TER 25 DE JUNHO DE 2019 - 03:07hs.
Despite yesterday delay

Gaming law advances to be voted in Brazilian Senate committee

After years of comings and goings, the Senate's Constitution and Justice Commission (CCJ) is expected to vote this month on legalizing gambling in the country. The rapporteur of the proposal, Senator Benedito de Lira (PP-AL), is optimistic about the progress of the issue in 2018, even though it was postponed at yesterday’s meeting due to lack of quorum ahead of next week carnival’s holyday that is considered a very important date in Brazil.

The Senate Bill (PLS) 186/2014 is one of two proposals under discussion in the National Congress and is in a more advanced stage than PL 442/1991, which has been in the House for 27 years. The approval of the Senate's most important commission should take place shortly after the beginning of the legislative year, as of this week, believes the rapporteur. Yesterday, it was postponed due to lack of quorum but it is expected to be included in next CCJ’s meeting once carnival holidays end.

According to de Lira, the legalization of the different games modalities foreseen in his report should generate an annual revenue of US$4.6 to US$6.15 billion in taxes. In times of fiscal crisis, this extra revenue can be a motivator for the government to take over the project.

"It is not a small resource, and it is money that does not exist today in the coffers of the Union,” he told local media Valor.

The tendency today, according to Valor’ sources, is that the CCJ approves the de Lira project and that the issue goes to the Senate. There is a tacit agreement that MPs await voting in the Senate and, from then on, promote whatever changes they deem necessary. "I am waiting for what will come from the Senate," said Congressman Guilherme Mussi (PP-SP), rapporteur for the bill that is being discussed in the House.

The evaluation of some deputied is that the procedure of the project in the Chamber will be slower. Mussi is cautious about deadlines, considering that the Temer government has other priorities, such as pension reform.

Between November and December 2017, PLS 186 was ready to be voted on several times in the CCJ. But conflicts of interest around the issue were reflected in senatorial requests for reviews, while mixed groups attempted to influence parliamentarians for more favorable business writing.

Entrepreneurs linked to Las Vegas casinos and large resorts in Singapore, for example, advocate a more restrictive liberalization, given the billion dollar investments they intend to make in ventures in Brazil.

This model has the sympathy of the president of the Chamber, Rodrigo Maia (DEMRJ). But it contrasts with the interest of Argentinean groups and Brazilian businessmen, who say they are ready to invest in smaller casinos.

Like big resorts, these smaller casinos want to limit the operation of video poker machines and other electronic games to their establishments. On the other hand, businessmen connected to the jockey clubs have expressed interest in operating with these machines, whose manufacturers push for a wider release.

The unrestricted release of these machines is also of interest to so-called bicheiros (operators of the local popular jogo do bicho), who currently operate with electronic equipment, according to people who follow the theme in Congress.

Benedito de Lira, however, stipulated that video games can be exploited only by casinos. The bingos will explore the videobingo machines - which simulate their activity through electronic means. The same happens with the jockey clubs, which will be authorized to operate only the machines that simulate horse races.

In the public sphere, states and municipalities fight to have the competence to accredit and supervise establishments and companies for the exploration of bingos, casinos and jogo do bicho to be legalized.

Meanwhile, State-owned Caixa Econômica Federal and the state lotteries dispute the control of lottery modalities. This detail, however, should remain for the regulation of the law.

There is also disagreement with the tax slice that would belong to each of the Federation's entities. The de Lira project has fixed that the Union will keep 40% of the value of the taxes, and the rest will be divided equally between States and municipalities.

The text attributes to the federal government the exclusive competence to regulate and accredit gaming activity in the country. The exception is bingo, whose accreditation is the responsibility of the States, as well as the supervision of establishments accredited in their territories.

The federal government will also be responsible for accrediting interested in exploiting the jogo do bicho, although the exploration of this modality is circumscribed at the municipal level. It was a way that the rapporteur found to avoid the influence of the bicheiros on the process of concessions and inspection of the game.

In the case of casinos, de Lira chose to legalize them in the form of integrated resorts.

PLS 186 was frozen by the end of 2016, when it was about to be voted on in the plenary by the senators. On the day set for the vote, December 14, Senator Magno Malta (PR-ES), who is an evangelical pastor, applied for the text to return to the CCJ, under the formal argument of assessing its constitutionality. He had support from 44 colleagues while 19 voted against.

Matter hibernated for months on commission, over most of last year. Then, on November 7, Senate President Eunice Oliveira (PMDB-CE) resurrected the proposal after a meeting with governors in Brasilia. He linked his support for regulation of gaming to the application of taxes collected in the area of public security - although the Constitution determines that the money is used in social security.

Following Oliveira’ statement, lobbyists from various sectors returned to the corridors of Congress. Representatives of national bingos, Las Vegas casinos, Hong Kong and Buenos Aires, resorts of Singapore, and European electronic gaming entities came to Brasilia. Lobbies from sectors that would indirectly benefit from the regulation of the activity, such as producers of beverages, also came to follow the issue more closely.

For a Brazilian entrepreneur interested in the sector, "the bill of the Chamber serves more the small business owner, former owner of bingo, or jogo do bicho. The Senate’s one will bring more foreign capital, more investment." For him, the biggest complication for the project at the moment "is the government's unwillingness to create discontent."

Games of chance were banned in Brazil in 1946, by a decree-law of then-president Eurico Gaspar Dutra. Religious, First Lady Carmela Leite Dutra, Mrs. Santinha, would have pressed her husband to take the measure.

It is precisely on the religious bench in Congress that there is the greatest focus of resistance around gambling. But not the only one. Deputies like Luiz Carlos Hauly (PSDB-PR) see in the activity a threat to public health. "I had a case in the family of a person who lost everything in the game," says the parliamentarian. "What sets the lottery apart from gambling is the compulsion to play."

Source: GMB / Valor Econômico