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BRAZIL REPORT


The decision to include the service in the PPI portfolio


was discussed during the 13th IBP Board Meeting held on 10 June this year. The current legislation determines that lotteries are an


exclusive public service and the Ministry of Economy is responsible for authorizing or granting its exploitation. Federal Law 13.756/2018 authorizes sports betting to operate, but it is still waiting for a regulation setting important procedures. The preparation of a regulation Decree had been underway since 2019. The Ministry of Economy promoted public consultations to discuss drafts of lotteries regulation. The third and last Public Consultation closed in March 2020, motivated by the change in the service’s exploitation model as a public concession. There is an expectation that regulation of sports betting


may pave the way for the legalization of other types of games, but we have to wait until it is finished to assess its real impact in this whole sector.


Gambling Regulation Background: From 1920 to 1946 gambling was permitted in Brazil and the country had great casinos and job opportunities in elegant


entertainment centres with restaurants, bars, ballrooms, and theatres. In April


1946, President Eurico Gaspar Dutra issued a Decree prohibiting gambling and casinos operation in Brazil. Dutra had political and personal reasons to end gambling in Brazil: he wanted to eliminate all measures implemented by previous President Getulio Vargas (responsible for encouraging the operation of casinos in the country) and he was married to a fervent catholic woman, completely averse to the environment of the gambling halls, casinos and theatre shows. At the time of prohibition, the interdiction had a strong economic effect in Brazilian cities that lived mainly from tourism based on gambling, such as Petrópolis, in Rio de Janeiro and Poços de Caldas and Lambari, in Minas Gerais. Currently, even with the express ban on the exploitation of gambling, Brazil deals with its illegal practice, mostly in houses where bingo and betting machines are operated.


Legislative Proposals: There are today two main bills of law being discussed in Congress to try to implement and regulate gambling in Brazil: Bill 442/1991 from the House of Representatives and Bill 186/2014 from the Senate. Both Bills legalize gambling and allow casinos to operate in Brazil, but there are relevant differences between the two proposals with regards to investment and business opportunities that would come out of their approval into law. Despite the difference in the legislative process and


status of the bills in both chambers of Congress, there are groups of congressmen pushing forward or obstructing the advance of the theme. As an example of the strength of the group in favour of the legalization, in May 2019, a Joint Parliamentary Caucus for the approval of a Regulatory Framework for Games in Brazil was installed.


Small steps were taken, but there was no compromise


between both houses to approve the bills or guarantee guidelines to the text. On the bright side, it means this is an excellent opportunity for foreign companies to share their best practices and engage in a debate to help set the new standard in Brazil and explore this market. Our assessment is that the regulatory benchmark has to


contemplate legal, social and political defences, based on minimum standards, including clear rules for the gambling operation defining the permitted games, tax rules, financial traceability and protection against money laundering, prevention of gambling addiction, compliance rules, and international control mechanisms. It is very important to engage and actively participate in


the process of opinion-making to a better design of a regulatory framework. Depending on the interests that will prevail, the result may be a fair, compliant legal environment or not.


The Interministerial Committee for opportunities in the tourism sector: On May 14th, President Bolsonaro issued Decree n. 10.349/2020 adding to the Government Program for Investment Partnership a group to assess policies for attracting private investments to the tourist industry aimed at the development of new business ventures on this sector and making use tourist, cultural and natural Brazilian resources. One of the purposes is to have an Interministerial Committee establishing priority for investments and assessing regulatory alternatives to encourage and promote private investment, providing legal assurances to the players, and analysing possible socioeconomic impacts. This Interministerial Committee is composed by some nominee member of the Ministry of Economy, Tourism, and Environment. Those appointed agents are responsible for assessing the opportunities for the tourism segment which represents a great convenience to engage with the public authority to lobbying for the inclusion of some great investments, as casinos and gambling legalization. Researches on this option have already been made by those public offices, a topic considered at the beginning of Bolsonaro’s government in 2019 by political


actors from the Legislative and Executive branches. This Interministerial Committee has been meeting periodically for about a month and the project decisions will be studied by the Government Program for Investment Partnership. One of the topics under discussion is licensing of integrated resort casinos, enabling the casino activity as additional offering by the resorts, which are expected to be implement until 2023. In a macro-political landscape, we observe a group in


favour of legalizing gambling activities and others against it, but available to discuss and adjust points-of-view according to market demands.


Political and economic scenarios: The political and economic scenarios around the legalization of gambling modalities in Brazil also have those in favour and those against its advance. The


SEPTEMBER 2020 21


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