The legalization of betting is a controversial subject. However, due to the current financial situation of the country, there is a strong appeal for discussion of the issue. Brazil is one of the only non-Islamic countries that still does not allow the activity. In South America, only Brazil and Bolivia obstruct its legality. More than 150 countries in the world already allow operation as an economic activity.
Article 50 of the Criminal Offenses Act, third paragraph, says: “Games of chance are considered to be: a) the game in which the gain and the loss depend exclusively or mainly on the lot; b) bets on horse racing outside the racetrack or where they are authorized; c) bets on any other sports competition.” Thus, existing practices in national territory are only permitted when operated by establishments, companies or services authorized by the Brazilian government. They stand out: lottery, bingo, horse race, jogo do bicho, slot machines and sports bets.
Gambling was legalized in Brazil until 1946, when President Dutra - through Decree-Law No. 9,215 / 46 - revoked his permission once and for all. Until then there were 70 casinos operating in the country.
According to the Criminal Offenses Act, the activity is unlawful and may result in punishment with a simple prison of three months to one year, plus the payment of a fine, to one who establishes or exploits so-called games of chance.
In Brazil, sports betting was updated by the promulgation of the Program for Modernization of Management and Fiscal Responsibility of Brazilian Soccer (Profut) in August 2015. Although bets continue to be banned in Brazil, there are numerous sites from other countries who operate in the Portuguese language and accept payments trough tickets and bank transfers.
As the standard is old, existing for more than 76 years, there is a gap with respect to the prohibition of online transactions, which is why this market persists with headquarters in other countries. Profut promoted changes in the Law of Criminal Offenses, but only covered betting sites hosted in Brazil by establishing fines of R$ 2 thousand (USD 615) to R$ 200 thousand (USD 61,500) for those who "participate in the game, even through the internet." Thus, the result achieved was not as expected.
There are two separate bills under way, one in the House and one in the Senate, dealing with legalization of gambling - Senate Bill 186/2014 (PLS 186/14) and Bill 442 / 1991 (PL 442/91). Given this scenario, there are signs favorable to the liberation of the activity in jurisprudence.
The Rio Grande do Sul Court recently came to understand that the practice does not represent any criminal contravention. It was pointed out that its prohibition violates important constitutional principles, such as free initiative for work and the fundamental freedom of the human being. Still, the Rio de Janeiro judiciary understood that society tolerates and exploits games, removing the idea of violation of morals and morals.
Such understanding was corroborated in the Federal Supreme Court. In a new positive statement, Minister Luiz Fux defended that all the criminal cases that deal with the subject were immediately suspended.
The main points raised against the legalization of gambling are: i) Ludopathy; (ii) money laundering; iii) Change in the consumption option and iv) Religious issue. It is necessary to make a brief synthesis on each topic. On money laundering, it is fully possible in any economic activity. However, it is the function of enforcement agents to prevent this from happening.
It should also be noted that about 2% of the world population suffers from ludopathy. Brazil has more than 200 million inhabitants, that is, a little more than 4 million gamblers. The treatment of the disease is largely related to the regulation of gaming, since the consumer will have to have a register that indicates a limit of how much he can spend in a certain game house according to his salary.
The main clause of Article 16 of PL 442/91 provides for the creation of a special registry for gamblers, so that these persons are prevented from making bets or have limited access to them. It is important to emphasize that the inclusion of a certain person in the register of ludopaths can derive from a judicial order pleaded by some relative, in a manner similar to what occurs in Portuguese legislation.
Concerning the change in the consumption option, in which the argument is that the supposed income earned by the activity comes from other productive means already existing in society, it is necessary to make some observations. It is worth emphasizing that if casinos are allowed in Brazil, it would be quite probable that some of the main international players of the sector would like to work in the country.
On the other hand, if this does not happen, these international groups would probably not concentrate their investments in ports or roads as an alternative to the money that was available to invest in Brazil because of the non-coexistence of mutual interests.
The religious question is the argument of the religious bench in the House. The counterpoint to this theme is related to the reality already existing in the legitimate performance of the alcoholic beverage industry.
The points in favor of gambling are: i) Decentralization of the power of the Caixa Econômica Federal; ii) Financial situation of the country; iii) Population in favor; iv) Monitoring of possible deviations in sports betting; and v) Gambling as a private and state investment. It is also necessary to make a brief report on each point listed.
In most parts of the world, the return on capital raised in prizes with games is between 60% and 65%, while CEF varies between 45% and 55%. Of this amount, currently, 2.7% goes to financing the sport, through the Brazilian Olympic Committee and the Federations. The Caixa, by itself, of administration fee of the game receives 5%, double the amount that funds the Brazilian sport.
In addition, there is an estimate that the legalization of the activity would result in state revenues amounting to US$ 5.55 billion per year. It is worth noting that the government increased fuels, PIS, COFINS, to raise US$ 1.85 billion in the same period. Brazil collects US$ 1.38 billion a year from the automobile industry, approximately US$ 615 million a year from the beverage industry and around US$ 1.23 billion from the tobacco industry with cigarettes.
Another favorable point can be seen in a recent survey conducted by the Paraná Research Institute. It was shown that even before this discussion with the population, 45.6% are in favor and 43.4% are against the return of gaming. It is worth remembering that in European countries, where betting on sports is already regulated, the legislation obliges the site to allow the monitoring of the activity, as a conditioning factor for its operation.
Through such compliance, it is possible to visualize any deviations of standards, based on a history of computed bets, at which time the investigation of the irregularity should be investigated immediately.
In addition, the legalization of bets would open the Brazilian market for the entry of potential brands and the accumulation of considerable capital in national territory, through sponsorship of entities and clubs. There is strong competition from this niche in Europe for companies wishing to expand into bulky markets that consume sports, such as Brazil.
It is predicted that more than 1 million jobs would be generated, 500 thousand direct and 500 thousand indirect, linked to various economic activities, due to the increase in the furniture industry, hotels, restaurants, etc.
To sum up, Brazil is seen as the next target of the largest gaming companies in the world. The regulation of the sector here is closer and has the support of the Executive and a good part of the population. Moreover, the gaming culture existing in the country is well seen in the implementation of the main products that the new companies intend to commercialize.
Although there is still a risk of such investment in Brazil, due to the political crisis and the instability that the country is in, the collecting possibilities that the gaming industry can offer should be decisive in motivating the Brazilian government to lead the regulation of this sector soon.
A good example for Brazil is Colombia, which has legalized the activity and must begin to be the target of the main industries of the sector.
* Leonardo Neri Candido de Azevedo is the coordinator of the Consumer and Sports Law area of Rayes & Fagundes Advogados Associados.
