Newton Cardoso Jr: ‘Tax revenue above R $ 30 billion is estimated with legalization of games in Brazil’

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Newton Cardoso Jr
Federal deputy Newton Cardoso Jr. Photo: Agência Câmara

In order to promote the debate around the release of gambling in Brazil, journalist Luiz Carlos Prestes Filho began to publish a series of interviews with politicians from the state and federal spheres, businessmen, lawyers and other professionals related to the sector.

Prestes Filho is a specialist in Cultural Economics and Local Economic Development and author of numerous publications, such as “Carnival Economy Production Chain” (2010), “The Theory of Probabilities in the Game, Science and Public Policies” (2017) and from the magazine “Inteligência Empresarial” (2010) focused on regulation: “Free time as an economic asset”.

According to an interview on the “O Outro Lado da Notícias” website, with federal deputy Newton Cardoso Jr., member of the Tourism Commission and of the Finance and Taxation Committee in the Federal Chamber, the politician stressed that the country may be losing time and relevance to the not legalize the gambling market.

Check out Luiz Carlos Prestes Filho’s interview with Newton Cardoso Jr

Luiz Carlos Prestes Filho: Money betting games managed by the private sector in Brazil are on the agenda at the Chamber of Federal Deputies. How is the discussion on the topic?

Newton Cardoso Jr .: The theme of gambling regulation in Brazil is something that causes controversy, without a doubt. There is a general understanding between a segment of opinion makers and the traditional media that this activity has strong links with organized crime, in addition to promoting money laundering, encouraging prostitution and negatively impacting people’s lives because of addiction to gambling , or ludopathy. But are these arguments solid and are they the real cause of the rejection, specific to this social segment, of the legalization of the activity?

The truth is that it is exclusively up to the National Congress, the representative house of the people and the cradle of the rules that govern life in society, the decision to regulate and legalize gambling in Brazil. The theme is divided into three areas within the scope of internal discussion. First, considered the main axis of activity organization in Brazil, the Regulatory Framework for the Games. Although several bills are in progress in the Senate and in the Chamber of Deputies, PL 442/92 is what appears to gather the majority of the GDP of games in its legal text. This PL received a favorable opinion in 2017 by the Special Committee constituted for its appreciation.

It covers Casinos, Bingos, Sports Bets, Video Games, Virtual or Electronic Bets and also the Jogo do Bicho. Second, the theme of Lotteries. There is an endless battle between concentrating power at the federal level to exploit this type of game or allowing States and Municipalities to also constitute their legitimate concessions for this specific type of game. Here are also the draws, capitalizations and other derived models. An area of ​​the fortune economy that is judicialized due to the desire of different federal entities to grab the tax collection that comes from lotteries. Third and last, sports betting.

In 2018, Congress “advanced another step” on the regulation board by allowing sports betting in Brazil. This law has not yet “come to pass”, basically because the regulation by the Federal Government has not yet hit the right fiscal model for the market and also because the participation of Sport is still an uncertainty and lacks an aggregator who talks to all the stakeholders of the Sport in the country. All of this said above serves to guide the answer to the question: How does Congress enter the theme of games in 2021? Basically without major advances. If there is a positive point, it is the declared desire of the Government’s economic area to see the games as part of the federal revenue under President Bolsonaro’s mandate.

Another highlight is a recent survey conducted among Congressmen, in which more than 60% declared themselves in favor of the regulation of gambling in Brazil. 2021 is a year of recovery, in every way. On the agenda of the Congress are projects such as Tax, Administrative Reform, Central Bank Autonomy, etc. Legalizing games can and should be on the agenda. Approving legislation, still this year, that allows the country to explore the activity of wealth becomes a fundamental step in the process of economic recovery with generation of jobs and income.

Luiz Carlos Prestes Filho: Is the text of the Regulatory Framework for Gambling ready?

Newton Cardoso Jr .: As we discussed above, PL 442/92, known as the Regulatory Framework for the Gambling, is the legal text that releases the largest number of activities among the known games of fortune. It is the ideal text, although it may encounter occasional difficulties when in fact it goes to plenary. There is no priority of one activity over another in the text, but the return of the Casinos in Brazil is emblematic and has an aura of nostalgia that piques both the curiosity of many and the repudiation of some. On the other hand, the discussion about the rise of electronic games over physical ones is marginal from the text of the law. This process, apparently irreversible, happens everywhere on the planet and may have been strongly catalyzed due to the pandemic that originated in 2020.

Luiz Carlos Prestes Filho: Has there been an excessive appreciation of Casinos Resorts?

Newton Cardoso Jr .: For sure. The feeling that is perceived in Congress is that the release of the Casino Resort already means an advance, a paradigm break in the legalization of gambling. That old saying: the good is the enemy of the great.

Luiz Carlos Prestes Filho: What are the priorities?

Newton Cardoso Jr .: There is no prioritization of a given region to the detriment of another in the law and even Congress does not accept such a classification. It is important to remember, of course, the need to let the market self-regulate itself in terms of project implementation feasibility. If a Casino fits in any city, is the market studies that will say that, not the Congress.

Luiz Carlos Prestes Filho: What is the Bill that is has the most support in the National Congress?

Newton Cardoso Jr .: PL442. He has a preference for integrated resorts, but the amendment that I approved with the rapporteur at the time of the Special Commission argues that specific regions of the country, regions such as hydro-mineral resorts can be exempted from installing resorts as a requirement to have Casinos operating in these.

Luiz Carlos Prestes Filho: Could the towns that suffered during the Covid 19 pandemic benefit from the regulation?

Newton Cardoso Jr .: We estimate a tax revenue above R $ 30 billion with the legalization of gambling in Brazil. In addition, more importantly, 500,000 jobs can be generated by installing several concessions throughout Brazil. Tourism, first to be impacted by the pandemic and probably the last to get rid of the harmful effects of it, can be highly benefited and has a direct link with the legalization of the activity.

Luiz Carlos Prestes Filho: Does the tradition of casinos in Minas Gerais deserve respect and recognition?

Newton Cardoso Jr .: Minas Gerais is a different case in terms of operation and the history of games. Not only received the first Casino in Brazil, in 1897 in the city of Caxambu, but there is a moral debt with cities in the water circuit, our hydro-mineral estates, as the economic viability of several of them was reaped without notice, more than 70 years ago , when gambling were suddenly banned.

With the amendment I approved in PL442, there is hope: the right of these resorts to operate Casinos without the need to build integrated resorts. It would be the independent casinos, so recognized by the UNLV studies in Las Vegas, comparing the different North American regions as to the revenue and operation of games.

Luiz Carlos Prestes Filho: Do you visited countries where gambling are a natural part of economic activities?

Newton Cardoso Jr .: I visited Portugal, Las Vegas in the U.S., Macau and Foz do Iguaçu in Brazil. I know from personal experience Punta del Este in Uruguay, London in England and Atlantic City in the U.S. In each mission that I participated with colleagues of the Tourism Commission I was able to consolidate the following thought: Brazil is sitting on the back row of history, for not legalizing gambling and getiing stuck in the thought of releasing only integrated resorts is to hamper the right to development for different regions our vast country.

Luiz Carlos Prestes Filho: In April, the Supreme Federal Court (STF) will judge whether or not the Criminal Misdemeanor Law was approved by the Citizen Constitution of 1988. Can regulation happen via the supreme court?

Newton Cardoso Jr: The STF is the institution that most values ​​stability in the country and that seeks more legal security, regardless of the controversy that may exist on any topic. I doubt whether our highest court would propose such a change without first aligning with Congress what the consequences of a possible revision of the legal text, however old-fashioned its content may seem.

Luiz Carlos Prestes Filho: Does the federal executive, the ministers, approve the regulation?

Newton Cardoso Jr .: There is division within the Executive. Such a division could be resolved by a presidential will, but certainly the economy, more favorable than the contrary, has a decisive weight when analyzing the positive impact of jobs and tax collection in the long term.