BRAZIL REPORT
On the matter of the infrastructure required for the construction and operation of casinos, the bills under discussion share different approaches, one with a more complete and comprehensive regulation and another with illustrated details. The new legislation enforces that they must operate in integrated resorts with high requirements imposed on gamblers. The House Bill establishes important requirements as far
as gambling surrounding infrastructure, such as a minimum number of hotel rooms, commercial, meeting, convention, sports, recreation and dining areas, clubs, and space to accommodate the machines. However, the Senate Bill does not establish such
requirements and allows for a few companies operating the casinos to provide this entire infrastructure (hotel infrastructure, restaurant, convention area, shows, and concerts). IR Infrastructure and casino rules are in the current draft of the bills, and adjustments and revisions may be made during the assessment by both houses under legal and political provisions within the legislative process. Under discussion is the establishment casino operation
hubs as gambling centres. Imposition on the creation of hubs may be important since the demand would be concentrated in certain locations as opposed to some types of games that face great resistance (such as the “jogo do bicho” – lottery with animal figures game), to spread quickly throughout the national territory. In a competitive aspect, this can be faced as a casino
entrance barrier, but it is important to attract the right investments and companies. It is possible to advocate with lawmakers’ provisions for regional tax incentives and differentiated taxation for the development of those regions directly affected by the casino hubs. Those hubs may also expand the tourist potential of some Brazilian regions, like the Northeast. Major players have already shown interest in investments and projects aligned with the Government to raise the level of tourism in Brazilian regions. Gambling provides a differentiated type of tourism, in which Brazil is very interested. And tourism is one of the priority development agendas for this Administration.
On other hand, there is a big concern from private
investors that the Tourism Ministry may allow only one casino (as an integrated resort) to operate in Brazil, in only one city. This would be prejudicial to the legalization of gambling modalities as it would limit casino operations in Brazil.
Online gaming: Although international online gaming sites (those hosted outside Brazil) are freely available in the country and gamblers do not face legal proceedings against its practice, this modality is not allowed. If legalized, the new legislation could provide security to the gambler and attract investors interested in developing online gaming in Brazil. Although aforementioned bills address questions of online gaming, there is a possibility of a separate regulation for this modality. In this scenario, there is a Senate Bill specifically on electronic sports and a House Parliamentary Caucus in favor of Electronic Games.
Senate Bill 383/2017 aims to regulate electronic sports
practice (limited to activities that use electronic devices, in which two or more participants compete, using round- robin tournament systems, knockout systems, or any other similar technology for the same purpose). We have noticed engagement by the private sector through some congressmen in order to make great changes in the current text under discussion. Since the end of 2019 this Bill has not had significant progress in the Senate. In addition to this, the House Parliamentary Caucus in
favour of Electronic Games was officially created in late 2019 and installed in March 2020. It aims to support e-Sports, but with the Congress activities reduced during the quarantine it did not have significant advances, and the event launching the Caucus had no engagement from the private sector. In 2019, the House’s Sports Committee had a special subcommittee to assess online gaming and gambling aspects. Despite its installation, the subcommittee had not promoted meetings. Based on all of this, online games are one of the discussion items under the legislative agenda. Despite of that, there is no consensus on a text to move forward with its regulation. The new regulatory framework for online games has to find a balance between a legislation hard enough to restrain money laundering and attract investments and allow the development of new interested companies. Public supervision is important, and also economic and social aspects must be considered to create appropriate legislation and guarantee wide access to online games. In this context, it is also important to discuss suitable taxation of these games to promote fair and transparent tax collection.
* About the authors:
MJ Alves e Burle Advogados e Consultores – Advocacy Brasil (MJAB) is the first Brazilian law firm specialized in Advocacy. The firm advocates for organizations and companies on governmental matters in Brazilian Congress and Administration.
http://www.mjab.adv.br/
SEPTEMBER 2020 23
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