Senate Bill No. 00322, dated November 10, 2004, authored by Senator Sérgio Zambiasi
Senate Bill No. 00322 , of 2004 – ( 10.11.2004)
Amends Law No. 6.717, of November 12, 1979, to include the mandatory identification of the bettor in number lotteries administered by Caixa Econômica Federal.
The National Congress decrees:
Article 1. Article 3 of Law No. 6.717, of November 12, 1979, shall now include the following sole paragraph:
"Article 3 ………………………………………………………………………….
Sole paragraph . The regulatory act referred to in the heading must include the mandatory identification of the bettor, at the time of the bet, by means of the Individual Taxpayer Registry number (CPF). (NR)"
Article 2. Within three hundred and sixty days from the effective date of this Law, all bets on prediction contests regarding the outcome of number draws must be identified in accordance with the provisions of the sole paragraph of Article 3 of Law No. 6.717, of November 12, 1979, as amended by Article 1 of this Law.
Article 3. This Law shall enter into force on the date of its publication.
Justification
Law No. 6.717, of November 12, 1979, authorized Caixa Econômica Federal (Caixa) to conduct, as a modality of the Federal Lottery governed by Decree-Law No. 204, of February 27, 1967, prediction contests on the outcome of number draws, the so-called number lotteriesBased on this law, several lotteries were created, including Mega Sena, Quina, Loteca, Lotogol, Lotomania, Dupla Sena, and Lotofácil.
Article 3 of this Law delegated to the Minister of Finance the authority to regulate the matter, setting the unit values of bets and prizes, as well as the limit on expenses for the costs and maintenance of services, but did not establish the mandatory identification of the bettor at the time of the bet, as a means of preventing these lotteries from being used by organized crime for money laundering. Without this mandatory requirement, the result is that this provision is absent from all subsequent regulations.
This loophole in the legislation has allowed the laundering of money from "off-the-books" corporate accounts or illicit activities, in a scheme where the real winner is approached by the lottery owner or one of their members who proposes buying the ticket for a higher price than the prize, thus transforming the... dirty money em clean money.
There is strong evidence to that effect. The Caixa Econômica Federal itself, through its anti-money laundering department, selected the fifty most suspicious cases since 2002 and forwarded them to the Council for the Control of Financial Activities (COAF) of the Ministry of Finance.
Last June, the Federal Police, based on information from COAF (Council for Financial Activities Control), opened approximately 20 police investigations in São Paulo alone to investigate suspicious winners.
The Folha de São Paulo newspaper, on September 12, 2004, revealed that a group of 200 people won 9.095 times in Caixa's lottery games between March 1996 and February 2002, while 98,6% of the total of 168.172 people who won prizes at some point during that period, throughout the country and in all forms of the game, only won up to four times.
Among the curious cases, Folha cites a São Paulo businessman, Amauri Gouveia, who correctly guessed 96 Quina lottery numbers, 33 Mega-Sena numbers, 25 Federal Lottery numbers, 9 sports lottery numbers, and 8 scratch-off lottery numbers. The frequency of his wins in Quina is impressive. Between draws 501 and 529, he only failed to win in two. Even more impressive is the fact that his two brothers are among the six biggest winners, with 332 and 297 prizes respectively.
Thus, it seems evident that Caixa's lotteries are, in fact, being used for money laundering, and that the scheme can be dismantled with the simple identification of the bettor through their CPF (Brazilian taxpayer ID). This has also been the understanding of federal prosecutors and investigators from the Federal Police. The solution has already been the subject of a Public Civil Action filed by the Federal Public Prosecutor's Office in Sorocaba (SP).
Although Caixa Econômica Federal has previously stated its opposition to identifying bettors, arguing that the measure is incompatible and unsuitable for the lottery system. Online Furthermore, due to the potential harm to sales, our understanding is that, at the current technological stage, the technical solution exists and only requires a period for adaptation, as proposed in Article 2 of the project (360 days). Regarding sales, we do not believe that the impact will be significant enough to make it unfeasible.
In this context, we present this draft bill, for which we count on the approval of our esteemed colleagues.
Session Room, November 10, 2004
Senator Sergio Zambiasi
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Legislation cited
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LAW No. 6.717, OF NOVEMBER 12, 1979
Authorizes a type of prediction contest for the Federal Lottery governed by Decree-Law No. 204, of February 27, 1967, and provides other measures.
THE PRESIDENT OF THE REPUBLIC, I hereby announce that the National Congress decrees and I sanction the following Law:
Article 1. The Caixa Econômica Federal is authorized to conduct, as a modality of the Federal Lottery governed by Decree-Law No. 204 of February 27, 1967, a contest of predictions on the result of number draws, held on pre-set dates, with distribution of prizes through a proportional distribution.
Article 2. The net result of the prediction contest, referred to in the previous article, obtained after deducting from the total value of the bets computed, the expenses for the operation and maintenance of the service, the value of the prizes, and the social security contribution of 5% (five percent), levied on the gross revenue of each draw, shall be allocated to the applications provided for in item II of article 3 of Law No. 6.168, of December 09, 1974, with priority given to programs and projects of interest to the less developed regions of the country.
Article 3. The prediction contest referred to in this Law shall be regulated by an act of the Minister of State for Finance, which shall mandatorily provide for the holding of the contest, the setting of prizes, the unit value of bets, as well as the limit on expenses for the cost and maintenance of the service.
Article 4. Item I of Article 2 of Law No. 6.168, of December 09, 1974, shall now read as follows:
"I – The net income from the Federal Lottery, in any of its forms, and from the Federal Sports Lottery."
Article 5. This Law shall enter into force on the date of its publication, repealing any provisions to the contrary.
Brasilia, November 12, 1979; 158th year of Independence and 91st year of the Republic.
JOHN FIGUEIREDO
Karlos Rishbieter
