several publications and in relation to its huge potential to turn into one of the world’s biggest regulated markets. Gambling has already been a big thing in the country. According to the Brazilian Legal Gaming Institute (Instituto de Jogo Legal – IJL), the approximate amount of R$20 billion ($6.4 billion) is generated annually from illegal gambling services. What is more, the Jogo do Bicho market could be worth around R$12 billion ($3.8 billion). In terms of stakes placed, the local market could be valued at around R$55 billion ($17.6 billion), the IJL has noted in a report on Brazil’s gambling market.

As many other gaming options, brick-and-mortar casinos are also prohibited in Brazil. It has been estimated that around 200,000 country residents travel to neighboring Uruguay to gamble at local casinos.

Bearing all the above figures in mind and the fact that gambling is strictly prohibited in Brazil and only conducted illegally, the IJL has suggested that the country annually loses R$6 billion ($2 billion) in what could be contributed to coffers in gambling taxes.

With population of 207.8 million people (World Bank: 2015), Brazil could be the world’s largest regulated gambling jurisdiction. There clearly is big demand for gambling services and given Brazil’s proverbial love for football, sports betting could be a hit in the country. There is also no lack of interest from international gambling companies to enter the region and Brazil, in particular, so it can probably have a happily ever after in a way, in case it legalizes gambling and regulates its market in a manner that would attract investment, entertain and protect customers, and help it derive the maximum benefit from its legalization effort.

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