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Brazil – Brazil’s Senate Committee approves law with CAIXA to run online

By - 10 November 2016

The Special Committee in the Brazilian Senate has approved new gambling legislation.

The bill is an updated and modified version of legislation originally drafted by Senator Ciro Nogueira in 2014 but with a number of significant changes. It will now go forward for a vote, according to information provided by the Senate.

Gaming legislation is being debated as part of “Brazil Agenda” a set of new rules put forward by the President of the Senate, Renan Calheiros – a business-friendly agenda which is designed to provide a much needed boost to economic growth.

The bill proposes the legalisation of casinos, bingo halls, slot parlours and the popular “Jogo do Bicho” or “Animal Game.” The text defines the types of gaming that can be played in Brazil, the criteria for how licences are to be granted and the rules for the distribution of prizes as well as how gaming is to be taxed in the future. According to the act online gambling will be permitted over all platforms including mobile phones “or any other digital communication channel.”

Crucially online gaming will be run on an exclusive basis by Caixa Econômica Federal, known locally as CAIXA. CAIXA is the biggest public bank in Latin America and is extremely well known locally. The CAIXA lottery sales network is also extremely well developed and extensive and encompasses the entire territory.

The latest draft, which was overseen by Chairman of the Committee Senator Fernando Bezerra Coelho, also deals with federal and state lotteries and will allow for horse racing sweepstakes. According to the Senator, Brazil is one of the few countries among the largest economies in the world that does not have legal mechanisms in place in order to regulate gaming.

He further argued that the country loses out from large foreign investment for the tourism industry. Based on information from the World Lottery Association, Bezerra Coelho said that lotteries worldwide generated US$400bn in 2014, of which Caixa run lotteries only accounted for 1 per cent of the total.

For Bezerra Coelho, legalisation of gaming in Brazil could be a way to generate additional taxes, provide jobs and raise government income. According to forecasts a regulated Brazilian gaming industry could generate revenue of R$29bn in taxes over the next three years. In presenting the amended act, the Senator stressed that it sought to meet the recent suggestions put forward by colleagues and senators as well as representatives from a number of government agencies.

“I believe we can meet the suggestions seeking to balance legalisation and be careful when it comes to money laundering ,” he said.

According to the Senate report, gaming will come under the supervison of the Federal governmment and Caixa will become the regulatory body and will be responsible for monitoring the industry and granting licences. A bidding process will be initiated and gaming licences will be granted for as long as 25 years depending on the purpose of the licence and may be renewed for the same period but only once.

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