Modalities that the project authorizes
The proposal authorizes the practice and exploitation in Brazil of:
-casino games;
- bingo games;
- video bingo games;
-online gaming;
-jogo do bicho;
- betting on horse racing (turf).
Rules
The bill repeals a 1946 law and some provisions of the Criminal Misdemeanors Act. The project emerged from a proposal presented in 1991. The text allows the exploitation of games and bets only by legal entities licensed by the Ministry of Economy.
Licensed companies must:
-have headquarters and administration in Brazil;
-run the activity with the food and beverage trade and the holding of artistic and cultural events;
-include in its corporate name the expression “gaming and betting operator”.
The exploitation of games and betting can only take place in physical or virtual locations registered with a regulatory body - without specifying which entity will be. If there is no record, the proposal provides that internet providers must prohibit access to these sites.
The following are prohibited from being shareholders and from exercising management and management positions or functions in companies that operate gambling and betting:
-occupants of public management positions, jobs and functions;
- holders of public positions or jobs with competence to regulate or supervise any type of game, bet or lottery;
-administrators of business companies, foundations or legal entities governed by Private Law, whose capital is constituted, in whole or in part, directly or indirectly, by state resources.
The proposal also creates some requirements for gaming operators, including:
-lawful origin of the resources used in the payment of the capital stock, in the acquisition of control and qualified participation;
- unblemished reputation of controllers and holders of qualifying holdings;
-identification of the origin of the resources used in the activity;
-identification of the members of the company's controlling group and the holders of interest in its capital stock.
To assume management positions in gambling and betting operators, it is necessary, for example, that the person has an unblemished reputation, is not convicted and has residence in Brazil.
The appointment or election of members of statutory bodies must be approved by the Ministry of Economy within 15 days.
Casinos
The text authorizes, through accreditation with the Ministry of Economy, the exploitation of games in casinos, in buildings and on vessels. According to the proposal, the casinos should work together with integrated leisure complexes, with hotels, restaurants, bars, and a shopping center.
Limits for the authorization of casinos:
-1 establishment per state with a population of up to 15 million inhabitants;
-2 establishments per state with a population between 15 million and 25 million inhabitants; and for the states of Amazones and Pará due to their territorial dimensions.
-3 establishments per state with a population greater than 25 million inhabitants.
The text prohibits the concession of more than one casino per state to the same economic group. The accreditation of each casino will be done by public auction, in the technical modality and price.
The text foresees that the casinos must work exclusively in integrated leisure complexes – high-end hotels with at least 100 rooms and a shopping center. Card games can be explored, such as blackjack or baccarat, electronic games and roulette, among others.
Ships
The project authorizes the possibility of operating casinos in river and maritime vessels, one for each river with 1,500 km to 2,500 km in length; two for each river with a length between 2,500 km and 3,500 km; and three per river with a length greater than 3,500 km.
These vessels may not be anchored in the same location for more than 30 consecutive days, and the concession may be for up to ten establishments.
There is also authorization for vessels to explore casinos, but they must follow certain criteria, such as: high-end hotel accommodations, with at least 50 rooms; places for holding small social, cultural or artistic meetings and events; restaurants and bars; and shopping centers.
Touristic cities
In locations classified as tourist centers or destinations, the installation of a casino will be allowed, regardless of the population density of the state in which they are located.
The proposal defines these places as those that have a regional identity, adequate infrastructure and offer of tourist services, high density of tourists and title of natural heritage of humanity, in addition to having tourism as an important economic activity.
A tourist casino cannot be located less than 100 km away from any casino integrated into a leisure complex.
Bingos
In the case of bingo, the text allows its permanent exploitation only in bingo houses, allowing municipalities and the Federal District to explore these games in stadiums with a capacity of over 15 thousand fans.
Bingo houses must have a minimum capital of R$ 10 million (US$ 1.95m) and be located in places with a minimum area of 1,500 square meters, where up to 400 video bingo machines can also be located, but slot machines will be prohibited.
According to the text, at most, one bingo house will be accredited for every 150,000 inhabitants. Licensed places will have a 25-year authorization, renewable for an equal period.
Jogo do Bicho
For the legalization of the jogo do bicho, the text requires that all the licensee's records, whether of betting or extraction, be computerized and with the possibility of access in real time (online) by the Union, through the Audit System and Control (SAC).
Interested parties must present a minimum share capital of R$ 10 million (US$ 1.95m) and reserve funds in guarantee for the payment of obligations and duties stipulated in the project, except for the prize, which may be in the form of a cash guarantee, insurance guarantee or bank guarantee.
Accreditation will be for a period of 25 years, renewable for an equal period if the requirements are met. There may be, at most, one operator of this game for every 700 thousand inhabitants of the state or DF. In those with less than 700 thousand inhabitants, there should only be one accredited.
Redemption of prizes up to the Income Tax exemption limit will not require identification of the player.
Horse racing
The project provides that turfistic entities — accredited by the Ministry of Agriculture and organized in the form of a Jockey Club to carry out horse racing with betting operations — may be licensed to operate:
- horse racing bets;
- bingo games;
- video bingo games.
According to the proposal, the revenue from games and bets should be reverted only to the benefit of the entity.
Gambling and betting agents
Also, according to the text, those who carry out the activity of coordinating, conducting or mediating games and betting must follow some requirements, which are:
-have completed high school in the country or equivalent abroad;
- be fluent in Portuguese, if he/she is a foreigner;
- pass technical and ethical certification exams defined by the federal regulatory agency.
In addition, the person who assumes the role cannot have been convicted of some crimes, such as administrative improbity, tax evasion, malfeasance, active or passive corruption and embezzlement.
Players and gamblers
The text also establishes that only those of legal age, "in the full exercise of their civil capacity", can participate in games and bets. They are prohibited from practicing the activity, for example:
-companies;
-non-personalized companies and depersonalized entities;
- whoever is excluded or suspended from the registration of players and bettors, by their own will or court decision;
- persons declared insolvent or deprived of the administration of their assets;
-gaming and betting agents with active registration;
- public agents that integrate regulatory or supervisory bodies of gambling and betting.
Audit and Control System
The proposal also provides for the creation of a management software called the Audit and Control System (SAC) so that the Ministry of Economy can monitor bets and payment of prizes for games of chance.
The program must contain a "cashless" system, which prevents the introduction of coins or banknotes into electronic machines and gambling tables. This model must have the storage of credits on a card, with the identification of the player.
According to the text, the insertion of banknotes or coins directly into the machines is prohibited.
All players must be identified, in the form of regulation. In the case of residents in Brazil, identification will be through CPF and identity document. Residents abroad must be identified by passport.
Advertising
The project also creates rules for advertising involving gambling and betting. First, it is determined that companies and operators will have to have, via internet address, the license number for operation and a warning message about the risks and behavioral disorders associated with gambling and betting. The inspection will be carried out by the regulatory body.
Also, according to the project, companies that do not have the license will not be able to carry out advertising campaigns, which must be guided by social responsibility and the search for awareness of responsible gambling.
In addition to this criterion, the proposal also defines a list of behaviors prohibited in campaigns:
- unsubstantiated claims about the odds of winning or the possible winnings that players can expect to get from the game or bet;
-suggest that gambling contributes to social success;
-suggesting that gambling or betting is an act or sign of virtue, courage and maturity;
-suggesting that not playing is a sign of weakness;
-suggest that games and bets contribute to solving social, professional or personal problems;
-suggest that gambling and betting are an alternative to employment, a solution to financial problems or a form of financial investment;
-offending beliefs or traditions contrary to gambling and betting;
- direct advertising or count on the participation of children or adolescents.
Money laundry
The use of games in money laundering schemes, one of the points used by critics of the proposal to defend the rejection of the text, is addressed in the project. According to the proposal, the entities responsible for the games must create policies to prevent the use of laundering practices and terrorist financing.
These policies must be documented, constantly updated, and available to employees, partners and service providers. The criteria for the formulation will be defined, after the law comes into force, by the Ministry of Economy.
Also according to the text, one of the prevention steps will be the registration of activities at the gaming venue. Responsible parties must adopt procedures to collect and validate personal information from players, employees, partners and outsourced service providers; the registration of gambling and betting operations; and monitoring suspicious behavior and situations.
Inspection fee
The proposal also establishes the Gaming and Betting Inspection Fee (Tafija), which will be the responsibility of the Ministry of Economy. Contributors will be gambling and betting operators and licensed entities. The rate will be charged in quarterly amounts until the 10th of January, April, July and October, as follows:
-bingo houses: R$ 20 thousand (US$ 3,970) per licensed establishment;
-casinos: R$ 600 thousand (US$ 119,700) per licensed establishment;
-jogo do bicho: R$ 20 thousand (US$ 3,970) to each licensed entity;
-online games: R$ 300 thousand (US$ 59,560) per licensed household.
The amounts will be updated annually based on the basic interest rate, the Selic. Non-payment of contributions will be recorded in the Union's overdue debts.
Cide-Games
In addition to the inspection fee, the project also creates the Contribution for Intervention in the Economic Domain (Cide) which will focus on gambling activities.
Since the 1988 Constitution, different types of Cide have been instituted, including the Cide on import and marketing activities of oil and its derivatives, the Cide-Combustíveis.
In the case of games, Cide-Jogos will be levied on the gross revenue from games and bets (the difference between the total of bets placed and the total of prizes paid) of the regulated establishments.
The rate will be 17% on the gross revenue earned as a result of the exploitation of games. The payment of Cide-Jogos will also be quarterly.
According to the text, the resources obtained through the tribute will have the following destinations:
-12% Embratur;
-10% financing of programs and actions in the area of sport;
-10% national cultural fund;
-4% financing of programs and actions within the scope of public health;
-4% funding of health programs and actions related to gambling;
-6% national public security fund;
-4% National Fund for Children and Adolescents;
-4% funding for animal defense and protection programs and actions;
-4% Student Financing Fund (FIES);
-5% for actions to rebuild areas at risk or impacted by natural disasters and actions to build housing for the low-income population relocated from areas at risk or impacted by natural disasters;
-5% For actions aimed at preventing natural disasters in the field of defense;
-16% for the State Participation Fund (FPE);
-16% for the Municipal Participation Fund (FPM).
Tax on prizes
Players and gamblers will also have taxes levied. Income Tax will be levied on prizes with a value equal to or greater than R$ 10 thousand (US$ 1,985) - corrected annually by Selic.
The rate charged will be 20% of the amount to be paid by the player and the tax must be withheld by the gaming and betting company.
Crimes
The bill establishes as crimes, among others:
- the exploitation of games and bets without meeting the legal requirements, with a penalty of imprisonment, from 2 to 4 years, and a fine;
- fraud in games and bets, with penalty of imprisonment, from 4 to 7 years, and fine;
-allowing minors under the age of 18 to participate or enter gaming and betting environments, with a penalty of detention, from 6 months to 2 years, and a fine;
- make inspection difficult, with the penalty of imprisonment, from 1 to 3 years, and a fine.
Source: GMB
