By Edgar Lenzi (*)

Brazil: 2017 and the expectations for Gambling

Edgar Lenzi has over 18 years of experience in the gambling market. He is founder and Director of BetConsult, a Company specialized on the Gaming and Gambling Markets, with services and activities focused on the Brazilian market. He is founder and partner at the LenziAdvocacia Law Firm, a full service law firm that offers complementary legal services to gambling clients.

Contacto: [email protected]

Brazil 
| 15/02/2017

Brazil has been living under the challenge of legalizing and regulating Gambling. The most important factors in favor of the legalization are the urgent need to raise tax money and the good possibility for the creation of new jobs. The Bills PLS 186/2014 and PL 442/1991 are being processed by the Brazilian Congress, the first one on the Senate and the second on the Chamber of Representatives.

Both bills are currently on the same legislative process status: they both are expected to be voted by the plenary of each House.

The Senate’s Bill, however, will have further discussions done by the Constitutional Commission of the Senate, before taken to vote by the plenary. Once either bill is approved, it needs to be voted by the other house, and then sanctioned by the President.

There was an urgency request for the voting of PL 442/1991 pendent since last year at the Chamber of Representatives Plenary. It was included on last week’s agenda and postponed for 02/14/2017’s, but it wasn’t voted because of lack of quorum.

It is possible to estimate that the legalization process – either by the approval of PLS 186/2014 or by the approval of PL 442/1991 – will be finished by the second quarter of 2017, and under regulation is expected to be elaborated on the following 6-8 months by the Brazilian authorities. If the PLS 186/2014 is approved, Caixa Econômica Federal (Public Bank) will be the entity responsible for oversighting the gambling activity, however, if the bill approved is the PL 442/1991 the creation of a new agency is expected.

Both bills are clear to determine that any company interested in operating gambling in Brazil should have its headquarters in Brazil, under the Brazilian laws. Then, many companies are already making their moves to have a Brazilian subsidiary, aiming to be ahead of the competitors once the legislation is approved.

The legalization will aim for most common gambling types, such as casino games, bingo games and online gaming. Sports betting, however, play an even more important role. Even tough both bills provide for the legalization of it, this activity can also be legalized by other ways. At this time, there is a provisional measure waiting to be signed by President Temer, which would legalize Sports betting at the same terms as LOTEX (Instant Lotteries) are being legalized. In a nutshell, a Caixa Econômica Federal Subsidiary is created and 51% of it is sold to a sole private operator, which shall conduct the operation alongside with public administration. The Government can choose to do the same with Sports betting. Also, according to sources from Caixa Econômica Federal, it is also possible that a new bill project could be presented whose object would be solely Sports betting.

Setting foot in Brazil can be important, not only because of the legal requirement, but also to have the opportunity to get to know the country as well as the Brazilian costumers, Brazilian market and the country’s peculiarities.

So, at this time, the real challenge for the major players is to analyze the Brazilian market and laws in a major perspective, and try to figure out the best timing to start efforts towards stablishing grounds in Brazil. Since setting up a Brazilian based company is not something that demands too many financial efforts, one can never be too early, however, being too late can set the difference between a successful Brazilian operation to a failed one.

In conclusion, it is possible to affirm that in any given scenario the Brazilian Gambling and Gaming market will present opportunities still in 2017 or in 2018, with the legalization of major activities such as Bingo Halls, Casinos and Online Gaming, and certainly with regards to Sports Betting and Instant Lotteries.

By Edgar Lenzi

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