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Brazil on the Brink of Legalising Online Gambling

brazil-online-gamblingBrazil is taking all possible measures to introduce a structured online gambling market. The House of Representatives committee gave a green signal to an amended version of Brazil’s gambling legislations.

CEDN, which is a special committee in Brazil on National Development, gave a go ahead to a number of amendments, that were proposed by the senators for SB 186/2014.

The bill is hopeful of changing the gambling market of Brazil, with the introduction of video lottery stations, casinos and various other possibilities such as online sports betting, casino products and bingo.

With the approval of the initial and original version of SB 186/2014 by CEDN in December, a total of 16 amendments were made by the senators, out of which 5 were added to the original text copy, including preventing public officials and their families from their participation in gambling businesses and certifying the suitability of future gambling licensees.

SB 186/2014 also includes specific tax rates for different activities related to gambling. The high rate in the bill is justified, as the physical structure would be taking up a good amount as the startup cost, along with maintenance cost, which will eventually enable the online operators to generate a high profit margin, maintaining their ability to pay.

It is still unclear in terms of the total number of licenses that Brazil looks to issue, along with speculation over a possible tie-up between an international operators and a local body. Even if there is a possibility of a tie-up, the company will have to take up a local office. Central bank of Brazil meanwhile will be busy blocking online payments between unauthorized bodies.

Gambling license fee is still undecided, along with the duration period. But if we take a look at the bill, it states that all the licenses of gambling that are land-based will be for a duration of 30 years. In case of breach of the license rules and regulations, a fine between R10K – R100K (US $3K – $138K) will be payable, while in situations where the license has not been issued, jail term of 12 months will be servable.

There will be special entertainment complexes, which will be built exclusively for land-based casinos. The total casino floor is not permitted to be more than 10% of the total footprint area of the complex. According to the bill, around 35 casinos can be thought of in total, with a minimum of 1 casino and maximum of 3 casinos per state. Other companies too can only have a maximum of 3 casinos, just like a state.

Brazilian government which is currently short of cash, can predict an annual tax revenue of R 15b which is equivalent to $4.15b, if the bill is successfully passed. Brazilian Institute of Gaming’s president has already been quoted saying that nearly 200k Brazilians move out of the country each month, so that they can gamble and up to 70% of the gamblers that can be found in various Uruguayan casinos are from Brazil.

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However, people will still have to wait to see how the corruption scandal involving Ex-Brazilian presidents and the current president will have an impact on the passage of the bill or its enactment.

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