"We believe that all the forms of gambling currently practiced should be legalized in Brazil"

What is your role in the current efforts to legalize gambling in Brazil?

The Brazilian Institute for Legal Gaming – the IJL – which I have the honour of chairing is a non-governmental organization that advocates the legalization of gambling in this country. Today, the IJL is not alone in this endeavour; various social and political bodies as well as other entities are also working for this sector to be legalized and regulated by the state.

One of IJL's achievements has been to produce and publish reliable economic studies on the general movement of bets in "clandestine" or "tolerated" gambling, and the market potential of creating a regulatory framework for [legal] gambling, thus providing the National Congress and the Executive with a new scenario. This ground-breaking moment has meant a paradigm shift in the legalization process in this sector.

Why is this the ideal time to regulate gambling in Brazil?

Other than Muslim countries, Brazil may be the country with the longest-standing gambling ban in the world. In October this year it will be 75 years since Brazil passed the Lei de Contravencoes Penais – the “Law of Penal Contraventions” – which prohibited the “Jogo do Bicho”1, and on April 30 it will be 70 years since we instituted a ban on operating casinos.

This prohibitory legislation did not change the gambling scene in Brazil, which has an annual turnover in illegal bets of over R$19.9 billion according to a study carried out by the Lottery Newsletter (the BNL) in partnership with the Brazilian Gaming Institute or IJL, compared with R$14.2 billion in legal gambling. In other words, for every R$3 bet in Brazil, only R$1 goes to official, legal gambling.

In addition to [what we would] gain in taxes and foreign investment, the jobs of 450,000 people working in Jogo do Bicho would immediately gain legal status and at least another 150,000 would be created in other types of gambling. That is to say, the state and society have only to gain from legalization.

What stage are you at with regards to legalization? What timetable do you anticipate for finalizing this?

PLS2 186/2014 has been approved by the Special Commission for National Development (CEDN) in the Senate; this legalizes casino operations ([considered as an] integrated leisure and online complex), bingo (in person, online and videobingo), electronic games (video games) and Jogo do Bicho.

Besides the Senate, the House of Representatives is also analyzing and condensing the main proposals for legalizing all forms of gambling through the [work of the] Special Commission for the Regulatory Framework of Gaming in Brazil. Currently, the Special Commission is in the final phase of public hearings [at which the issue is being discussed] with various sectors of society.
As the voting schedule is determined by the workload of each legislative house, it is difficult to predict a date for completing the process. In the Senate, the only thing still lacking is a vote in Plenary Session on PLS 186/2014.

In the House of Representatives we are still waiting for the presentation, discussion and voting on the report with the replacement of Congressman Guilherme Mussi, and the subsequent vote by the House in Plenary Session. In addition to this, in the middle of proceedings we saw the eruption of a major political crisis in Brazil culminating in the application to open impeachment proceedings against President Dilma Rousseff by the National Congress.

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Regardless of the end result, immediately after the vote on impeachment the creation of a regulatory framework for gambling will be back on the agenda of the legislature

 

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What are the main challenges you identify at present and how can they be resolved?

As advocates of the proposal, we have faced many challenges and we know that we still have others to come. The legalization of gambling in this country depends on the National Congress, and in order to succeed we will continue trying to make every parliamentarian aware of the advantages and the need to create a regulatory framework for this sector. Furthermore, we believe that all the forms [of gambling] currently practiced should be legalized – that is to say that the Congress should legalize the entirety of the demand that currently exists in our society.

Another major challenge will be to define the model for authorizing the running of various types [of gambling operation], putting national and international operators on an equal footing, in addition to ensuring legal security for investors.

How are legislators going about understanding/learning about the industry in order to be sure that the right decisions are being taken?

The text before the Senate is practically finalized and ready to vote on in plenary session. The House of Representatives opted for a different strategy, however, and has held 15 meetings and 9 Public Hearings to hear 23 speakers including both technical experts and Brazilian and international authorities in the field. Furthermore, members of the House are studying the subject and visiting many legalized gambling markets and learning from best practices.
Being one of the last markets to be legalized, Brazil will have the advantage of being able to make the most of the best practices observed in other countries and avoid mistakes.

For someone looking at Brazil's political situation from the outside, one gets the impression that the regulatory process may be delayed due to the impeachment discussions currently taking place - What is your opinion on this situation?

Initially, we understood that the period for considering the legalization proposals in the National Congress was already compromised by the impeachment proceedings against President Dilma Rousseff. The National Congress is focussing all its attention on these proceedings. But we also believe that this political environment will be resolved in the coming months.

Regardless of the end result, immediately after the vote on impeachment the creation of a regulatory framework for gambling will be back on the agenda of the legislature. Moreover, the legalization initiative comes from the National Congress and not the Executive, so the process will continue regardless of the outcome of the impeachment.

You'll be attending the Brazilian Gaming Congress (BGC) in Brasilia. What are your expectations for the event? What would you like to take away from this event, and who would you like to meet there?

We will certainly be present at this event. And it should be borne in mind that the Brazilian Gaming Congress (BGC) has played an important part in the process of legalizing gambling in this country, because it was starting with the first BGC that the Brazilian Institute for Legal Gaming really began its [lobbying] activities in relation to the National Congress and the Executive.

We believe that the most important thing in this second event is to continue learning about the best practices and how other countries have dealt with the transition from “clandestine” or “tolerated” to legalized and regulated gambling.

Have the advocates [of this bill] had problems with those opposed to the legalization of gambling in this country?

I'd like to add here that there are problems we face with those opposed to legalization, who persist in believing that gambling in Brazil will start with the legalization of this sector by the state. Some political figures and a small part of the media who want to keep gambling illegal are very invested in the fallacy that running a gambling operation is a classic means of money laundering.

But in the words of a wise friend who prefers to remain anonymous, when it comes to gambling we only have two options: legal or illegal. The "no gambling" option is an impossibility, since over 20 million Brazilians play the Jogo do Bicho numbers game every day.

Brazil has to grow up and face the gambling question pragmatically, without involving issues of a moral or religious nature. It is necessary to legalize and regulate gambling rather than ban it, because prohibition leads to illegal gambling and illegal gambling leads to corruption. And as well as this, with legal gambling the state and society are the winners.