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Brazil – Brazil could legalise gaming in face of worsening recession

By - 21 September 2015

Brazil could legalise gambling in order to raise money and help weather the recession.

Shortfall in taxes generated by Brazil’s struggling economy has prompted the government of Dilma Rousseff to cut budgets and raise taxes. Rousseff and several cabinet ministers met with party leaders from the alliance last week to discuss the issue to see if the new proposals would have their approval, according to statements made later by a number of lawmakers to local media.

According to the Deputy Domingos Neto, the government could also permit online gaming as during the meeting the President highlighted the fact that currently Brazilians use international credit cards in order to gamble via offshore betting sites and leave no resources for the government. Legislators said, however, that the project could face fierce resistance from Deputies and Senators with ties to the church but, but agreed to consult their constituents. The proposals would mean fundamental changes to Brazil’s gaming laws and could allow for the operation of bingo halls, large scale casino resorts, sports betting and could allow for other types of gambling as well.

The leader of the Republic Party, Maurício Lesa, said that so far similar proposals have always ended up being defeated by opposition MPs linked to the Church and because the government has been against it, but with the advent of the crisis the government has changed its mind in its search for additional ways to generate income.

The proposal would legalise all kinds of games, and allow for the construction of large scale casinos as well legalising the “jogo do bicho” or animal game. The animal game is particularly popular in Rio de Janeiro where it is currently controlled by clandestine and criminal organisations. The lottery-type drawing, operated on a regional basis by criminals known as “contraventores,” has been illegal since 1946 in 25 of the 26 states with Paraiba being the only state where the game is legal and regulated.
The President of the Chamber of Deputies, Eduardo Cunha admitted that the proposal has a good chance of succeeding although he is personally against the bill.

“A country that depends on gaming to settle their accounts is like a worker with no wage who goes to the casino in order to earn money to pay their expenses. We cannot go to the casino to solve our problems,” he said and insisted that more cuts should be made in the budget instead.

This month the government unveiled a US$7bn package of spending cuts and last month the government announced that its economy fell into recession, shrinking 2.6 percent from a year ago.

The President’s plans come on the heels of similar proposals which are already under consideration in the Senate. In July Senator Ciro Nogueira, put forward plans to authorise online gaming as well as other types of gaming on the Internet. The new bill would permit online and land based gaming and would reflect similar legislation in place in countries in Western Europe. The bill would be aimed at generating tax revenue from the industry and regulate the local market, where according to recent government studies turnover made via offshore sports betting sites alone amounts to around US$300m a year on Brazilian sports. The bill also seeks to regulate land based gaming as well. According to Senator Nogueira, the country’s illegal gaming market is already worth around approximately US$18bn.

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