Gambling business in Brazil: Past, present and future

"The situation with the legal regulation of gambling in Latin America cannot be definitively clear without the final legalization of gambling in Brazil," is the opinion of most industry experts. Brazil is not only the fifth most populous region in the world, but also in the top 10 countries with high GDP. What does this mean for the gambling industry?

One, the legalization of gambling will make Brazil one of the most profitable regions in LA for the industry.

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The second - the active growth of the economy, the welfare of the population and in general the high level of gambling of Latin Americans guarantees an increased interest in land and online casinos and sports betting.

However, rosy dreams are still dreams. Congress of Brazil is in no hurry to adopt a full package of laws regulating the industry. Today, however, the arguments of the opposition are stronger than ever.

Let us recall the main milestones in the development of gambling in the country.

Yesterday

The ban on gambling in Brazil has not been repealed since its introduction in 1941. However the stronger the prohibition, the sweeter the forbidden fruit. The shadow business in such conditions feels fine: according to analysts' calculations, the annual turnover exceeds 5,5 billion U.S. dollars. In national currency this is more than 20 billion reals.

Apparently, the analysts' arguments shook the monument of the law, and since the beginning of 2000, Brazil began to legalize gambling houses. At first, for a certain period. For example, the Bingo lotteries operated under government custody from 2001 to 2004. Thanks to this, the budget was replenished annually by 17 million dollars.

In 2012, poker was recognized as a contest of skills rather than a game of chance. Three years later, online poker also received the status of a legal pastime. Since 2016, Brazil legalized betting on horse racing, state online lotteries. Everything seemed to be fine, but the issues with other types of gambling - land and virtual casinos, sports betting, bingo and slots - remain unresolved to this day.

Today

At the end of 2018, government experts calculated the gambling industry's return on lottery ticket sales. The revenue was about $900 million. Compared to 2017, it doubled.

But the interesting thing is that Brazil's popular national lottery, Beast Game, is essentially illegal. Illegals make more than 15 billion reais ($3-4 billion) a year on it. Compare that to the statistics of government experts: a 4-fold difference.

Illegal online casino and betting sites are not blocked, and the fight against the shady market is conducted only on paper. This is what the supporters of legalization point to, and also the fact that after legalization the income to the treasury will increase manifold, including taxes and investments in the industry.

Tomorrow

To go into effect, bills in Brazil must be approved by the National Congress, which consists of two chambers: the lower chamber, the deputies, and the upper chamber, the Federal Senate. Once approved, the law goes to the president for approval.

The long-suffering bill to legalize gambling in Brazil once again failed to pass the Federal Senate in March 2018. Lawmakers rejected it for the following reasons:

• Insufficient research on the online gambling market;
• No coherent anti-money laundering mechanisms;
• The system of penalties for violations is not thought through;
• The President's requirements for the establishment of a regulatory committee of the industry are not taken into account;
• The tasks of regulatory bodies to supervise online casinos are not clear.

One cannot say that the senators' arguments are devoid of common sense. If the bill already has more than 70 corrections, then, apparently, it is still raw for implementation in reality.