A new bill introduced to the Brazilian Senate last week hopes to regulate and tax gambling in the country, including sports betting, casino and bingo products.
Apart from a handful of government authorised horseracing, poker tournaments and lotteries, gambling is currently outlawed in Brazil. However until recently international betting sites had been able to operate there under a Brazilian law that made all online transactions subject to the law in the jurisdiction in which a site was licensed.
But since April, when the country passed an Internet Bill of Rights meaning all transactions were subject to Brazilian law and giving the state the authority to block unruly websites, this has no longer been the case.
Nevertheless it is estimated illegal gaming in the country could be worth BRL$18bn a year with as many as 8.6 million Brazilians playing. It is suggested that legalisation could contribute BRL$15bn to the state treasury annually.
Senator Ciro Nogueira of the opposition Progressive Party and who authored and introduced the bill said: “[The bill would] legalise what exists today even if it is hidden, establish clear and objective requirements for those interested to explore the world of gambling and at the same time contribute to the creation of thousands of workplaces.”
He emphasised that Brazil were among the minority of United Nations and World Tourism Organisation members in their stance towards gambling, stating it was time for the country to “comply with the rest of the world and boost the economy with new tax revenues”.
Nogueria’s legislation proposes a 10% tax on gaming revenue, 7% of which would be taken by the federal government and the remaining 3% of which would be taken by the province in which the operator is licensed.
The bill calls for the creation of a state-controlled gambling market where the states and Federal District would be responsible for licensing, regulating and supervising both land-based and online gaming within their territories.
Operators would have to meet requirements surrounding technical capacity, tax compliance and financial viability.
They would have to guarantee their financial stability with a capital of BRL$5,000,000 (approx. $2,300,000).
Norgueria said that he firmly believes legalising gambling could significantly aid the country’s struggling economy, explaining that the potential BRL$15bn in gains would be double what Brazil earns in taxes applied to cigarettes and drinks together.
He continued to add that the legislation will allow Brazil to take a firm hand with rogue operators, stating that companies operating there without a licence could face a fine and up to four years in prison.
He said that those who accept underage players will also risk being sentenced for a minimum of three months and a maximum of one year.
Finally he said that the legislation is necessary because a “prohibitive approach to gambling does not work, as the truth is that no one will ever give up playing only because it is forbidden”.
The bill, which was first drafted in May, was submitted to the Committee on Regional Tourism Development at the Brazilian Senate on 9 June.
Before approval it will have to pass through several more committees, including the Economic and Justice Affairs Committee, the Committee on Constitution and the Justice and Citizenship Committee.
If approved, international operators will have to act quickly in order not to miss out on a significant market.