Senate Bill No. 22 of 2005, authored by Senator Gilberto Miranda

The National Congress decrees:
Article 1. Bingo games are permitted throughout the national territory for the purpose of raising funds to promote sports and finance social security, in accordance with this law.
Article 2. The operation of bingo games is subject to the general principles of economic activity and shall be carried out by legally constituted private entities with exclusively national capital, observing a minimum capital of three hundred thousand reais, fully paid up, in accordance with this law and its respective regulations.
Article 3. Bingo, as a type of prediction contest, is the random drawing of numbers through successive extractions, carried out until one or more participants achieve the previously determined objective of number combinations.
Single paragraph. The bingo game may be operated in the modalities of permanent bingo game and electronic bingo game.
Article 4. Permanent bingo game is the random drawing of numbers from one to ninety, through successive extractions carried out in a process free of human contact, until one or more participants reach combinations of numbers previously determined on a printed card.
§ 1. Permanent bingo games may only be operated in the establishments of companies authorized under this law, in dedicated and exclusive rooms for the event, with a capacity to accommodate at least two hundred seated participants.
§ 2. Seventy percent of the amount collected from the sale of tickets will be returned to the participants in the form of prizes.
§ 3º Of the total amount allocated to prizes, ninety-two percent will be allocated to line and bingo (full card) prizes per draw round, and eight percent to the accumulated prize and to the reserve of the accumulated prize.
§ 4. Establishments operating permanent bingo games must maintain a minimum staff of fifty employees.
Article 5. Electronic bingo game is a random draw carried out using an individual electronic video terminal, prepared to display a simulation of the bingo game, presenting random combinations of numbers, activated directly by the participant in successive individual bets, with prizes awarded when the objective of previously determined and announced combinations is reached on the equipment.
§ 1 The electronic bingo game may only be operated in the establishments of companies authorized to operate permanent bingo games, in separate areas away from the rooms designated for permanent bingo games.
§ 2. The operation of exclusively electronic bingo establishments is prohibited.
§ 3 The individual electronic terminals referred to in caput They must be programmed in such a way as to guarantee participants a random return of the amount wagered, either directly or in the form of accumulated value, in a percentage never less than eighty percent, in a cycle of one million and two hundred thousand bets.
§ 4 The number of individual electronic terminals installed in the establishment may not exceed two-thirds of the number of chairs intended for participants in the permanent bingo game.
§ 5 Without prejudice to the provisions of § 4 of article 4 of this law, establishments in which electronic bingo games are operated must maintain employees in a number greater than one third of the number of individual electronic video terminals installed.
§ 6. Individual electronic terminals must be leased from companies distinct from the owners of the permanent bingo establishment, specialized in the operation, leasing, and rental of individual electronic video terminals, specifically constituted for this purpose, with a minimum share capital of two million reais, fully paid up, and with a proven minimum availability of two thousand individual electronic video terminals, related by invoice number and serial number, at the time of granting the operating authorization issued by the Ministry of Sports.
Article 6. The sale of bingo cards for permanent bingo games and the installation of individual electronic bingo terminals outside the specific premises of establishments belonging to companies authorized to operate bingo games are prohibited.
Article 7. Participants must be identified upon entering the premises of companies authorized to operate bingo games.
Article 8. Entry into bingo halls is prohibited for minors under eighteen years of age.
Article 9. The Ministry of Sports is the body responsible for authorizing, systematizing, monitoring, and supervising the operation of bingo games.
Sole paragraph. The Ministry of Sports may enter into agreements with entities of the direct or indirect public administration for the supervision and control of the activity.
Article 10. An inspection fee will be charged due to the police power exercised by the Ministry of Sports or the entity to which it delegates competence to oversee the activities of bingo gambling.
§ 1 The inspection fee shall be due monthly by the establishment authorized to operate bingo games, starting from the date of issuance of its operating permit, and must be paid by the fifteenth day of the month following the month in which it is due.
§ 2 The inspection fee will be twenty thousand reais per establishment where bingo games are operated.
Article 11. The following resources derived from the operation of bingo games will be allocated to the Ministry of Sports for the promotion of sports:
I – a monthly fee of fifteen thousand reais, per permanent bingo hall with a capacity of up to three hundred participants, and thirty thousand reais, per hall with a capacity of more than three hundred participants;
II – the monthly amount of two hundred reais, per individual electronic terminal installed.
Article 12. For the financing of social security, the Social Contribution on Bingo Games (CSJB) is hereby established, levied on the monthly revenue of companies that operate bingo games.
§ 1 The taxpayer of the Social Contribution on Bingo Games is the establishment authorized to operate the economic activity of bingo games.
§ 2 For the purposes of the incidence of the Social Contribution on Bingo Games and other social contributions levied on turnover, PIS and Cofins, the monthly turnover of the company that operates the bingo game is considered to be the difference between the value obtained from the sale of bingo tickets and bets on individual electronic terminals and the total prizes actually offered or distributed, including the values ​​of accumulated prizes and accumulated reserve prizes.
§ 3 The rate of the Social Contribution on Bingo Games is two percent.
§ 4 The period for calculating the Social Contribution on Bingo Games is monthly.
§ 5 The Social Contribution on Bingo Games must be paid by the fifteenth day of the month following the month in which it is due.
Article 13. The participating bettor will be responsible for paying the personal income tax due corresponding to the receipt of prizes, in the capacity of a tax substitute.
§ 1 The personal income tax will be levied, at a rate of one and a half percent, on the value of sales of permanent bingo cards and bets originating from individual electronic terminals, on a definitive and exclusive basis at source.
§ 2. Bets originating from individual electronic video terminals correspond to the value entered by the bettor at each terminal, in legal tender, tokens, or any form of credit transfer, and the bet on credits earned by the bettor does not constitute a basis for calculating personal income tax withheld at source.
§ 3 The collection of the tax referred to in this article shall be made monthly, by means of the delivery of the amounts withheld by the companies operating bingo games until the fifteenth working day of the month following the month in which the tax is levied.
§ 4 The winning participant will not be subject to income tax on the prize, due to the tax substitution established in caput of this article.
Article 14. The Federal Revenue Secretariat is responsible for administering the Social Contribution on Bingo Games, including inspection and collection activities.
Sole paragraph. The provisions of income tax legislation relating to administration, consultation, penalties, guarantees and administrative procedure shall apply to the Social Contribution on Bingo Games, where applicable.
Article 15. The Ministry of Sports and the Federal Revenue Service, within the scope of their respective responsibilities, will issue instructions to enable the implementation of the provisions of this law.
Article 16. The Sports Promotion Fund is hereby established, financed, among other resources, by the revenue referred to in Article 11 of this law, the rules of which will be established by decree of the Executive Branch.
Article 17. Existing bingo establishments, provided they are up to date with their tax and fiscal obligations, are provisionally authorized to operate for a period of one hundred and twenty days.
Article 18. This law enters into force on the date of its publication.
Justification
This bill aims to put an end to a situation of legal uncertainty that exists in the country.
Article 26 of Provisional Measure No. 2.049-24, of October 26, 2000, due to its truncated wording, appears to establish a prohibition on the operation of establishments exploiting bingo games. However, despite the normative interpretation of prohibition, many specialized companies in this entertainment sector continue to operate, by virtue of court decisions.
judicial authorizations.
Bingo is a traditional game in Brazil. Initially played within families, clubs, or churches and linked to specific events, it became, as a result of Laws No. 8.672 of 1993 and 9.615, from 1998 – respectively named Zico Law and Pelé Law, in honor of the Ministers of Sports who sponsored them – to be implemented nationally with the purpose, among others, of financing sports.
In reality, there was a mobilization of capital and labor to offer the public, mainly the elderly and retired, this recreational form of entertainment, which does not involve the possibility of employing large sums of money. Therefore, the detrimental characteristic that for more than half a century prohibited the existence of casinos in the national territory is absent.
There is undeniably a playful element in our culture. Aiming to guide and regulate the multiple variations of this national playful vocation, already ingrained in our leisure customs, and considering the entertainment market already established by companies, workforce, and audiences familiar with the technological creation of electronic equipment, programs, and installations, this project is presented, described in its main outlines below.
The drafting technique used was to include in the project text the main points relating to the regulation of this game: necessary requirements for companies that operate it; its modalities; physical characteristics and facilities of the establishments; mandatory identification of participants; definition of the body responsible for the systematization, inspection and supervision of the game; specific tax regime, where applicable, for the activity; destination of tax revenue from the activity; and competence of the intervening governmental bodies.
It can be seen, therefore, that the text of the proposed project is concise when dealing with key matters, leaving the issues related to its feasibility and implementation to the regulations.
A key aspect of the project is the allocation of resources to promote sports and finance social security. In this regard, the Ministry of Sports is the managing body for the entire structure.
However, to avoid creating a bureaucratic monstrosity that consumes resources in setting up a national structure, the possibility of delegating functions through agreements with states, municipalities, and other public administration bodies for the supervision and control of the activity is foreseen (Article 9). This competence does not interfere with that inherent to the Federal Revenue Secretariat in the areas of income tax, social security contributions, social contribution on net profit, and social integration program. A new contribution, the Social Contribution on Bingo Games (CSJB), was foreseen in the project, a new tax proposed to finance social security.
The legal framework for operating bingo games is typical of economic activities, with one restriction: companies operating them must have exclusively national capital. This is intended to prevent control by foreign companies. The minimum capital to be paid in is three hundred thousand reais. This limit is based on the experience that the minimum resources for facilities, machinery, and furniture to set up an establishment are currently at this basic level. Hence the need for full payment of the capital, to prevent opportunists from attempting to develop the activity (Article 2).
The bingo game, as defined in article 3, may be operated in two forms: permanent bingo game and electronic bingo game.
The permanent bingo game is defined in caput from article 4 and detailed in its paragraphs. The universal definition is used.
At least seventy percent of the proceeds from the sale of the tickets are reserved for prizes. Of this amount, ninety-two percent will be allocated to line and bingo prizes (full card) and eight percent to the accumulated prize.
Electronic bingo, played via individual electronic video terminals, is described in Article 5. To guarantee the participant's rights, paragraph 1 stipulates the random return of the wagered amount, in a percentage never less than eighty percent, in an operating cycle of a maximum of one million and two hundred thousand bets.
To prevent the misuse and proliferation of these individual electronic video terminals, the number of devices to be used in the establishment is limited to two-thirds of the number of seats in the permanent bingo hall (art. 5, § 4).
Paragraph 6 establishes requirements regarding the capital of companies that manufacture individual electronic terminals. The minimum capital of the company must be two million reais, and the minimum availability of machines must be one thousand units at the time the operating authorization is granted by the Ministry of Sports.
The bill prohibits the sale of bingo cards for permanent bingo games, as well as the installation of individual electronic video terminals, outside of the premises of authorized companies.
Many people mistakenly believe that bingo is a way to conceal illicit gains and launder illegally obtained funds.
With the aim of preventing these illicit purposes, the bill provides for the need to identify participants, both in permanent games and in electronic games (Article 7). Furthermore, the bill prohibits the entry of minors under eighteen years of age into the premises of gaming halls.

In other words, minors are not allowed to play or watch the game in progress.

The competence of the Ministry of Sports to control bingo games has already been mentioned. It is granted the power to enter into agreements with state or Federal District agencies to exercise this function (Article 9).
The exercise of police power will be compensated by a corresponding fee, which will constitute revenue for the entity exercising this function (art. 10).
The rules governing this fee are set out in the paragraphs of Article 10. The taxable event and its frequency are stipulated in paragraph 1, and the amount in paragraph 2.
The systems for allocating resources foreseen in the Pelé and Zico Laws were quite fragmented by entity. Resources were limited, and therefore their use was ineffective. This project advocates concentrating resources in the Ministry of Sports, thus providing it with a significant source of income for promoting sports. The objective is to generate revenue for the national body responsible for overseeing national sports and to improve its performance in light of the specific policies established for the sector.

It is necessary to give a noble and specific purpose to the tax revenue derived from this game. Consequently, based on the competence attributed to the Union by article 195, item III, of the Constitution, the Social Contribution on Bingo Games (CSJB) is created, levied on the monthly revenue of companies that operate in this activity (article 12, caput ).

The taxpayer is the establishment authorized to operate the economic activity of bingo games (§ 1 of article 12).
Paragraph 2 of this article defines the basis for calculating this contribution, which will be the monthly revenue of the company authorized to operate bingo games. To unify the calculation bases for PIS and Cofins (which also apply to revenue) and CSJB, for all these taxes, the taxpayer's monthly revenue is defined as the difference between the value obtained from bingo sales and bets placed on individual electronic terminals and the total prize money actually distributed, including accumulated prize money and accumulated prize reserves.
The CSJB tax rate will be 2%, and its calculation period will be monthly. Payment of the tax will be due by the fifteenth day of the month following the month in which it is due (Article 12, § 5). The administration of the CSJB is the responsibility of the Federal Revenue Service (Article 14), and the provisions of income tax legislation relating to administration, consultation, penalties, guarantees, and tax proceedings will apply to this contribution, where applicable.
It is difficult to determine the individual winnings of each participant throughout a bingo game, as several sequential bets are made and, after a few hours, there may be residual winnings or even losses; that is to say, the participant loses all their resources.
used.
To overcome this peculiarity of the bingo game, which is difficult to implement, the project adopts tax substitution (art. 13). In this way, every participant is designated as a tax substitute and must contribute one and a half percent on the value of the bingo card purchases they make or on bets originating from an individual electronic terminal. This tax is levied definitively and exclusively at the source, in accordance with § 1 of art. 13.
Paragraph 2 establishes the basis for calculating income tax levied on bets placed on individual electronic video terminals.
This tax will be collected monthly by the tax-responsible parties – the companies operating the bingo game – until the fifteenth business day of the month following the month in which it is levied.
Finally, paragraph 4 of the same article 13 establishes that there is no tax on any eventual bonus, in view of the tax substitution provided for in the main clause.
In conclusion, the operation of bingo games should be encouraged, not only because it provides leisure for those who participate, but also because it is an economic activity that generates employment and income.
Furthermore, the approval of the project will result in the generation of resources not only for the promotion of sports but also for the financing of social security.
Given the social importance of the project, we count on the support of our esteemed colleagues for its approval.
Meeting Room, February 22, 2005.
Gilberto Miranda.
(To the Committees on Constitution, Justice and Citizenship, Social Affairs and Economic Affairs, with the latter having the final decision.)