Regulation
Regulation
7. The legal entity interested in exploiting games of chance in Brazil, including through electronic means, shall be organised under Brazilian laws, with its head office and management in the country.
8. Bingo games will be explored exclusively in appropriate rooms, called“ bingo houses”, using the process of extraction free from human contact, which ensures full fairness of results, offering prizes in cash only.
9. A maximum of one bingo house shall be accredited for each 150,000 inhabitants in the municipality where the establishment will operate. The accreditation is valid for 20 years, after which it can then be renewed for the same period of time.
10. The exploitation of games of chance in casinos is allowed upon accreditation, and is valid for 30 years by a body to be designated by the federal executive branch.
11. The casinos shall operate in integrated recreation centres built specifically for that purpose.
12. For online games, the central server must be physically located in Brazil. In March 2018, the reporter presented this last version of the bill to the CCJ, where it was rejected by 13 votes to two, on various grounds:( a) the bill does not take into account the need of a regulatory agency, which could only be proposed by the initiative of the president;( b) the lack of any definitive studies on the online games market and its regulatory models;( c) the existence of serious defects on the mechanisms of money laundering controls in different jurisdictions;( d) the lack of specific regulation on applying penalties;( e) the recommendation of specific control over“ VIP rooms” in casinos.
Following its rejection by the CCJ, the bill is currently waiting to be analysed by other committees and to be voted on by the Senate plenary. According to Senate president Eunício Oliveira, who is responsible for deciding matters included on the plenary agenda, this is not scheduled to happen this year.
2.2. Chambers of Deputies Bill( 442 / 1991) A Special Committee has also been set up at the Chamber of Deputies to discuss another bill aimed at legalising gambling in Brazil. This has been a recurring subject in the house, with more than 25 bills presented since 1991. The last version of the bill, approved by the Special Committee, makes the following relevant provisions:
1. The proposal determines exclusive incumbency to the federal government to regulate, license( by authorisation or concession) and inspect all operations of game of chance activities.
2. Only a legal entity regularly organised in accordance with Brazilian law, with its seat and administration in the country, may be the holder of a concession for the commercial exploitation of games of chance.
3. The federal government may grant a 30-year licence for the exploitation of games in casinos located in integrated leisure complexes. These will be issued in proportion to the number
of inhabitants of each state, with a maximum limit of three casinos per state( up to 15 million population: one casino; 15-25 million population: two casinos; greater than 25 million population: three casinos)
4. Together with the federal government, the states and federal district shall regulate, license and inspect the operation of jogo do bicho and also operate the state lottery.
5. Together with the federal government, the municipalities shall regulate, inspect and issue 20-year licences for the operation of bingo.
6. Settling of bets will be exclusively paid in national currency or by debit cards.
7. All operators of games of chance must use a control management system, in order to allow the federal government and the federal tax authority to monitor, without interruption, the bets and payments of prizes in each game modality, in all of the previously authorised machines or systems, in real time( online).
8. Game machines( video bingo, electronic games, slots, etc.) are prohibited outside a physical game hall( ie casino, bingo, jockey club, soccer stadium), must obey an 80 % payout ratio, and will need certification by an internationally renowned laboratory.
9. Online games will be provided exclusively by national licensed companies, granted by the federal government and by the states / federal district, and will maintain an online connection with tax inspectors’ systems.
10. Bingo games will acquire a minimum investment based on city population( up to 500,000 inhabitants: R $ 1.5m(€ 333,000) share capital; 500,000 to two million inhabitants: R $ 3m share capital; greater than two million inhabitants: R $ 5m share capital).
11. Bingo games will need a reserve fund to act as a guarantee for prize payout and maintain a minimum of machines based on its share capital( R $ 1.5m share capital: 50 machines; R $ 3m share capital: 300 machines; greater than R $ 5m share capital: 500 machines).
12. Skill games will be free of concession or licence even when related to drawing and prizes. There have been no other official meetings of the Special Committee since the approval of this last version.
3. Forecasts There is no secure forecast for the bills, mainly because of the political crisis that has taken place in Brazil since the beginning of the“ Lava- Jato” corruption investigations in March 2014. The impeachment of former president Dilma Rousseff and a two-year economic crisis impacted the gaming bill discussion in both houses of Congress.
Guilherme Mussi, the reporter of the Special Committee on the Chamber of Deputies, is not optimistic about the bill being approved this year. The expectation is that this discussion will be kept on hold until the start of the new legislature in 2019.
134 iGamingBusiness | Issue 111 | July / August 2018