Check out excerpts from the interview below:
GMB - As a member of the Working Group that prepared the revision of Bill 442/91 that legalizes all types of gaming in Brazil, what assessment do you make of everything that has been carried out so far by the WG?
Herculano Passos - I even participated in the Special Commission of this project, in the past, when it was approved. Now, I participated in the Working Group in which we had a period of 90 days to present the report, which was very well built with the rapporteurship of Deputy Felipe Carreras. We participated, took the sketches, gave our suggestions, and came up with a report that I think was very well done. Of course, it can be changed, debated and discussed, but I understand that the text was very good.
And was this time enough to arrive at this text, which, as you said, was very good?
It was enough. Also because this project has already passed through a Special Commission and has already been debated with members of all political parties and, as we have only reviewed what has already been approved by the Special Commission, I understand that the deadline was good. We just gave an update, because things change. We approved it before the pandemic and if it didn't come, we would have already approved this matter.
Much has been said about the gaming market in Brazil within the scope of the Working Group. What is the potential of this market in the event of approval of all the intended modalities, such as resort casinos, bingos, jogodo bicho, machine rooms, urban casinos, sports betting and turf?
Brazil needs jobs, income and resources. This article will definitely bring those benefits. For you to have an idea, in relation to employability, our expectation if we approve three types of gaming, we will certainly reach approximately 650 thousand jobs with a formal contract. This is very significant especially at a time when Brazil is reaching a very high unemployment rate. This will definitely benefit a lot of people. These 650 thousand jobs are direct, apart from indirect jobs.
Regarding the collection, only with casinos the expectation is a collection of around R$ 20 billion. We have this calculation based on the survey that is carried out on the collection of taxes on the activity of casinos around the world based on the movement of activity, which is equivalent to 1% of GDP. The Brazilian GDP represents R$ 7.5 trillion per year and 1% means R$ 75 billion. So, this will generate 30% of tax, which gives a total of just over R$ 20 billion, to be destined for the coffers of Federal, State and Municipal governments.
You mentioned three verticals. More modalities are expected to be approved in the event of a complete regulation of the gaming sector? Which are they?
They would be the jogo do bicho, bingos and casinos. Online betting needs to be calculated, as we don't have them yet, but they move the economy a lot. Today, these online bets already exist in Brazil and gamblers play over the internet, but the country does not receive anything on the betting movement because the sites are based outside Brazil and taxes go to other countries.
It is said that this vertical has a turnover of R$ 4 billion.
That's what they say. We didn't do this check, only bingo, face-to-face casinos and jogo do bicho. These bets, if they reach R$ 4 billion, will add a lot to the movement.
There will be another R$ 120 million in taxes!
That’s right.
Has the government already realized these values and that this revenue is so neccessary?
The Ministry of Economy is in favor of the project, as it understands that it needs collection. And it's a new fundraiser. By approving the activity, it will not cause movement from one place to another. It will be new money in the government's safe and it is escaping, as the casino, bingo and jogo do bicho already work in Brazil in secret. That is, they do not generate taxes. And the people who work on these gaming equipment don't have a formal contract because the activity is not legal. That's why we need to legalize to formalize all this and for people to have a formal contract, which guarantees numerous benefits, such as retirement, health insurance and everything else that a person with a formal contract provides.
The substitutive text imposes very strict rules for the operation of the different types of games. I would like you to comment on the importance of this for the strengthening of the industry.
These are not strict rules. The idea is to have one casino per state in those with up to 15 million inhabitants. So, most have this right, not that it's mandatory. And in the state that has a casino with an integrated resort, two tourist casinos can be installed. And there are three states – Bahia, Rio de Janeiro and Minas Gerais –, which have a population between 15 and 25 million inhabitants, where two casinos can be installed in integrated resorts. And following the same concept, there will be four other tourist casinos in each state. In the case of São Paulo, with a population of over 25 million, three casinos may be installed in integrated resorts and, consequently, six tourist casinos. So, this is the proposal of the report that we built together with Felipe Carreras. I think it's fair and the text was good on this question.
Who will supervise the casinos in Brazil will be the federal government. Everything will be under its responsibility and the entire collection will be divided to the Union, States and Municipalities. Of the total, 50% of the amount collected will be with the federal government. The other 50% will be divided, half and half, for the States and Municipalities. If we imagine the R$ 20 billion in collections, R$ 10 billion will go to the federal government, R$ 5 billion to be divided between all states and the other R$ 5 billion, to be shared between all Municipalities. It will be new money and we cannot forget that the Municipalities where casinos are installed will also receive municipal tax collection. An integrated resort casino will represent about 3% of the resort's space, which will also have rooms, shopping mall, convention center, restaurants, stores, sporting events and other tourist facilities. It will be an important generation of enormous employment and a very important economic movement. I've met with the mayor of Las Vegas, who told us that 70% of all revenue doesn't come from gambling, but from activities around gambling.
When I speak of great rigidity in the substitutive, I will cite an example. The requirement of minimum paid-in capital to make certain activities unfeasible. Is not imposing the payment of R$ 10 million for a businessman to exploit the jogo do bicho activity too high for those who already exploit illegally?
I don't think R$ 10 million is a very high amount. You have to take a lot of responsibility for the game. R$ 200 million for casinos in integrated resorts and R$ 100 million for tourist casinos. I don't think it's much.
The approval of the urgent request for voting on the replacement of the rapporteur Felipe Carreras was a great arm wrestle between supporters of the gaming industry and opponents of the activity, especially evangelicals. What analysis do you make of this clash that took place at the end of December?
This clash was very important. As I said, the project was mature and had been discussed for a long time. It's been 30 years since we discussed the legalization of casinos. I arrived seven years ago and I'm in my second term and I've been hitting this button for a long time. So, at the end of the year we discussed the approval of urgency. I stayed up late defending the project as a representative of the Working Group and having debates especially with the evangelical bench and explaining the importance of the benefits that legalization will bring. It was a great victory to approve the urgency and start the debates. In addition to approving the urgency, we opened the topic for debate and presentation of amendments in January. In other words, the debate is already open and when February arrives, President Arthur Lira should guide the project so that we can finish the discussions, receive the proposals for amendments or highlights and approve or not those that the majority of the Chamber deems convenient and vote on the matter. This is going to run fast now in February. I am confident that it will even be approved by the urgency vote, which was a very positive signal in our favor.
The arguments of money laundering, tax evasion and risks of addiction continue to be the discourse of this portion of opponents. How to end this prejudice and show the reality and seriousness of the industry?
The casino industry, for example, in Las Vegas, in relation to gambling, it can only be fought in legal gambling. The illegal sector that works in Brazil does not allow a player with problems to be identified. When it is legal, the casino organization identifies the player who is a gambler. And that allows him to be banned from playing, even with the consent of his family. That's how it works in Las Vegas and that's how we want to do it in Brazil. In fact, 1% of the funds raised by the government will be allocated to a program against gambling. As for money laundering, it will not happen in casinos as winnings over R$10,000 will have to be reported to the Ministry of Economy. It's easier to launder money at a gas station or any business. In the casino, it will not happen due to the degree of inspection, control and prevention, which does not happen in clandestine gambling.
How are parliamentarians in favor of legalizing gaming – and in particular members of the Working Group – working during the legislative recess to gain more support for the approval of the Gaming Regulatory Framework? Have there been any suggestions for amendments or highlights to the final report?
No. I believe the amendments will arrive in February. The deputies are in recess and so far we have not received amendments. When the legislative work returns, we will certainly receive amendments and we will debate them. We are also not working in this period to convince, as everything has already been exhaustively discussed. I myself have debated a lot, including with the contradictory, to hear them and in the text we take into account the contrary opinions. We respect evangelicals, but gaming shouldn't be a religious discussion. Why is the evangelical bench against it? To this day I don't understand the reasons, because in all parts of the world where the Christian religion is predominant, the casino is legal.
The United States is an example!
Truth. The United States is the most evangelical country in the world and it is legal there. This is a typical example. And in Latin America, only two countries, Brazil and Cuba, do not have legal gambling. We are losing a lot of resources and tourists that could come here, as well as revenue from players who go abroad to play. In the G20, only in three countries casinos are not legal: Indonesia, Brazil and Saudi Arabia. That is, Brazil and two Islamic countries. But gaming is legal in Brazil, where lotteries and horse racing are explored. That's why we want to legalize those who are operating underground.
President Jair Bolsonaro has said he will veto the legalization of gaming. In your opinion, is he just making a scene for the evangelical bench, since he admits that if he vetoes it, will Congress override the veto?
Our expectation is that if he vetoes it, Congress will override the veto. First we have to pass it in the House and Senate. That's the rite. Then it will go to him to enact and, if he vetoes it, we will probably override the veto and the bill will become law. But things change, because he is saying that he will veto, but with pressure and arguments he may change his mind and not veto. So, I hope he doesn't veto, otherwise it will take longer for the matter to be approved. And who loses from this is the government itself. I see no harm, only advantages over legalization.
2022 started off very well, with a solid project ready to be discussed and voted on. Do you believe that the time has come for Brazil to join the list of countries with legal gambling?
For sure. I'm very confident. I have defended this proposal since I entered the Chamber. When I took over as a federal deputy, I formed the Mixed Parliamentary Front in Defense of Tourism, because gaming is a tourist equipment, so I defend the legalization of the sector, which generates employment and income, in addition to benefits through taxes for the government. I defend and will continue to defend until the end. It's mature and time to approve. Over time, many parliamentarians changed their minds and became convinced that it is better to approve.
Source: Exclusive GMB
