Brazil sees great advantages for tourism in the legalisation of casinos

Casinos have been banned in Brazil for many decades and gambling is generally regarded as morally reprehensible. Recently, however, there has (once again) been movement in the "old order". Sports betting has been allowed to be officially brokered under certain conditions since 2018. Online casinos are a legal grey area. A draft bill has been submitted for the legalisation of terrestrial casinos. The liberalisation of such offers is expected to bring considerable benefits for tourism.

Brazil, the largest country in South America, has a complex, restrictive relationship with gambling and casinos. Such offers were largely banned in 1946 by a law signed by President Eurico Gaspar Dutra. This decision was made in particular due to concerns about public morals and the potential negative social impact. Since then, the operation of casinos and participation in gambling has been largely illegal, with the exception of some regulated lotteries and sports betting.

In recent years, however, there has been a remarkable shift in public and political opinion on this issue. The Brazilian government is looking for new ways to boost the economy, create jobs and attract international investment. The fight against the financial crisis, which has been ongoing since 2014, is still in full swing. In this context, the legalisation of casinos is seen as a promising option. Proponents argue that regulated casinos could not only generate significant tax revenue, but would also increase tourism.

The discussion on the legalisation of casinos has gained momentum at both regional and national level. Various arguments, debates and drafts for authorisation have been introduced in parliament, with recent developments indicating increasing acceptance and support. The Brazilian Congress is examining bill 2.234/2022 (which has been around for several years) and is therefore intensively discussing the potential benefits, risks and regulatory measures required.

According to press reports and official government statements, this paradigm shift towards a possible legalisation of casinos could contribute greatly to an economic upturn. One strategy is to position the country as an even more attractive holiday destination. With its diverse cultural attractions, breathtaking landscapes and vibrant metropolises, Brazil has the potential to take on a leading role in the global tourism sector. The legalisation of casinos could be an important catalyst in fully exploiting these opportunities, further expanding the tourism infrastructure and ultimately generating revenue on numerous levels.

Tourists should get what they want through bill 2.234/2022

Tourism experts as well as individual politicians believe that the legalisation of casinos would give a massive boost to the Brazilian travel industry. Those in favour have no doubt that a large proportion of visitors to the country are looking for entertainment. They see a lot of potential, especially in larger resorts that include casinos.

Bill 2.234/2022, which is currently under consideration, deals with the establishment of gaming facilities in such holiday resorts, among other things. These must therefore be of a certain size. The bill also regulates the distribution across the federal states. In addition to land-based casinos, online casinos, bingo halls and jogo do bicho (a traditional Brazilian game of chance) could also be regulated.

The draft law provides for a licence system in which gambling providers must obtain permits from the Brazilian government. The licences are granted under certain conditions and for fixed periods of time. Taxation of gambling activities is also included. Part of the tax revenue is to be channelled into various areas of public welfare - in particular education and health, sports promotion, security and surveillance. An important aspect of the draft bill is the social responsibility of gambling providers. Operators must provide programmes for the prevention and treatment of gambling addiction and ensure that minors do not have access. It also requires the establishment of a national regulatory authority responsible for monitoring and enforcing the regulations.

Las Vegas and Macau as role models

Several Brazilian politicians argue that gambling in their country is by no means excluded by the ban. In fact, thousands or even millions of reais are still turned over through illegal lotteries, dice games and other games. The state and public coffers would not see a cent of this.

This is different in many parts of the world - the examples of Las Vegas and Macau are particularly emphasised here. In these gambling metropolises, the positive aspects of legal casinos outweigh the risks. The cities could do more than well from the revenue. A safe environment would be guaranteed and illegal offers could be successfully controlled or even suppressed.

The proponents of bill 2.234/2022 see these advantages in the legalisation of casinos

Of course, legalising casinos in Brazil would initially mean an immense increase in tax revenue. However, some advocates do not actually see this development as the main advantage. According to these experts and politicians, the sector that stands to benefit the most is tourism. It can be assumed that, in the long term, the travel industry may even promise more revenue than would be generated by direct tax levies.

Celso Sabino, the Brazilian Minister of Tourism, made the following statement at a committee hearing:

"The most important thing about this measure is not just the revenue, but also the economic and social development that tourism will bring through the establishment of resorts with integrated casinos."

With the right strategy, gamblers with high spending power in particular, who often like to holiday in places where casinos are present, could be a major plus for tourism. The added benefit of this is that the increased volume of travellers would also boost the turnover of local businesses and ultimately the economy of the country as a whole. Many direct jobs could be created in the tourism industry as well as indirect jobs around it. All of this would bring many opportunities to support the country on its way out of the financial crisis.

Digression: What is the legal status of sports betting and online casinos in Brazil?

The path to the legalisation of sports betting was also marked by numerous discussions and legislative changes at the time. In December 2018, the then President Michel Temer finally signed a legal basis that legalised fixed-odds sports betting. The provisions, known as "Law 13.756/18", created the legal basis for the regulation of sports betting both online and offline.

In this context, we reported in the summer of 2023 on the plan to raise the betting tax in Brazil to 18 per cent. It is also interesting and alarming that betting fraud seems to be commonplace in Brazil's football leagues.

Nevertheless, many providers offer their services in the country - namely under licences from other countries that apply internationally.These operators often take advantage of the fact that there are no specific bans on offering their services over the internet. Brazilian players can play on these platforms, but without the protection and security that official domestic regulation would provide.

Conclusion

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