The government is expected to legalise gambling within the year in an effort to raise tax revenues to mitigate budget deficit in Brazil.
Brazil.- After a 70-year ban, the Brazilian government is finally expected to legalise gambling as early as this year. The decision comes as part of an effort to raise tax revenues to plug the country’s budget deficit, drawing huge interest from the world’s casino operators and betting companies.
According to gaming experts, the popularity of Jogo do Bicho is proof of how successful Brazil’s gambling industry could be if it only were legal.
William Hill, Ladbrokes, the US casino group MGM Resorts International and Sweden’s Betsson and NetEnt have all expressed their interest in expanding into Brazil once the sector is regulated.
“It would be one of the most significant events in gaming history if Brazil opens up to the gambling sector,” said William Hill in a statement. “The Brazilian market has enormous potential with a population that has long enjoyed a love affair with football which is Ladbrokes’ fastest growing product,” stated Ladbrokes. On its par, MGM highlighted its interest in “large-scale integrated resorts.”
By estimations made by Brazil’s Legal Gaming Institute (IJL), based on the calculation that gambling markets typically account for about 1 percent of a country’s gross domestic product, Brazil’s market could be worth R$55 billion (€15.16 bn) in total bets placed.
“Gambling has always been somewhat of a taboo here, but in the rest of the world it is an entertainment industry,” said Magno José Santos de Sousa, IJL’s president, adding that Brazil is losing R$6 billion (€1.66 bn) a year in taxes in the R$20 billion (€5.51 bn) illegal gambling market.
Both Brazil’s lower house and senate are discussing separate legalisation bills, which include proposals to force foreign players to take on local partners and restrictions on how many casinos one company can own. Online betting is likely to remain illegal for fear of fuelling addiction. Once the congress agrees on the proposed legislation, it could get the presidential sign-off this year but more likely early next.
However, Brazil’s president may try to speed up the process by first creating a gambling regulatory agency as the government scrambles to find ways to plug a budget deficit of more than 10 percent of GDP.