Is Brazil finally legalising the gambling sector?

According to the number of inhabitants Brazil is the sixth largest state on earth. The country fascinates the people not only because of the impressive countryside and exotic animals. However many do not know that gambling is, bare a few exceptions, prohibited in the whole country. Lately there have been more initiatives to promote the legalisation of the gambling sector in the South American state. Meanwhile there are many who are in favour of this initiative, but there is still one main opponent: the church. The worldwide Corona crisis has already affected Brazil months ago. Is it finally the right time to legalise the gambling sector to be able to increase the tax revenue and strengthen the economy?

Sports betting is widely legalised in Brazil

The Brazilian President Jair Bolsonaro has already laid the way, to privatise the national sports betting sector. He signed a decree in which sport betting is absorbed in the tenders of the Investment Partnership Programme. Up till now the situation in Brazil has been such that sports betting could only be marketed by the National Bank CAIXA. Through the planned privatisation of the sports betting sector, the politics hopes to see further increase in tax revenue of several millions. Currently there are already preparations for a licensing system for private sports betting providers.

Will country based casinos also be permitted?

The abolishment of the state monopoly in sports betting could be the first step towards the privatisation of the whole gambling sector in the country. The Tourism Ministry is therefore calling for the imminent legalisation of casinos and gambling halls. The Ministry has in mind concrete gigantic casino resorts similar to those in the gambling metropoles as Las Vegas, which should attract local and foreign tourists. In this way the economic repercussions of the Corona Pandemic will be absorbed, because new tax revenues will be generated. President Bolsonaro has always displayed more openness, in this regard. According to the Brazilian Magazin GazetaEsportiva the responsible minister has already a practical implementation plan in the pipeline.

Through the legalisation of the local casinos one hopes to increase the tax revenue in Brazil by a further 3 billion Euro. Besides, it is important to regulate the gaming sector, to contain the illegal aspects of gambling. It is questionable, if the concept “Gambling the way out of the crisis” is really viable. Finally the legalisation of the gambling sector also poses some risks. Without adequate information and prevention, gambling addiction could gain in importance. To be able to prevent this, it is necessary that there are efficient regulations with strict provisions with gambler protection. Parallel to this, the legalisation of the local casinos could contribute to the fight against illegal activities, such as money laundering.

Gambling market becomes worldwide always more important

It is not only Brazil that has come to realize the opportunities of the gambling market. In the past years the revenue generated from gambling has kept increasing. Whilst the worldwide turnover in casino gambling markets in 2006 was still 99.88 billion US-Dollars, a couple of years later, in 2010, the revenue was already 117,58 billion US-Dollars. Since then, the figures have increased constantly, whereby in 2015 a new record was reached with 182,77 billion US-Dollars. The following table shows the increase in worldwide revenue from gambling, in US-Dollars:

• 2006: 99,88 billion
• 2007: 107,69 billion.
• 2008: 109,73 billion.
• 2009: 207,31 billion.
• 2010: 117,58 billion.
• 2011: 132,41 billion.
• 2012: 146,68 billion.
• 2013: 159,71 billion.
• 2014: 171,04 billion.
• 2015: 182,77 billion.

Source: Statista

Gambling in Brazil – a radical change is imminent

There are actually more than 211 million people in Brazil, whereby judging by the population numbers, this makes it the sixth largest state in the world. This makes it even more surprising, especially for Europeans, that gambling has been forbidden for such a long time. The Brazilians have the possibility to operate gambling exclusively and solely. Since a lot of people naturally had the urge to participate in gambling, these more often than not, turned to illegal providers. With the planned opening of the gambling market, Brazil has the opportunity to enjoy a positive development in the gambling branch. It is questionable, if the people in Brazil would be aware of their responsibility and if they will play responsibly. However, if adequate protection mechanisms are put in place and the regularisation is done strictly according to the rules, there should not be any worries about negative consequences. It is still not clear, how Brazil will tackle the booming online gambling market. Up till now the discussion has been mainly on the legalisation of local casinos and the fixed sports betting market.

Conclusion

It is interesting, that the Brazilian Ministry wants to fight the economic consequences of the Corona pandemic by legalising the gambling sector. It is clear, that the liberalisation of the local casinos will generate a substantial increase in revenue from taxes. It is estimated, that the yearly tax volume will be over three billion US-Dollar.

In spite of this, the abolition of the state monopoly in gambling should not be rushed, so that there is ample time to develop a functioning licensing system. The head of state and government Jair Bolsonaro has already done the first step by opening the sports betting market. In a further step, the local gaming sector could also be legalised. And then, as a tourist, one could soon hope to enjoy seeing the first casino-resorts being built. Especially cities like São Paulo or Salvador da Bahia could make use of this potential and develop to become gambling metropoles with meaningful economic importance, just like Las Vegas.

Image source: https://pixabay.com/de/photos/brasilien-rio-de-janeiro-2910129/