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Brazil’s Senate could still approve a sweeping expansion of land-based gaming this year, even as senators form a special commission to review additional restrictions for online gambling, according to a key lawmaker.
Speaking at the SBC Latinoamérica Summit in Miami, the chief supporter of a pending gaming expansion bill insisted that Senate President Rodrigo Pacheco still intends to bring his legislation up for a final vote on the Senate floor prior to the end of 2024, despite pointed comments made by Pacheco earlier this week.
The Senate President told reporters in London on Monday (October 28) that Brazil had committed a “national error” by authorising online gaming before land-based casinos and that online betting “had contaminated the legalisation of gaming as a whole”.
Pacheco also told UOL that legislation for land-based gambling “can only move forward if there is some type of limitation as a reprimand to the current reality of online betting in Brazil”.
“They are two very different subjects, despite their similarities,” Senator Irajá Abreu told Vixio GamblingCompliance at the SBC Summit when asked to comment on the remarks of the Senate President.
“What President Pacheco said, and I agree with, is that we need to have better controls for sports betting, fixed-odds games. For example, prohibiting credit cards [and] the use of welfare programs for gambling. These are steps we can take to reduce the problem with online gaming.
“That doesn’t mean that we won’t regulate land-based gaming that today functions at the margin of the law on a clandestine basis, which gives no benefits to Brazil.”
Senator Irajá is the Senate’s rapporteur for Bill 2234/2022, which was first approved by the lower house of Congress more than two and a half years ago.
If also passed by the Senate, the measure would trigger a massive expansion of land-based gaming through at least 34 casino-resorts to be sited across Brazil’s 27 states plus many hundreds of bingo halls offering video-bingo machines.
The bill was narrowly approved by a Senate committee in June and supporters had initially been very optimistic that a full Senate vote would follow within a matter of months, if not weeks.
But that was before political controversy ignited over Brazil's pending regulatory regime for online gaming and sports betting following a series of high-profile reports of supposed problem gambling and money laundering involving the currently unregulated market.
Earlier this month, senators voted to create a special parliamentary investigatory commission (CPI) to probe online gambling and its impact on the budgets of Brazilian families and potential money laundering.
The CPI is expected to be formally established as soon as this week and will then have 130 days to hold a series of public hearings before producing a report that may include proposals for additional regulations that extend beyond those already approved by lawmakers and Brazil’s newly formed betting authority.
Pacheco told UOL that the CPI would allow senators to “identify shortcomings and make suggestions”, including for stricter rules or suitability requirements.
Irajá, from Tocantins state in central Brazil, repeated to SBC Summit delegates that his legislation for land-based gaming still enjoyed majority support among the 81 senators and was also endorsed by Brazil’s President and Vice President plus various tourism and other business interests.
That includes the powerful National Commerce Conference (CNC) that represents Brazilian retail businesses, which is actively lobbying against online betting and is supporting a pending legal challenge before the Federal Supreme Court to overturn a separate law that was approved by Congress last December.
Irajá echoed Pacheco’s remarks in highlighting that Brazil was unusual in choosing to legislate for online gambling without first regulating land-based gaming, “when the whole world did the opposite”.
He also acknowledged that the online betting sector was facing a “storm” and “image crisis” but noted that Brazil’s agricultural industry faced a similar challenge 20 years or so ago, and had since been able to recover.
“It’s a bad moment, but it will pass,” Irajá predicted.
During a separate conference session, a panel of Brazilian industry executives and legal experts suggested that much of the current negative attention falling on the sector was due to a lack of regulatory controls to constrain a market that boomed during the five-year period since an initial 2018 law that recognised the legality of fixed-odds betting.
Luiz Felipe Maia, founding partner of Maia Yoshiyasu law firm in Sao Paulo, said that regulations due to take full effect on January 1, 2025 are already more detailed than those of many international jurisdictions in terms of advertising, anti-money laundering, know your customer (KYC), and payments, among other areas.
Maia said he was optimistic that current pressures on the sector would serve to ensure that licensed operators adopt global best practices for the Brazilian market.
Still, it is a concern that policymakers are already considering stricter rules, particularly when it comes to advertising.
“If you restrict advertising at this moment when the market is just being regulated, then you are removing the ability of a licensed company to distinguish themselves from a company without a licence,” Maia warned.
