“It is undeniable that this unregulated market exists in Brazil, which, because it is not being taxed, fails to bring revenue to the public coffers,” says lawyer Elisa Tebaldi, a specialist in Tax Law at Ambiel Advogados, adding that “regulation is a global trend and Brazil is losing ground due to inertia.”
According to the expert, this market moves “more than BLR 20 billion per year. In terms of jobs, it was not enough for the more than 500 thousand workers in this market to enter formally, it is still estimated that another 250 thousand jobs will be generated. In addition, the promotion of tourism must be considered.”
The issue of gaming taxation was among the most controversial points of the House vote, however. Elisa Tebaldi explains. “The controversy involves two factors: on the one hand, to attract investment, it is necessary to provide for lower taxes and in line with international practice; on the other hand, many argue that taxes are higher due to the nature of the activity.”
Another controversy is the fact that Bill 442/1991 refers jointly to various games of chance such as casinos, bingos, jogo do bicho and sports betting.
“Although legalized in the same normative act and subject to the same general rules, each of these activities has peculiarities that must be dealt with individually and in the respective regulation - and Bill 442/91 itself already contains specific provisions for casinos, bingos, online games and jogo do bicho,” explains lawyer Beatriz Junqueira, also from Ambiel Advogados. For the expert, the dismemberment could further delay the approval of a law under debate for many years. “On the other hand, there are categories – such as the jogo do bicho and bingos – that face greater political resistance, so their segregation could facilitate the passage of the bill”, she adds.
Beatriz Junqueira also explains that fixed-odds sports betting has already been legalized by Law 13756/2018 and is still awaiting regulation. “The absence of regulation has left many agents in limbo, and the government has launched investigations into the irregular practice of activities by sports betting sites.”
The lawyer lists the advantages and disadvantages of gaming regulation for society. “From the point of view of tax revenue, foreign investments, generation of jobs and income, all activities, if legally exploited, have advantages. The disadvantages currently discussed are more related to a potential violation of 'good manners' - which do not necessarily have technical aspects. In addition to pressure from the evangelical caucus, much is said about the facilitation of illicit practices such as money laundering. The absence of regulation does not prevent the occurrence of illegal activities, however, regulation and the existence of control mechanisms mitigate risks.”
Finally, it is worth remembering that Brazilian legislation should not differ much from the legislation of the main democratic countries. “Brazil is one of the few countries that still hasn't legalized gaming, aligning itself with countries with a Muslim majority,” comments Beatriz Junqueira. “International experience already guides us about points of attention and success cases, presenting a guideline for Brazilian legislation.”
Beatriz Pozoni Junqueira
Lawyer at Ambiel Advogados, graduated and Master in Law from the Law School of the University of São Paulo (USP). LL.M. from the New York University School of Law (NYU) and a member of the New York Bar. Practice in various segments of Business Law, with solid experience in the areas of Competition Law, Compliance and Investigations, Corporate Law, Mergers and Acquisitions, Intellectual Property, and Regulatory Law. She also has experience in judicial and administrative proceedings. She served as an international associate at Baker & McKenzie in Washington, DC, USA.
Elisa Garcia Tebaldi
Lawyer at Ambiel Advogados, graduated in Law from the Pontifical Catholic University of Campinas (PUCCAMP). Specialist in Tax Law and Tax Planning by the Brazilian Institute of Tax Studies (IBET/SP). Experience in tax and customs matters, both in consultative and contentious matters. Member of the Customs Law Commission of the OAB de Campinas.
