According to the text, the Lottery, more broadly, and online games generate voluntary taxes and could help to reduce the current breach of Brazilian public accounts. At least that is what the advocates of releasing these gaming activities say in the country.
Data from the Legal Gaming Institute (IJL) indicates that Brazil fails to collect today R$ 20 billion (US$ 5.3bn) in taxes per year, enough to cover eight months of the budget allocated to the social program ‘Bolsa Família’, which needs R$ 30 billion (US$ 8bn) in 2019. This value is calculated based on statistics from countries that already have legalized gaming options such as bingos y casinos. In general, what the gaming sector moves in these countries represents 1% of GDP (Gross Domestic Product) and, in Brazil, the estimated tax would be 30% on this turnover.
But that number may be even higher.
"This is a pessimistic number, there is a repressed demand in the country, for fear of entering a clandestine house," says the president of the Brazilian Legal Gaming Institute, Magno José Santos.
A study conducted in 2015 by the Getúlio Vargas Foundation (FGV), at the request of the Ministry of Finance at the time, found that gaming could move R$ 174.7 billion (US$ 46.5bn), with tax collection estimated at $ 58.8 billion (US$ 15.6bn) annually. That is, enough to support ‘Bolsa Familia’ for almost two years.
A report released in early July by GamblingCompliance, a regulatory intelligence firm for the gaming and blockchain industry, points out that the release of betting in Brazil opens the opportunity to generate US$ 1 billion in revenue.
"For a population that is reluctant to raise taxes, raising revenue would be great," says Leonardo Palhares, a partner at Almeida Advogados, which hosted a debate on the issue in May.
In addition, online gambling regulation would help curb illegal activity. The conclusion came from the panelists who attended the Sports Commission in the House of Representatives at the end of May.
Although the House assessment has left a positive balance, the subject is still taboo in the country, so much so that there are 16 bills to regulate the activity in the House. Some of them were introduced over 25 years ago and have hardly walked all this time. Meanwhile, online gaming is already regulated in more than 60 countries.
Recently, a last year law (13.576 / 18) that authorizes sports betting, physical or online in Brazil has gained strength in the discussion. However, the law still needs to be regulated.
For Deputy Evandro Roman (PSD-PR), who called for the May debate, gambling regulation could curb illegalities such as money laundering and help protect consumers and generate tax revenue.
US$ 13.5 billion in lotteries
The Brazilian lottery and gaming market currently moves at least R$ 50 billion (US$ 13.5bn) per year. Of this total, 44% are capitalization bonds, which are called "cross-lottery". Another 30% are from federal lotteries, 8% from sports betting, 6% from local popular jogo do bicho, 6% from casino, 4.7% from bingo, 0.7% from state lotteries and 0.6% from horse racing.
Regarding the gaming modalities that are currently illegal, the most reliable source for estimating values is the IBGE (Brazilian Institute of Geography and Statistics) Household Budget Survey. In this survey, people themselves declare their expenses.
Still, Pedro Trengrouse, vice president of the Special Committee on Sports, Lottery and Entertainment Law of the Federal Council of the Brazilian Bar, believes the numbers are underestimated.
More space to grow
The expert points out that Brazilian lottery and online gambling revenues are still far from their potential and lag behind many countries where the regulatory framework is most efficient. According to data presented by Caixa Econômica Federal in a public hearing in the Chamber of Deputies, lottery revenue in Italy reaches US$ 34 billion per year, with a per capita value of US$ 565. France has a turnover of US$ 16 billion, with US$ 249 per capita, and New York alone earns US$ 9 billion a year, with US$ 456 per capita.
Meanwhile, in Brazil this collection does not exceed US$ 4 billion, with per capita sales of US$ 18.53, behind Portugal (US$ 228), Uruguay (US$ 40) and Argentina (US$ 36). One of the factors that explains the low collection of lotteries in Brazil is the fact that the legislation provides for a smaller share of prizes in Brazil compared to other countries. The world average is over 50%.
One million jobs
The release of the gaming activity would have the potential to generate 1.3 million jobs, according to the president of IJL, Magno José Santos, with 659,000 direct jobs. This estimated number of vacancies is more than double the balance of formal jobs generated in the country last year (529,554).
For this result, Santos says that he takes into account data from the BNDES (National Bank for Economic and Social Development) about the service sector and informal numbers about gambling. "The jogo do bicho has 350,000 point sales with 450,000 workers today."
The US casino industry generates about 1.7 million jobs.
Source: GMB / Valor Investe
