INSIGHT LATIN AMERICA FOCUS: BRAZIL
The bill in detail Casinos
According to the text, casinos may be installed in resorts as part of an integrated leisure complex that must contain at least 100 high- end hotel rooms, meeting and event venues, restaurants, bars and shopping centres. Te physical space of the casino must be, at most, equal to 20 per cent of the complex’s built-up area, and electronic and roulette, card games and other authorised modalities will be permitted. In order to determine where casinos can be opened, the Executive Branch must consider the existence of the tourism industry and the economic and social potential of the region.
Te text authorises the installation of casinos in tourist centres or integrated leisure complexes, under the limit of one casino in each state and the Federal District, with the exception of São Paulo, which may have up to three casinos, and Minas Gerais, Rio de Janeiro, Amazonas and Pará, in which the limit for each state is two casinos.
According to the proposal, gaming houses will also be able to operate on sea and river vessels. One establishment for each river measuring 1,500 km to 2,500km in length; two for each river with a length between 2,500km and 3,500km; and three per river with a length greater than 3,500km. Tese vessels may not be anchored in the same location for more than 30 consecutive days. Tere can be for up to ten establishments of this type.
Each economic group may hold only one licence per state, and licensing will be carried via a public bidding process which be decided on the technical and financial bids put forward by potential operators. Te casino must demonstrate a minimum paid- in share capital of R$100m and may be allowed to operate for 30 years.
Bingo halls
Te law also permits municipalities and the Federal District to licence bingo halls. Bingo halls will also be allowed in stadiums with a capacity of over 15,000 spectators. Bingo halls must be located in places with a minimum area of 1,500sq.m, where up to 400 video bingo machines can also be located, but slot machines will be prohibited.
Only 1 bingo hall will be accredited for every 150,000 inhabitants in the municipality where the establishment will operate, in accordance with the regulations. In municipalities with less than 150,000 inhabitants, only 1 bingo hall will be accredited. Licenses will be granted for 25-years and will be renewable for an equal period. In addition, the bill defines rules for electronic and card bingo. Bingo operators must have a minimum paid- in capital of R$10m.
Jogo de Bicho
For the legalisation of the street lottery Jogo de Bicho the text requires that all the licensee’s records be placed online and that the government can access in real time financial data via a newly created System of Audit and Control (SAC). An estimated 20 million Brazilians bet daily on Jogo do Bicho. Accreditation will be for a period of 25 years, renewable for an equal period if the requirements are met. Tere may be, at most, one operator of this game for every 700 thousand inhabitants of the state or Federal District. In those with less than 700 thousand inhabitants, there can only be one accredited licence holder for the animal game. Te accreditation for the exploration of the "Jogo do Bicho" game must be limited to the territorial limits of each State. Operators must have paid in capital of R$10m.
Horse racing
Horse racing may be operated by tourism entities accredited by the Ministry of Agriculture, which may also be accredited to operate, at the same time, bingo and video bingo games.
per cent increase in the current 214,000 tourism-related jobs if gambling is legalised, along with a growth of 1.2 per cent in tourism’s contribution to the Gross Domestic Product (GDP). Currently, according to Sobral, the tourism sector represents just eight per cent of GDP.
For many years the Brazilian Institute of Tourism (Embratur) has also been pushing for large scale casinos and the institute has come out in support of other bills that would allow for land based expansion. Te ex President of Embratur Gilson Machado defended the opening of integrated casinos in Brazil in order to boost tourism and create jobs claiming on one occasion that American groups had already said that they would invest more than US$15bn in Brazil should the country give gaming the green light.
Te Federation of Commerce of Goods, Services and Tourism of the State of São Paulo (FecomercioSP) an entity that represents the interests of businesses in the commerce, services, and tourism sectors in the state of São Paulo, has also come out strongly in support of the bill. According to FecomercioSP the legalisation of gambling in Brazil,
With the legal operation of casinos and other types of gaming, Brazil could raise around R$74bn per year, in addition to R$22.2bn in taxes and R$6.7bn in grants the organisation says. Regulating casinos in Brazil would have a significant positive impact on the local economy and adjacent sectors as well. It could stimulate
infrastructure development, create jobs, and generate opportunities for local businesses. In addition the demand for products and
services by casinos would boost the local supply chain, strengthen regional tourism, and contribute to economic growth beyond tax revenue and job creation.
Taxation
According to the proposal, two new taxes will be created and must be paid by licensed gaming and betting operators: the Gaming and Betting Inspection Fee (Tafija) and the Economic Intervention Contribution levied on the commercialisation of games and bets (Cide-Jogos). Te forecast is that Cide-Jogos will have a tax rate of up to 17 per cent on the gross revenue of gambling companies.
Te bill’s potential impact
During the public hearing Carlos Henrique Sobral, from the Ministry of Tourism addressed one of the key issues of the bill: namely how casinos would impact tourism. Brazil has been stagnant at the same annual number of six million international visitors. Sobral argued that casinos could boost the sector. Te federal government estimates a 20
including casinos, bingos and Jogo do Bicho would have a huge impact on the economy overall. FecomercioSP estimates that the legalisation of gambling could generate 658 thousand direct jobs and 619,000 indirect jobs, diversifying the economy and offering new job opportunities.
With the legal operation of casinos and other types of gaming, Brazil could raise around R$74bn per year, in addition to R$22.2bn in taxes and R$6.7bn in grants the organisation says. Regulating casinos in Brazil would have a significant positive impact on the local economy and adjacent sectors as well. It could stimulate infrastructure development, create jobs, and generate opportunities for local businesses. In addition the demand for products and services by casinos would boost the local supply chain, strengthen regional tourism, and contribute to economic growth beyond tax revenue and job creation.
WIRE / PULSE / INSIGHT / REPORTS P99
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