The animals in Jogo do Bicho.
Legalized gambling in the casino industry’s last great frontier took a crucial step forward Tuesday morning when a special gaming committee in Brazil’s Chamber of Deputies approved a plan to authorize full-scale resort casinos as well as video lottery and jogos do bicho games.
The proposal, which has been under review for nearly a year in the lower chamber of Congress as Brazil seeks to dig itself out of an epic fiscal mess, would allow for the introduction of as many as 34 resort casinos, with the possibility of even more under an exemption for the state of Minas Gerais.
The next step for the bill is a floor vote – thus bringing the country a step closer to ending a 70 year prohibition on gambling. Deputy Elmer Nascimento, president of the special commission, indicated Tuesday that he will seek such a vote this year, according to Magnho Jose, president of Brazil’s Institudo de Jogo Legais.
The proposed facilities would be complete with slots machines, table games, hotels and full service bar, restaurant and entertainment services – all of which are aimed at increasing tourism, generating much-needed tax revenues and stimulating the local economy.
The legislation requires that casinos be operated by companies that are experienced in the integrated resort space, maintain strong financial standing and have positive reputations in the areas in which they operate. The operating concessions for each property would be granted by the federal government for 30 years.
Each state and the federal district would be eligible for one such facility, while more populous states like Sao Paulo could obtain as many as three. Minas Gerais, the second-most populous state, would receive two, but it was granted an exemption that could also allow casinos that operated in the state prior to 1946 – when gambling in Brazil was banned – to reopen.
The bill would dramatically expand bingo halls, video lottery terminals and the country’s famous jogo do bicho games, which are illegal but widely popular in urban areas among the lower income classes.
The committee vote occurred Tuesday morning while the rest of the country is consumed by the theater of President Dilma Rousseff’s seemingly never-ending impeachment trial, which has dominated the Senate calendar for the past month.
Gambling legislation moved ahead concurrently in the Senate over the summer before hitting an unexpected setback earlier this month when a coalition of state-owned banks, police and civil groups objected over concerns that gambling would facilitate money laundering in Brazil’s already wildly corrupt political system.
To alleviate these concerns, Senator Fernando Bezerra Coelho of Sao Paulo – one of the bill’s key sponsors – has incorporated suggestions to allocate increased funding to the Federal Police to investigate money laundering to give state-owned banks like Caixa Economica Federal a major role in any new gambling regime.
The Senate’s consideration of legalized gambling is a key part of its Agenda Brasil proposal, which aims to spur economic growth and remedy the country’s fiscal problems. Under its current plan, which has yet to pass out of the committee level, 93 percent of gambling revenues would be allocated toward funding social security – which, as in the U.S., constitutes an enormous portion of overall discretionary spending, three percent toward penitentiaries, two percent to federal police and two percent to a national culture fund.
Bezerra’s plan differs from the one in the Chamber of Deputies in that it removes limitations on the number of casinos and bingo halls that can operate in the country. It also calls for a particular emphasis on the poorer regions of the country, including the north, northeast and center-west regions, as a means of supporting economic development and reducing inequality.
While Brazilian casinos, such as the Copacabana Palace in Rio de Janeiro, were some of the most famous in the world in the first half of the 20th century, all forms of gambling were banned after World War II.
Over the past 20 years, however, the country has taken a closer look at revising that ban and has implemented some nominal reforms in the realm of bingo and lotteries. Advocates are confident that this time around, Brazil’s fiscal situation – including a budget deficit that tops a whopping 10 percent of gross domestic product – will provide the impetus for an end to the 70 year prohibition.
