Brazil Senate Fulfills Promise, Blocks Progress of Gambling Bill

Posted on: June 3, 2022, 05:39h. 

Last updated on: June 3, 2022, 10:50h.

Legislators in Brazil’s Senate are in no hurry to advance legal gambling. They’re still sitting on a bill that easily made it through the Chamber of Deputies three months ago.

Brazil Senate
Brazil’s Senate in session. The chamber is slow to react to legislation to legalize gambling in the country. (Image: Shutterstock)

In February, the Chamber of Deputies issued a favorable opinion on the basic text that legalizes gambling. However, the project lost its momentum in the Senate, where many politicians view it as controversial.

Senate President Rodrigo Pacheco showed resistance to the way it was approved in the House. Senator Flávio Bolsonaro, the son of Brazil’s President Jair Bolsonaro, advocates legalization. However, he does not publicly defend it. In 2020, Flávio visited the US on a trip to study gambling legalization efforts, but now isn’t putting that experience to good use.

Brazil Lagging Behind

Felipe Carreras presented the bill in the House and said he spoke with the president of the Senate about the proposal 15 days ago. Pacheco promised not to shelve the project, according to comments he provided to local media.

I was happy about it. Even Saudi Arabia authorized gambling about a month and a half ago. We see the online betting market growing in Brazil, and the country is lagging behind,” said Brazilian House lawmaker Felipe Carreras.

In February 2022, under pressure from the evangelical caucus, President Bolsonaro said he would veto the legalization of the games if the Senate approved the bill. At the same time, he publicly admonished the House for approving the text. However, government officials worked in favor of the bill in the House, as did the Centrao, a group of political parties that is strengthening its position in political circles.

The leader of the government in the Chamber, Ricardo Barros, admits that the project could be a source of income. In May, he highlighted the direct economic impact of legalized gambling, as well as its ability to create over 400,000 new jobs. Estimates indicate that the federal government loses R$50 billion a year (US$10.49 billion) in revenue from the ban on gambling.

Senator Eduardo Girão is leading the resistance against the bill. In April, he created the Front Against Gambling lobby group in the Senate. Other senators, including Luiz do Carmo and Carlos Viana, have also taken a contrary position.

A Stranglehold on Health

The project creates a tax, the Cide-jogo, to collect 17% of the gross income of operators. The funds will go to areas such as tourism, environment, culture, public safety, and natural disasters. On the other hand, the income tax that will be levied on the individuals would be 20% of the net profit.

There are new taxes that might make it into the legislation as well. Brazil may require operators to open a local office in the country. This could make them liable for higher domestic tax obligations.

The project already allocates 4% of the resources for Brazil’s health system. However, it needs to reach 12% in the Senate in order to appease some lawmakers.

Other gambling proposals also lost traction in the Senate, where many lawmakers are afraid of the evangelical caucus. For example, a project by Senator Roberto Rocha that legalizes gambling in certain locations stopped in the Committee on Regional Development and Tourism. It is still waiting for a public hearing after over a year.

There is also a project to introduce Jogo do Bicho (an illegal lottery game), bingo, and online sports betting ready to be considered in plenary. However, it remains untouched since 2020.

The text approved in February in Deputies grants permanent or temporary licenses to explore the activity. Each economic group would have the right to operate one casino per state, with the exception of Minas Gerais, Rio de Janeiro, and São Paulo. These would receive authorization to include two or three establishments.