The idea is supported by at least two close councils to the stand-in President: Henrique Eduardo Alves (Minister of Tourism) and Geddel Vieira Lima (Government Secretary), both member of the Brazilian Democratic Movement Party (PMDB).
According to Alves, the proposal to legalize would include bingo halls, casinos and a Brazilian lottery-based game called "jogo do bicho".
"The idea is to legalize all these games. At the moment this activity goes on illegally, under the radar, thus not generating any profits for the state," he said.
Alves said that Temer is "sympathetic" to the idea, but he has not decided on a course of action since assuming Presidency last week.
““Minister Geddel Vieira Lima, who will be responsible for the relations between the stand-in government and Congress, said he was in favour of the legalization
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The PMDB minister maintained that the legalization of gambling would increase tourism and could boost Brazil's economy.
Brazil's Public Prosecution is against the idea. It has outlined the potential risks of increased levels of corruption and money-laundering.
Minister Geddel Vieira Lima, who will be responsible for the relations between the stand-in government and Congress, said he was in favour of the legalization.
So far, no consensus has been reached regarding the overall sums expected to be generated by legalizing gambling.
Minister Henrique Alves believes the state could benefit from up to R$20 billion (US$ 5.7 billion) per year. He claimed it would be as lucrative as the CPMF, Brazil's famous tax on financial transactions that raised billions of reais for the state until it was abolished in 2007.