A Brazilian congressional committee has given the green light for the government to start to regulate sports betting and online gambling over the next couple of years.

The lottery reform bill has been a long time coming. There had been concerns that the appointment of a new president could put a spanner in the works, but this does not seem to be the case.

The issue of legalizing sports betting will now be put to Congress as part of an urgent measure that the government had proposed back in August.

The aim of this measure was to allocate the lottery game revenues in a different way, mainly for the funding of sports, cultural and public security programs.

Proposals in the bill

Discussions on opening up gambling laws began as far back as 2014, following the introduction of a Senate bill that proposed legalizing land-based casinos, as well as creating a base of regulations for an online gambling scene. Casinos have been banned in Brazil since 1946.

While the Justice and Constitution Commission rejected this bill in March, it could still go through if the Senate plenary decides to support it.

A separate bill is also being put forward by opposition parties that would see land-based casinos becoming legal. Online gambling would remain forbidden.

Brazil’s population is around 200m and about 198m smartphones are in circulation. If the market were to be opened up, particularly online gambling, there would be a lucrative mobile gambling opportunity. At the moment, the only forms of legal gambling are the lottery, land-based poker tournaments and horse racing.

There is major interest from global casino groups in relation to casino developments if the bill passes. Las Vegas Sands, for example, would be interested in investing as much as $8bn in a casino that would be located in Rio de Janeiro.

Brazil is still a predominantly Catholic country and many people are against gambling as a result.

Many believe that the new president, Jair Bolsonaro, may decide to allow the 26 states in the country to decide for themselves whether or not to legalize newer forms of gambling in their jurisdictions, rather than do so on a national level.

Politics playing a role

The issue of the presidential election needed to be considered before any major gambling expansion took place. It has been a turbulent period for politics in Brazil. The previous president, Dilma Rousseff of the Workers’ Party, was impeached.

Bolsonaro won the election easily, defeating the Workers’ Party’s candidate, Fernando Haddad, by securing 55.2% of the vote compared to 44.8% for his opponent.

He appears to be on the far right of the political spectrum. He is a controversial figure, and many have likened his incendiary approach to that of President Trump in the United States.

The election campaign was very divisive, with both sides arguing that the election of their opponent would lead to disastrous consequences for Brazil.

Brazil has been plagued with economic problems of late, so many are hoping that the new president can help turn the country’s fortunes around. Early indications are that Bolsonaro wants a reduction in state intervention in a number of sectors.

The country is short of cash and needs to drum up new ways of garnering revenue. This is why gambling is being considered as a potential solution. Some industry commentators have likened the potential of an opened-up Brazilian gambling market as a “sleeping giant”.

During his campaign, Bolsonaro expressed his disdain for gambling on a personal level, but it is not yet known whether this would affect the chances of the proposed bills being passed. Brazil needs to improve its economy somehow and gambling would be an instant and lucrative way of doing so.

It will certainly be an interesting situation to watch going forward and see what approach Bolsonaro may take.