Reading the extensive report on Brazil, further down the page, I feel it appropriate to mention Noble laureate TS Eliot’s “April is the cruellest month of the year” (The Wasteland), because as the analogy of work, where flowers breed in springtime only for them to perish come winter, in Brazil we are filled with hope about gambling legislation approval, only to be sorely disappointed.
Nonetheless, Edgar Lenzi, Brazilian gaming expert, does anticipate gaming legislation approval, as hoped for by the entire gaming industry, during southern hemisphere springtime. The Brazil report is the only item in this month’s column as we head with trepidation towards a period that is of vast importance to the gaming industry on this existing and huge market.
We visited Lima in mid-March and met with leaders of the local gaming sector, on the most important matter of online gaming legislation, and what I can report to you is that I have it on good authority that, with a little luck, such legislation should be approved around the end of the second quarter. We hope to bring you a full report on these findings in C.I. Americano’s May/June edition.
Meanwhile, in Latin America, the expo circus begins with FADJA 2017 on April 26-27 at Chamorro Entertainment City Hall, in North Bogota, and not far from Chia, where we can find the one and only, the original, Andres Carne de Res. See you all there!
BRAZIL – Mixed news on proposed gaming legislation
A former UK Prime Minister once said that a week was a long time in politics, as changes overtook planning like a humming bird’s flight that left the sensation of space in one’s mind. Wish that this was the same in Brazilian politics, as weeks go by with the slow movement of a plodding duck. Certainly, no flamingos in Brazilian politics.
However, when there is easy money to be made by politicians, some of them move with feline expediency or should we say, a rat’s cunning, as Lava Jato* casts its ugly shadow in everything from Brasilia to Panama.
On the matter of the current gaming Bills, Edgar Lenzi, president of industry experts BetConsult from Sao Paolo, says that PL 442/1991 – Chamber of Representatives’ Bill’s next step still waits to be voted by the Chamber of Representatives Plenary.
Lenzi, adds: “There has been an urgency submission for the vote of the bill, however, there hasn’t been any development on this matter. During the Leading Congressmen meeting earlier this week, Federal Deputy Silvio Costa has requested the inclusion of PL 442/1991 for voting on the Chamber’s Agenda. However, there was no consensus on this subject, given the current political environment involving Brazilian politicians, and as per our contacts it will go ahead in the first half of April.”
On the matter of the Senate Bill, PLS 186/2014, this is also expected to be voted by the plenary of the Senate, however, last December, the Senate sent this bill for further discussions by the Constitutional Commission of the Senate before it can be taken to vote by the plenary.
The President of the Senate‘s Constitutional Commission, Senator Edison Lobão, has just assigned Senator Benedito de Lira to be the reader of the PLS 186/2014 at the Constitutional Commission. Lenzi adds that: “This can be a good thing, since Benedito de Lira is known to be a defender of the legalization of gambling in Brazil especially as a new way to raise funds for the Government.”
Sports Betting legislation
As gaming legalization will be most important for gambling segments like Casinos, Bingo Halls, Online Gaming, etc., Sports Betting will play a more important role in this situation.
Late in 2016, President Michel Temer signed a Provisional Measure for the legalization of Sports betting, but this has lost force during the past months because the possibility of a new Bill for the legalization of Sports Betting has gained force. It seems that the Ministry of Finance has sent a Sports Betting Bill to the President’s Office and now the President may present this new Bill to Congress.
Reports from the Finance Ministry also say that the operation of Sports Betting is likely to be like LOTEX – Instant Lotteries, with the creation of a Caixa Econômica Federal (Public Bank) subsidiary to sell 49% equity to one private operator, which will be responsible for the activity, alongside with the government. However, contrasting reports also say that multi-licencing operation for Sports Betting is still on the agenda.
Supreme Court Lawsuits and constitutional challenges
This is where current gaming legislation proposals get sucked in by the Lava Jato corruption scandal that grips Brazil and with an octopus’s reach has inked the political panorama in Latin America also. It is almost ten years since the initial money laundering accusation against Petrobras was reported in 2008 with an attempt to launder money through local business, Dunel Indústria e Comércio. Since then, 9 major Brazilian construction firms have been caught in the corruption net, including the now infamous Oderbrecht.
As major political figures and multimillionaire businessmen have been indicted on the Lava Jato scandal, and justice seems to be following its course, the Brazilian Attorney General has sent a list of congressmen’s names requesting an investigation to the Supreme Court on the Lava Jato scandal, which includes federal representatives, senators and governors from all main political parties, as well as former Presidents.
In the past few months, some bingos opened for business in Porto Alegre, following a constitutional challenge to the 1941 Act that defined gaming exploitation as a crime, instead of a misdemeanour, and incompatible thereby with Brazil’s 1988 Constitution.
Edgar Lenzi says: “There is a lot of optimism with regards to a lawsuit that is being processed by the STF – Brazilian Supreme Court. It is possible that the Supreme Court may decide that the prohibition of gambling is unconstitutional, so there is also this possibility. A positive finding by the Supreme Court may force the Executive to push the gaming bills forward even faster than expected.”
Report from Brasilia
Lenzi says that after several meetings in Brasilia, the seat of the legislative powers in Brazil, last week with Caixa representatives, political figures and an informal meeting with the directors of IJL (Jogo Legal Institute), “the outcome was very optimistic, with regards to both bills, especially as the reader for the 186/2014 bill at the Constitutional Commission, Benedito de Lara, is a strong supporter of legalized gambling in Brazil.”
On the matter of Sports Betting, it was mentioned that there is a good possibility for a multi-license method of concession for Sports Betting operators, with the number of possible operators between 5 and 10 instead of just one. The IJL directors were also happy with de Lara and were very cheerful regarding the development and overall processing of the bills.
Edgar Lenzi concludes: “We believe that the legalization process can be expected to be finished, by either bill, at the end of the second quarter or during the third quarter of 2017. On the other hand, the regulation by the authorities can be expected for the following 6-8 months.
“Since there are three good ways and possibilities for gambling legalization or unconstitutional recognition, it is possible to be optimistic about the near future – Senate Bill, Chamber of Representatives Bill and Supreme Court Lawsuit, as well as the Sports Betting proposition from the President.”
*Lava Jato, was initially a money laundering investigation, involving close to US$9 billion, quickly expanded to cover allegations of corruption at the state-controlled oil company Petrobras, where executives accepted bribes in return for awarding contracts to top construction firms at inflated prices.
Corruption by Brazilian and Latin American political leaders has involved many, from the treasurer of the Workers’ Party, João Vaccari Neto, the former chief of staff for President Lula, José Dirceu, former Speaker of the Chamber of Representatives Congress, Eduardo Cunha (PMDB-RJ), former minister of mines and energy, Edison Lobão, former president and current Senator Fernando Collor de Mello, up to former president Lula, and later, president Dilma Durceu, who was impeached last year and removed from office.
In Latin America, Ramón Fonseca Mora, president of Panama’s Panameñista Party, was dismissed in March 2016 due to his involvement in Lava Jato, and there is a process against former Peruvian president Alejandro Toledo, who is now a fugitive after construction company Oderbrecht, involved in the Lava Jato scandal, paid US$20 Million to proxies. Also former Peruvian president Ollanta Humala has been implicated by Odebrecht for public works contracts, as have other major politicians in the region.