Roberto Brasil: "The National Congress is failing by omission. The Federal Government is also not taking a firm stance in favor of the gambling market."
In an exclusive interview with Tribuna da Imprensa Livre , Roberto Carvalho Brasil Fernandes, the lawyer for the Brazilian Association of State Lotteries (ABLE) and accredited to the Chamber of Deputies to represent the interests of state lotteries, said: “It doesn't seem to me that the issue is to revoke the rules prohibiting the operation of 'games of chance,' but rather to legalize and regulate all forms of 'games of chance,' especially those already adopted in mature markets and adopting rules identical to those of other countries where this has been happening for longer. The prohibition on those who wish to operate without complying with the legal rules must remain strict, otherwise a legal gambling market in the country will become unviable.”
Luiz Carlos Prestes Filho: Anyone who studies the Law of Criminal Offenses realizes that it is outdated. Why does it continue to support the prohibition of gambling with money administered by private entities?
Roberto Carvalho Brasil Fernandes: I understand that the law criminalizing the exploitation of gambling only affects those modalities that are not yet legalized and/or regulated in the country, or those that, although included in the portfolio of legalized activities, are exploited without the proper "authorization." Note that there are several legalized and regulated gambling games in Brazil, which are exploited by private initiative, such as the more than 14 lottery agencies authorized by CAIXA, the companies that operate lottery modalities in some states, the raffles by capitalization companies, the commercial promotions authorized by Law 5.768/71 through SECAP/ME, bets on horse races, Poker, and other modalities in which there is a bet on the outcome of a draw or competition and the respective prize. Observe that what the Penal Law criminalizes is not the "game itself," but its exploitation. The figure most strongly affected by the sanction, for criminal purposes, is the one who effectively obtains some economic benefit from the operation of the game, the entrepreneur (even though those who participate in it may also suffer sanctions). Therefore, lottery agents should also be considered among the entrepreneurs in the sector and subject to the respective legal rules. In my view, there is a significant distinction that must be taken into account between the various activities in which there is also a bet, a draw/competition, and a prize. I am referring to lottery modalities (which are not conceptually games of chance), games of chance (as defined by Brazilian law), charitable raffles, commercial promotions, bets on regulated sports competitions, and games of skill. Each has its own particularities, which cannot be confused. Understanding the concept of each of these activities ensures legal practice or attracts the application of the Law of Criminal Offenses. Having made these considerations, I agree with the point raised in the action pending before the Supreme Federal Court (RE 966177) that the prohibition of "games of chance" in Brazil does not protect any legally relevant asset and is therefore invalid. This is not only because it is incapable of effectively prohibiting it (the jogo do bicho, a modality considered the most honest in Brazil, has been practiced throughout the country for over 100 years, in conflict with article 58 of the LCP), but also because it is accepted by the majority of the population. However, the legalization of other forms of gambling is necessary and urgent, as there is a great demand. There is also the growth of online offerings from foreign websites, whose only effective way to curb exploitation in the national territory is to occupy this space and regulate it here as well. There is a need and urgency in legalizing other modalities that are in demand in Brazil, such as traditional games and typical casino modalities.
Finally, I note that the prohibition on any form of gambling that is not authorized by the competent public body, based on the law, must remain in place, since it is through compliance with the rules that gambling becomes beneficial to the society in which it is established.
Prestes Filho: Does the Brazilian legislature need to carry out a broad reform and remove obsolete laws? What would the priorities be? Would eliminating the clutter of obsolete laws contribute to the regulation of gambling?
Roberto Brasil: It doesn't seem to me that the solution is to revoke the regulations prohibiting the operation of "games of chance," but rather to legalize and regulate all forms of "games of chance," especially those already adopted in mature markets, adopting rules identical to those of other countries where this has been happening for longer. The prohibition on those who wish to operate without complying with legal rules should remain strict, otherwise a legal gambling market in the country will become unviable.
Prestes Filho: Does the Supreme Court's scheduled ruling on the Law of Criminal Offenses override the bills related to gambling that are currently being debated in the National Congress?
Roberto Brasil: The National Congress is failing by omission. The Federal Government also lacks a firm stance in favor of this market. That's why the Judiciary is being challenged, specifically the highest court, the STF (Supreme Federal Court). Perhaps a writ of mandamus would also be appropriate, considering that the exploitation of "gambling" modalities is the exercise of a right, a constitutional freedom, under Article 5, LXXI of the Federal Constitution, requiring the regulation of the activity, which in this case should be considered private in nature, a typical economic activity under Article 170, sole paragraph, of the Federal Constitution of 88 (in theory). In my view, this is not about overriding the functions of federal legislators, because that would not be possible, but about seeking judicial protection for the exercise of a purely economic activity that the public authorities have not regulated and the legislature has not defined the rules for its exploitation.
Prestes Filho: Does the approval of the bill regulating Casino Resorts create legal uncertainty for investors?
Roberto Brasil: No. Casino Resorts are ventures that, in my view, should be legalized and well-regulated in Brazil. They are investments that generate jobs and income, attract domestic and international tourists, and meet an existing demand. The various types of games offered within these establishments, which include bingo, slot machines, and table games, have an interested audience, ensuring the economic viability of these ventures. However, I advocate for the simultaneous existence of Casino Resorts and Multidisciplinary Casinos, the latter without hotels. Let me explain: the hotel network in tourist cities would benefit from a new tourist tool focused on entertainment, provided that its clients stay in the surrounding hotels, while Casino Resorts, due to the investment, can have a protected area, ensuring the level of investment, since those who go there generally stay in the Casino Resort's own facilities.
Furthermore, in my view, multidisciplinary casinos should be urban, allowing for various types of games, including bingo, which was very successful in the late 90s, and preferably developed by national groups to ensure that revenues circulate within our country.
Prestes Filho: With the regulation approved by the Supreme Federal Court, will we have to create a robust legal framework? Should this legislation be more developed and competent than the law that authorized the operation of bingo halls in the 1990s? What are your proposals?
Roberto Brasil: The Supreme Federal Court (STF) cannot regulate the market; it will only declare the validity or invalidity of the part of Decree 3.688/41 that refers to the prohibition of "games of chance." Note that criminal laws exist to protect a legally relevant good. For example: homicide is prohibited to protect life; theft is prohibited to protect property; rape is prohibited to protect sexual dignity; thus, the question arises: what legal good is being protected when the intention is to prohibit the exploitation of games of chance in Brazil? In answering this question, the STF will also declare the aforementioned norm under examination valid or not. Regarding the law that authorized bingo in the 90s, I note that it was not a law whose object was "bingo," but rather national sport. Bingo was merely a source of revenue for those purposes – sport. Should Congress legalize the private operation of bingo halls and other forms of gambling, based on this Supreme Court decision (or not – since the National Congress – Chamber of Deputies and Senate – does not depend on this decision to address this matter), it will have to deal with administrative issues related to jurisdiction, tax matters, penalties, etc., which can (and should) adopt models already existing in other countries, with rules and mechanisms that allow for a good and healthy business for the population/society, for the business entrepreneur, and for the government.
Prestes Filho: Would a National Gaming Agency, like the National Petroleum Agency, be a suitable structure?
Roberto Brasil: In my view, yes. These are entities that protect public and private interests, promote the regulation of relevant economic activities, and possess freedom that, in theory, protects them from purely partisan political interference. Along with a good law, this would greatly contribute to maintaining the health of the entertainment market, including the exploitation of all forms of gambling in Brazil.
Prestes Filho: Is Brazil, institutionally, prepared for the regulation of gambling? Does the democratic regime favor the regulation of gambling today?
Roberto Brasil: Yes, Brazil is lagging behind in this respect. Our country controls one of the most complex financial systems in the world, conducts elections electronically with great efficiency, the states are prepared and eager to welcome ventures in this sector, tourism needs these activities to boost its core activities, we have maintained millions of unemployed people for years who can, in part, be absorbed by the new market, there is intense demand, just look at the number of Brazilians who seek casinos as international travel destinations, it generates a very important tax revenue that does not burden the population at all, among other arguments.
I am not aware of any successful outcome, from a social, economic, and public health standpoint, among those countries that have chosen to prohibit gambling in various forms of games. Therefore, I answer that Brazil is prepared to legalize all forms of gambling, and the way this should happen has already been addressed in the legislation of various countries where the market is mature and healthy.
(Interview #22 of the special series ' Gambling Regulation ' coordinated by the Executive Director of the newspaper Tribuna da Imprensa Livre, Luiz Carlos Prestes Filho – Interview published this Sunday, February 28th)
