In a split decision, the Senate's CCJ approves the legalization of casinos, bingos and Jogo do Bicho
The bill allows and establishes essential guidelines for the operation of gambling. If approved, the legislation will allow companies in Brazil to offer these games upon payment of fees and taxes.
President of the CCJ, Davi Alcolumbre, and the project's rapporteur, senator Irajá, at the meeting on Wednesday - Photo Reproduction/Agência Senado
In a decision that promises to have a major impact on Brazil's economic and social scenario, the Constitution and Justice Commission (CCJ) of the Federal Senate approved this Wednesday (19), by a narrow margin, the legalization of casinos, bingos and Jogo do Bicho. The project was approved with 14 votes in favor and 12 votes against. It establishes guidelines for the exploitation of games, inspection and control mechanisms, as well as rules for the taxation of betting houses and prizes. Furthermore, the project grants a series of rights to players.
Context of the Decision
The discussion about the legalization of gambling in Brazil is old and involves several economic, social and moral aspects. Proponents of legalization argue that regulating these games could generate billions in tax revenue, create jobs and boost tourism. On the other hand, critics point to the risks of increasing ludopathy (addiction to gambling) and the possibility of money laundering and other criminal activities.
Voting this Wednesday began at around 3pm and congressmen followed closely on the collegiate panels. Advisors and senators took turns on the screens to count the support. With approval by the CCJ, the text will be analyzed by the Senate plenary. If there are no changes to the content of the text by the senators, it will be sent for sanction by President Luiz Inácio Lula da Silva (PT). The proposal approved by the CCJ allows the carrying out and exploitation of casino games, bingo, video bingo, online games, Jogo do Bicho and betting on horse races (turf) in Brazil.
Arguments in Favor
Senator Irajá (PSD-TO), rapporteur of the project, argued that gambling is a "relevant economic activity" in Brazil and, therefore, should be regulated by the State. According to him, the project's main advantage is to enable an economic activity that currently occurs illegally and is regulated by the State, reducing possible links between gambling and criminal organizations. Irajá also highlighted that establishing regulations for betting also makes it possible to address betting addiction as a "major public health challenge", directing part of the resources raised to mitigate the negative effects of this situation.
Arguments Against
The proposed text was approved by the Chamber in 2022, however, it encountered difficulties when passing through the Senate. Opposition from conservative parliamentarians and social movements resulted in several postponements in the discussion of the text. The evangelical group and conservative parliamentarians have led a campaign in recent weeks with the aim of winning votes from senators, especially those from centrist parties. Before discussion of the proposal began, senators did counts and requested vote commitments, as the vote was expected to be close.
How it will work
The exploration of gambling throughout the national territory, which was prohibited by a 1946 law, is now permitted by the text. Furthermore, the text also cancels parts of the Criminal Misdemeanors Law, which determined punishments for these practices. However, the operation of gambling games must follow certain criteria, such as the requirement for a minimum company capital and proof that the resources have a lawful origin. Only companies based in Brazil will be allowed to carry out gambling, as long as they are in previously authorized locations.
According to the project, it will be the responsibility of the Ministry of Finance to define the procedures for licensing, inspection and authorization of exploration. Furthermore, the government may create a regulatory agency. The text also stipulates that companies that offer gambling must be registered, headquartered and managed in Brazil, and will only be able to operate if they obtain a license granted by the Ministry of Finance. According to the provisions of the project, the company's statute must indicate that the exploration of these activities is the main activity of the CNPJ. However, it is permitted to register secondary activities, such as food and beverage sales, in addition to artistic and cultural activities.
To obtain an operating license, the company must meet certain requirements, such as proving the legal origin of the resources and having the minimum capital necessary for each type of game: R$10 million for bingo, R$100 million for casinos and R$ 10 million for Jogo do Bicho. Licenses will be granted according to criteria established by the ministry, and may be permanent or temporary. The operation may also be authorized in specific or previously defined locations, known as gaming areas. These authorizations will be non-negotiable and non-transferable. Games may only be offered in physical or virtual establishments authorized by the federal government.
If there is no regulation of licensing criteria after 12 months of implementation of the law, bingo and Jogo do Bicho activities will be temporarily permitted. Each game modality will have criteria established in advance for its operation.
Horse racing betting: It will be necessary, for example, to obtain accreditation in advance from the Ministry of Agriculture to hold horse races and request authorization from the Ministry of Finance to operate betting, within a maximum period of one year. Furthermore, if the betting location also wants to offer bingo, it will also be necessary to prove that it meets the necessary requirements for this type of game.
Casinos: Casinos will be accredited through public auctions and will only be able to operate in leisure complexes or on boats. The version approved by the Chamber required that spaces intended for casinos be built especially for this purpose.
However, in the Constitution and Justice Committee, the text was modified to places specifically intended for this purpose. The rapporteur believes that this change will guarantee greater participation of the hotel sector in the offer of casinos.
Bingos: Bingo houses will be the only places where the offer can take place. The validity period of the operating licenses will be 25 years.
Animal game: Companies that prove sufficient resources to pay their obligations will be granted a 25-year license. Furthermore, bets will be registered on a digital platform. It is important to highlight that, in this specific case, it will not be necessary to identify bettors who receive prizes up to the Income Tax exemption limit.
Who can play
According to the proposal, Only individuals over the age of 18 will be permitted to participate in gambling. Players who self-declare as ludopaths (people diagnosed with gambling compulsion) or who have been banned from court will be prohibited from playing. Minors will not be able to access authorized gaming locations, and they will not be able to install gaming machines outside the country.
According to the proposal, bettors will have up to 90 days to claim betting prizes. The text approved by the CCJ stipulates that the following categories are prohibited from betting in any modality: legal entities, individuals with a gambling disorder who request inclusion in the National Registry of Prohibited Persons (Renapro), people judicially interdicted at the request of family members due to gambling addiction, insolvent people (with debts greater than their assets), individuals associated with gaming companies, and public agents linked to gaming inspection bodies.
The project also proposes the implementation of a national policy to protect bettors. This includes the requirement that bookmakers maintain support services for bettors and adopt mechanisms to prevent gambling addiction. Furthermore, the text prohibits betting companies from offering, granting or facilitating loans to bettors, and authorizes companies accredited by the Ministry of Finance to collect debts arising from betting.
Taxation
Players' winnings, which represent the value of prizes minus betting expenses in a 24-hour period, will only be subject to taxation if they reach or exceed R$10,000. In these cases, Income Tax will be applied at a rate of 20% on the prize, held directly by the bookmaker. In addition, companies authorized to operate gambling in Brazil will have to pay a quarterly inspection fee. Prices vary depending on the type of game offered:
For bingo and betting on horse races, the fee is R$20,000 per licensed establishment.
For online games, the value is R$300,000 per licensed virtual address.
For casinos, the fee is R$600,000 per licensed establishment.
For Jogo do Bicho, the licensing fee is R$20,000.
An additional charge for companies will also be implemented, called Contribution for Intervention in the Economic Domain (Cide). This tax will apply to the gross revenue of bookmakers, calculated based on the net revenue from bets, minus the prizes distributed. The Cide rate will be 17%, with payment made quarterly. Revenues from this tax will be directed to various purposes, including programs to combat gambling addiction and funds intended for the transfer of resources from the Union to states and municipalities.
Oversight
The proposal that legalizes gambling establishes strict guidelines to ensure transparency and supervision of betting. All financial transactions by bookmakers will be recorded in the Audit and Control System (SAC), accessible in real time by the Ministry of Finance.
Furthermore, companies authorized to operate betting will be required to present half-yearly balance sheets and undergo annual audits. The project establishes that machines used in games can only be made available after obtaining a registration granted by the Ministry of Finance. This registration, valid for four years, will guarantee the integrity of the equipment, ensuring that it has not been tampered with.
The approved text determines that bookmakers must implement measures to prevent games from being used for money laundering and terrorist financing. These measures include the creation of tools that establish channels for reporting complaints and reporting suspicions to the competent bodies. Furthermore, companies will not be able to operate gaming machines that allow payment in physical cash, nor receive resources or pay prizes through financial institutions not authorized by the Central Bank.
The project also provides that the choice and appointment of company administrators will require authorization from the Ministry of Finance, with criteria to be evaluated, such as impeccable reputation and never having been convicted of crimes such as corruption and embezzlement.
Failure to comply with these rules may result in severe penalties, such as:
Fine that can reach up to R$2 billion per infraction;
Partial or total suspension of activities for up to 180 days;
Revocation of the operating license;
Prohibition on obtaining a new license for up to ten years.
Crimes
The project not only provides for administrative punishments, but also criminalizes certain practices related to betting. According to the text, those who explore gambling without a license could face up to four years in prison. For betting fraud, the penalty can be up to seven years in prison. Allowing minors to participate in games will result in up to two years in prison, as well as a fine. In addition, a penalty will be applied to anyone who obstructs or hinders the supervision of games, with a penalty of up to three years in prison, in addition to a fine.
