Supreme Court may decriminalize gambling in Brazil.

Amidst plea bargains, wiretaps, and crises of all kinds, a new development is quietly unfolding at the Supreme Federal Court. This Thursday (June 1st), the court may rule, with general repercussions, on whether the criminalization of gambling is compatible with the Constitution. In other words, the dice could start rolling freely, depending on the ministers' understanding.

The case arrived at the Supreme Court from Rio Grande do Sul. From reading the proceedings, the conclusion is that Porto Alegre has a chance of becoming the Brazilian Las Vegas. The courts in Rio Grande do Sul no longer consider gambling a crime, and it was this jurisprudence that caught the attention of Minister Luiz Fux when voting for the general repercussion of the issue.

"The Criminal Appeals Panels of the Court of Justice of the State of Rio Grande do Sul have understood that the conduct is not a crime, which demonstrates that, in that federative unit, the practice of gambling is no longer considered a criminal offense," said Minister Luiz Fux in his vote recognizing the general repercussion of the issue.

For the Public Prosecutor's Office of Rio Grande do Sul, gambling is still a crime. It was this body that brought the case to the Supreme Court, disagreeing with the position of the Rio Grande do Sul courts, more specifically with a ruling by the Appeals Panel of the Special Criminal Courts.

This branch of the local judiciary considered the conduct of operating a gambling establishment atypical, not viewing the practice as a criminal offense, arguing that the grounds that supported the prohibition do not align with current constitutional principles. In the Supreme Court, the case became Extraordinary Appeal 966.177.

Tales of réis

Free enterprise and fundamental liberties are the arguments used by the courts in Rio Grande do Sul to define the prohibition of the jogo do bicho (animal lottery), 21 (black market), roulette, and similar games as unconstitutional.

The legislation on this subject dates back to 1941, and its age is evident in the wording of the penalties stipulated. The fine was "two to fifteen contos de réis". Two years ago, the text was updated by Law 13.155/2015, and the amount to be paid by anyone found participating in gambling, even online or through any other means of communication, as a bookmaker or bettor, was set at between R$ 2,000 and R$ 200,000.

According to article 50 of the Law on Minor Offenses, establishing or operating a gambling establishment in a public place or a place accessible to the public, whether or not an entrance fee is charged, is a minor offense punishable by simple imprisonment for three months to one year, plus a fine.

In other instances, however, the exploitation of gambling is not viewed with the same leniency by judges in Rio Grande do Sul. This is especially true of the Superior Court of Justice, which recently condemned a company that promoted bingo games to pay collective moral damages. In another case, the STJ ruled that bingo for charitable purposes is a crime , but does not generate collective moral damages.

Route to other countries

If the Supreme Federal Court (STF) decriminalizes the practice, the eventual emergence of casinos will still depend on federal law. According to Luciano de Souza Godoy, from PVG Advogados, the STF may understand that there is no criminal act in the conduct and not criminally convict a person for gambling. Therefore, there will be no criminal punishment such as imprisonment, restriction of rights, or fines.

“Gambling is a private economic activity that will depend on authorization from the State. For this, we will need a federal law, creating criteria for authorization, who can apply, which locations, how much tax will be paid, and how it will operate,” Godoy stated in an interview with ConJur.

In favor of legalization, the lawyer is a scholar on the subject and has published articles on gambling. “There are already several legal gambling games in Brazil. All developed countries have casinos to boost tourism. For it to be a successful experience, effective oversight and tax collection are necessary,” he concludes.

Bill

Meanwhile, Bill 442/91, which seeks to establish a regulatory framework for the legalization of gambling in Brazil, is being processed in Congress. A commission was formed in the Chamber of Deputies to debate the issue. In one of the meetings, in December, federal deputy Roberto Lucena (PV-SP), who requested the creation of the commission, spoke out against it.

“The profit is private, but the cost is social. There will be an increase in public spending on healthcare for gambling addicts, as well as on social security expenses, such as sick pay and pensions,” Lucena stated.

Also present at the debate, the Secretary of Institutional Relations of the Attorney General's Office, Peterson de Paula Pereira, emphasized that legalization opens the field for the practice of crimes. "It will be a fertile instrument for concealing assets derived from crime, corruption, and money laundering."

At the same event, the Federal Revenue Service auditor, Floriano Martins de Sá Neto, said that the institution is not equipped to oversee gambling. "We will have problems bringing this revenue into the real world."

The experts and parliamentarians who defended the approval of the regulatory framework appealed to economic arguments. “The investment will reach 700 billion dollars. We are missing out on wealth from gambling in the country,” stated Arlindo Pereira Figueiredo Júnior, president of the Brazilian Association of Electronic Games and Similar Activities (Ajes). ( Revista Consultor Jurídico – Fernando Martines)