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Brazilian Gambling Update

 

1) Brazilian Political Situation
Currently, Brazil is experiencing a big clean up with regards to its politicians, as the famous lawsuit "Car Wash", among others, are already sending powerful politicians to jail and opening criminal lawsuit against many others. So, with this in mind, all eyes of the Brazilian people and media are focused on this matter. Former president Lula is facing a lawsuit in which he is facing possible jail time, which is part of "Car Wash". Aside from these, other politicians are trying to approve a bill about authority abuse, which would limit the powers from judges and public prosecutors. This bill was proposed by a group of senators, however, the society is against the approval which worries the mentioned politicians. Also, the Brazilian Congress is busy with two subject that are to be voted in order to put the Brazilian finance in order, which are, the Retirement/Pension Reform Bill and the Labor Reform Bill. After the approval of the Retirement/Pension Reform Bill and the Labor Reform Bill the Gambling bills should go ahead on their processing.

2) LOTEX – Instant Lotteries
The privatization of the Brazilian instant lottery (LOTEX) had a good development in 2016 and in the first quarter of 2017. It was included in the "Programa Nacional de Desestatização" (Brazilian Privatization Program) (Federal Decree nº 8.648). Currently, the federal government considers the privatization of Lotex to be essential for the increase of the efficiency of instant lotteries in Brazil, what may lead to a raise of revenues. With the approval of law 13.262/2016, a Caixa Econômica Federal (Public Bank) subsidiary was created to manage LOTEX. Now, the will of the government is to sell 49% of the shares of this subsidiary for a private operator, which will be responsible for the co-operation of LOTEX with the Government. LOTEX operations will include Printed Scratch Cards, Pull Tables, Terminals, Online, Mobile, and other instant lotteries models. Then, the privatization of LOTEX is expected by the Government to be concluded until the end of 2017, with the publication of the invitation for bids for private parties in the beginning of the second semester. The BNDES (Bank for the National Development) will be responsible for the conduction and oversight of the bidding process, which will be an auction.

3) Sports Betting
A new Bill, exclusive for Sports Betting, may be presented for the Congress by the Federal Government. This new bill would be independent from the other gambling bills. The operation of this Sports Betting method is likely to be done like LOTEX - Instant Lotteries. A Caixa Econômica Federal (Public Bank) subsidiary would be created and 49% of it would be sold to one or a few private operators, which will be responsible for the activity, alongside with the government. It is possible to expect a multi-license format, what would include from 5 to 10 private operators, but it is not certain yet.

4) Casinos by Ministry of Tourism
According to the Minister of Tourism, Marx Beltrão, it is possible to expect a new project for the implementation of large sized Casinos in specific areas of the Brazilian territory. This would be a part of a package of measures that aim to boost the Brazilian Tourism segment, for the raise of revenue. With this, ABRATUR (Brazilian Agency of Tourism) would be created, an agency responsible for the oversight and promotion of Tourism. It is not something certain, but it is a new possibility.

5) Sheldon Adelson's Visit to Brazil
Earlier this week, Sheldon Adelson made a visit to Brazil and had conversations with very important political figures. He intends to make a big investment in Brazil, however, only if he receives a positive communication from the Government saying that the activity will be serious, without bribes or any kind of activity that would compromise Sands' Group ethical beliefs. The investments he's willing to make are to be made in the cities of São Paulo, Rio de Janeiro and a thirds city that he has proffered not to mention, however, we have reasons to believe that it is the City of Balneário Camboriú in Santa Catarina. His plan for São Paulo is to build an entertainment center with a sports arena for 2,500 people, along with a mall and a casino. In Rio, he also wishes to build a big project with an integrated leisure complex at the Maravilha Port. He had meetings with congressmen, with the Minister of Tourism, with the President of the Chamber of Representatives Rodrigo Maia and with the Brazilian President Michel Temer.

6) Gambling Bills
As for the gambling bills, PLS 186/2014 and PL 442/1991, the situation of them has not changed since our previous update. PLS 186/2014 expects discussions at the Constitution Commission of the Senate and PL 442/1991 is expected to be included in the Chamber of Representative's Agenda for voting, after the Retirement/Pension Reform Bill and the Labor Reform Bill vote, once the Congress is more calm after these items are pushed and solved.

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