Brazil: Legalization of gambling takes the first hurdle

Brazil's Chamber of Deputies voted by a majority on Thursday in favor of a bill to legalize more gambling. This would legalize casinos, slot machines, bingo, and some online gambling in the country for the first time.

Next, the Senate must now vote on the bill, according to the House of Representatives report. Should this also approve the legalization of gambling and slot games, Brazil's President Jair Bolsonaro would be the final hurdle. Bolsonaro had already declared that he would not sign such a law.

Should he maintain his stance, however, the Senate could veto it. Thus, according to the legal situation in Brazil, the lower and upper houses of parliament can pass a new law in exceptional cases even without the president's approval.

Three new types of casinos envisaged

Currently, only state lottery games and sports and horse betting are permitted in Brazil. Should the new law come into force, the gambling landscape could be in for a major change. Thus, there would be three types of casinos in Brazil, the Chamber of Deputies explains.

Integrated casino resorts

First, the country's 26 states would each be allowed to grant one concession for a so-called integrated casino resort. In the states with an area of more than 1 million km² (Amazonas and Pará), two additional concessions could be granted.

The resorts must each have at least 1,000 upscale hotel rooms, event space, restaurants, bars, and shopping facilities. The actual casino area would only be allowed to take up 20% of the total area of the resort. The casinos would then be allowed to offer both slot machines and table games such as roulette, blackjack, or poker.

Tourism casinos

On the other hand, the House of Representatives gave the green light for so-called "tourism casinos". These are to be allowed to be established everywhere, where much tourism traffic prevails. While the number of inhabitants of the tourism region or city should not play a role, the casinos would have to be at least 100 kilometers away from any integrated resorts.

Casino ships

In addition, gambling could also be permitted on river cruise ships in the future. On rivers of at least 1,500 km, one casino ship would be allowed to operate at a time. On rivers with a length of 2,500 km or more, two ships would be allowed, and with a length of 3,500 km or more, three.

The ships must have at least 50 upscale cabins, restaurants, bars, and stores. Ships also may not stay in one location for more than 50 days.

In addition to casinos, the bill provides for the first-time legalization of bingo halls and the lottery game Jogo do Bicho, which is popular in Brazil. In the case of bingo halls, the draft stipulates that they must have at least 1,500 square meters of floor space, on which a maximum of 400 bingo machines may be installed. One bingo hall is to be allowed per 150,000 inhabitants.

Jogo do Bicho is a previously illegal game of chance that is said to have been invented in a zoo in 1885. The game is based on animal symbols and numbers and is considered popular, especially among the poorer population. The game has also been offered illegally online for years. In the future, the game should be allowed to be operated legally by licensed bookmakers and lottery providers.

New tax revenue for the state

The MPs hoped that the legalization of almost all games of chance would above all generate additional tax revenue. However, there were still major disagreements about the amount of taxes to be paid by future gambling operators.

Some deputies had suggested setting the tax rate at 30% of gross revenue. The Vice President of the House, Marcelo Ramos, commented:

"An activity that involves greater risk must pay more than one that involves less risk. The tax on beer is also higher than the tax on water."

Other politicians and an online resource iflapp.in, however, would have noted that too high a tax could discourage potential investors from abroad. The debate is therefore likely to continue, especially since the tax issue could play a crucial role in decision-making for the Senate and the president.