Is Brazil finally legalizing the gambling sector?

In terms of population, Brazil is the sixth largest country in the world. The country fascinates people not only because of the impressive landscapes and exotic animal worlds. Many are not even aware that gambling is (so far) banned across the country, with a few exceptions. Recently, however, there have been more and more initiatives calling for the legalization of the gambling sector in the South American state.

There are now many supporters of these initiatives, but a major opponent still stands in the way: the Church. Brazil has had the global corona crisis firmly under control for many months. This is having a particularly devastating impact on the country’s economy. So has the time finally come to legalize the gambling sector in order to increase tax revenues and strengthen the economy?

Sports betting already largely legalized in Brazil

Brazilian President Jair Bolsonaro has already paved the way for the privatization of the national sports betting sector soon. To this end, he has signed a decree by which sports betting will be formally included in the investment partnership program (PPI) offer. So far, the situation in Brazil has been that sports betting could only be sold by the national bank CAIXA. With the planned opening or privatization of the sports betting sector, politicians are hoping for additional tax revenues in the billions. At the moment they are already working on a licensing procedure for private sports betting providers.

Land-based casinos also soon allowed?

The abolition of the state monopoly on sports betting could be the first step towards privatizing the entire gambling sector in the country. From the direction of the national tourism ministry, calls are therefore getting louder to legalize land-based casinos and gambling halls as soon as possible. In concrete terms, the ministry envisions gigantic casino resorts which, similar to those in gambling metropolises like Las Vegas, are intended to attract thousands of tourists from home and abroad. This is intended to cushion the economic consequences of the corona pandemic, as new tax revenues can be generated. In this respect, too, President Bolsonaro has shown himself to be more and more open. According to the Brazilian magazine GazetaEsportiva, the minister responsible for tourism has already started to draw up a practical implementation plan.

The legalization of land-based arcades in Brazil is hoped to generate additional tax revenues of more than three billion euros. In addition, it is important to regulate or legalize the gambling sector in order to curb the illegal offer of gambling. It is questionable whether the concept “With gambling out of the crisis” is actually viable. Finally, legalizing the gambling sector also has its dangers. For example, without adequate education and prevention, gambling addiction could quickly gain in importance. To prevent this, efficient regulation with strict player protection regulations is necessary. At the same time, the legalization of land-based gambling venues could help make illegal activities such as money laundering more difficult.

The gaming market is becoming increasingly important worldwide

The opportunities of the gambling market have not only been recognized in Brazil. For years, the revenues generated with gambling have been increasing. While the worldwide turnover in the casino gambling market was still US $ 99.88 billion in 2006, only a few years later in 2010 it was already US $ 117.58 billion. Since then, the numbers have continued to rise, with a new high of 182.77 billion US dollars being reached in 2015 (source: Statista). The following table shows the development of global gaming sales 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

Gambling in Brazil – a change is imminent

There are currently more than 211 million people in Brazil, making it the sixth largest country in the world in terms of population. It is all the more astonishing, especially for people in Europe, that gambling was largely banned for such a long period of time. Only through the state monopoly do Brazilians have the opportunity to gamble. Since many people still felt the longing to take part in gambling, they often fled to illegal providers. With the planned opening of the gaming market, Brazil would have the chance of positive development in the gaming industry. It is questionable whether the people in Brazil would be aware of their responsibility and would play responsibly. But if sufficient protective mechanisms were developed and the regulation were strictly in accordance with the regulations, one would basically not have to worry about a negative development. However, it is still unclear how Brazil intends to deal with the booming online gaming market. So far, the discussion has been limited to the legalization of land-based gambling venues and the stationary sports betting market.

Conclusion

It is an interesting move by the Brazilian ministry to want to fight the economic consequences of the corona pandemic by legalizing the gambling sector. It is obvious that the liberalization of land-based casinos would generate considerable tax revenues. Estimates assume an annual tax volume of over three billion US dollars. Nevertheless, the abolition of the state gambling monopoly should not be done too hastily, so that there is enough time to develop a functioning licensing procedure. The head of state and government Jair Bolsonaro has already taken the first step by opening up the sports betting market. In a further step, the land-based gambling sector could then also be legalized. And then as a tourist in Brazil you could probably soon see the construction of the first casino resorts. Cities such as Sao Paulo or Salvador da Bahia in particular could use their potential and, like Las Vegas, develop into gaming metropolises of significant economic importance.