By establishing regulatory framework for gaming, Brazil will add $20 billion a year in tax revenue

By establishing regulatory framework for gaming, Brazil will add $20 billion a year in tax revenue image

This is almost twice the R$ 12.1 billion from officially sanctioned gambling, if the R$ 11.4 billion from CEF (Caixa Economica Federal) lotteries is added to R$ 400 million in state-run lotteries and the R$ 300 million from horse racing.

The Brazilian Government will be the main beneficiary if the gaming industry is legalised in Brazil, said Fabio Ferreira Kujawski, an attorney and partner at Mattos Filho, Veiga Filho, Marrey Jr. e Quiroga Advogados. “Changing the regulatory paradigm of gaming could be an important vector for economic and social development. According to studies by organisations linked to the industry, Brazil could raise additional revenues of about R$20 billion annually through regulation of this segment. On a world scale, gaming revenues were US$400 billion in 2014, and Brazil had only 1% share of these revenues through the lotteries administered by the CEF (Caixa Econômica Federal)".

The position of Kujawski, who has a master's degree in International Economic Relations from the Pontifical Catholic University of São Paulo (PUC-SP), has been confirmed by studies such as the one conducted by the BNL (Brasil National Lottery Newsletter). According to the survey, illegal betting annually totals more than R$ 18.9 billion with the weekly jogo do bicho bringing in R$ 12 bn, bingo bringing in (R$ 1.3 bn), slot machines bringing in (R$ 3.6 bn) and sports betting, - gaming and online poker bringing in (R$ 2 bn). The amount is almost double the R$ 12.1 billion from official gambling, if the R$ 11.4 billion from CEF lotteries, R$ 400 million from state lotteries and R$ 300 million from horse racing are added to the total.

There are currently two bills, before the Congress: one in the Chamber of Deputies (PL 442/91) and one in the Senate (PLS 186/2014), that aim to create a regulatory framework for the sector. Fabio Ferreira Kujawski stresses the advances contained in PL 442/1991: "In addition to reflecting the concerns about ensuring a competitive market for operators, the project also has provisions to guarantee the stability in the licenses granted for operation of games and controls on the number of players in the casinos," he points out.

Another relevant point, he explains, is the compulsory use of the CMS (Control management system) for tracking and payment in each one of the gaming modes, creating a mechanism for preventing illicit practices such as money laundering and outflows of foreign exchange. "The consequence of legalization is the formalization of a number of activities that are carried out clandestinely, as is the case with the jogo do bicho. The approval of the project also contributes to employment and income through the development of new jobs and strengthening of regional development policy through the development of the tourism industry," he adds.

Attorney Fabio Ferreira Kujawski is one of the invited speakers that will be attending the Brazilian Gaming Congress (BgC), an event organised by Clarion Events that will take place on November 20 to 22 in the Tivoli Mofarrej in São Paulo (SP). With the theme "Magnifying your vision", the Congress will bring together leading experts and players in the gaming industry to discuss essential issues facing the sector.

He will participate in the panel discussion "Regulation, Licensing and Taxation – strategies for entry into new markets based on licensing options", which will address issues such as the requirements for a regulatory agency for gambling and games in Brazil, and the duration of the licence required to make the gaming business viable for investors and operators. Also participating in the discussion, are: Pablo Espuela, Manager of International Business Development of Luckia and Ed Bowers, Senior Global Vice President of Game Development at MGM Resorts International.

About Brazilian Gaming Congress

Organized by Clarion Events, the 4th edition of the Brazilian Gaming Congress (BgC) will take place from June 26 to 28 at the Tivoli Mofarrej in São Paulo (SP). With the theme "Broadening your game", the meeting will bring together leading experts and players in the gaming segment to discuss key issues in the gaming industry to discuss the key issues for the sector which is in the process of developing a regulatory framework in the country.

Tightly focused on business, BgC will provide participants with critical information about the commercial characteristics of each gaming area (bingo, casino, online gaming and lotteries) and the product specifications for the industry, thus preparing all industry players to join a future regulated market.

Clarion Events

For over 65 years, Clarion Events has been dedicated to the promotion and organization of trade shows, events and conferences. Clarion brings together about 700,000 people and 12,000 exhibitors and sponsors in more than 250 events held around the world. Clarion Events has a global presence - operating with 12 offices in 9 different countries around the world. It has been in Brazil since 2008.