Brazil Size of the Illegal Gambling Market
Brazil has the largest illegal gaming sector in the entire region. Gambling has been banned since 1941 when the government passed Decree No.3,688. Under this law, all games of chance are prohibited and considered a criminal offense.
As this law has never been abolished, any type of gaming activity that does not have its own regulations is considered to fall under the Criminal Contravention Act and is therefore a criminal offense. Consequently, underground gambling has thrived. Tis is especially true of the illegal street lottery known as the “animal game” (jogo do bicho). It is believed that the game is so popular today that it matches the federal lottery in terms of revenue. In addition to the animal game, there are around 300 illegal bingo halls, which generate R$1.3bn while illegal slot machines generate an estimated R$3.6bn a year. According to Brazilian Senator Ciro Nogueira, who put a pro gaming bill forward in 2014, the country’s illegal gaming market is already worth around approximately US$18bn. In addition, according to more recent estimates, today illegal gaming could be worth almost double that of the R$11.1bn generated by legal gaming.
Current Measures in Place
Illegal gambling in Brazil has been a long running issue and gambling in Brazil is the most politically charged issue in the region due primarily to the proven links between gambling
P52 NEWSWIRE / INTERACTIVE / MARKET DATA
Outlook
Brazil Market Both bills go as far as allowing for the animal game, which would be put under state supervision. However a wide liberalisation of the market is becoming increasingly unlikely.
During the committee stage a number of serious issues were raised when it came to fears over money laundering with the Public Prosecutor’s office arguing that the size of the industry would overwhelm supervisory bodies. Te Senate bill was thrown out by the House Committee on Constitution, Justice and Citizenship earlier this year while the gaming bill in the Lower House is also losing ground with lawmakers instead focusing on granting licences to around 30 large-scale resort casinos and possibly allowing online gaming as well.
and organised crime. Worth billions of dollars each year, today the animal game is played widely and numbers runners have repeatedly been found to operate bingo halls and offer politicians and local officials bribes in return for closure. Indeed the animal game was part of one of Brazil’s largest political scandals in 2014 when it was revealed that criminals, who had made their fortunes running numbers, had not only become involved in the bingo industry, but were also found to be bribing members of the Workers’ Party and other high-ranking government officials in return for stays of closure and influence.
As gaming law loses impetus ahead of the Presidential election in October it is unlikely that much progress will be made in the near future.
While both bills seek to regulate the industry a far more narrow approach - even if it does find consensus - will only be sufficient to meet a very small fraction of current demand.
Meanwhile, the animal game will continue to be present and could evolve with reports emerging in local press that numbers runners are now openly offering sports betting as well.
Meanwhile, illegal bingo halls, slot machines and illegal gaming will continue to thrive unless the government passes a comprehensive gaming law, which covers all verticals. Tis, however, is looking increasingly unlikely.
Te animal game still regularly makes headlines today with police carrying out large-scale operations across states and breaking up organisations which use the game in order to launder money and sell drugs.
Due to the politically sensitive nature of gaming and the fact that many lawmakers are against gambling on principle there has until very recently been very little impetus for change. However, declining revenues on the back of the current recession have made lawmakers think again and two bills are now under deliberation in the Brazilian Congress.
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