Brazil Urgently Considering Online Gambling Regulation

Published October 4, 2015 by Lee R

Brazil Urgently Considering Online Gambling Regulation

Public perceptions of corruption need to be addressed to pass the iGaming legislation in Brazil.

Facing its worst recession in 25 years, Brazil is moving closer to legalizing gambling, with urgency. 

Economic Bailout?

The largest nation in South America's cash-strapped government is currently in negotiations with lawmakers to increase revenues through legalizing gambling, after Congress rejected other tax hikes proposed by President Dilma Rousseff's efforts to overcome the bulging national budget deficit.

Rousseff chief of staff Aloizio Mercadante offered the idea to lawmakers last week as an alternative to the government's struggle to pass a hotly contested tax on financial transactions.
Casinos have been banned in since 1946, while bingo rooms were outlawed in 2007 to stem money laundering. Federal lotteries and bets on horse racing are the only current forms of wagering permitted in Brazil. 

A government gambling legislation proponent in Brazil estimate that the county is losing up to 23.5 billion reais ($5.9 billion) in annual gambling taxes, with more to be otherwise lost from the 2014 World Cup and 2016 Olympic games.

Localizing Gambling Revenues

In a country where many Brazilians already play online casinos such as Dhoze Casino, Casino Cruise and Winner Casino, small center-right Party of the Republic leader Mauricio Quintella has been tabbed as leading the movement to regulate online gambling within national borders. He bemoans the loss of Brazilian gambling profits in the fact that Brazilians regularly travel to Paraguay, Montevideo, Las Vegas to gamble, leaving “all the money there.” 

Correcting Public Opinion

The main hurdle for the government may not be opposition within the government, but public opinion: Brazil is a country where many people associate gambling with corruption, for historical reasons as well as contemporary social ones.

The fact is there is a current scandal still running in Brazil over $2 billion plus in kickbacks focused on state-run oil firm Petrobras. Other scandals linking gambling to corruption include an aide to former president Luiz Inacio Lula da Silva being sentenced to 12 years in prison in 2012 for extorting bribes from an illegal lottery operator in 2004. These scandals have nothing to do with online gaming operators; they are just the root of current general public perceptions.

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