RIO DE JANEIRO, BRAZIL - Legislation to re-legalise bingo in Brazil is being stalled by politicians and may not be passed for some time, the gambling industry has been warned.
Bingo in Brazil has been illegal since February 2004 when President Luiz Inácio Lula da Silva ordered the closure of more than 4,000 bingo halls. They had been rumoured to be centres of corruption and money laundering.
The Brazilian Commission of Finances and Taxes has already indicated that it favours bingo halls being legalised but the proposal must be passed by the Chamber of Representatives and analysts warned there is little political impetus for legislation to be passed. The bill is (PL) Nº 1986/03 and has been on the blocks to be passed for some months.
If bingo is legalised in Brazil it will be highly taxed. It is planned that 70 per cent of player’s bingo stakes will be returned to players and that 17% will be taken in tax. The 17% takeout will be made up of a 15% contribution to the Brazilian health system including gambling addiction centres, 1% to a culture fund and 1% to a public sports fund. On top of this bingo halls will be required to pay a monthly regulatory fee of US$11,233.
Operators will therefore need to have a big enough bingo hall to ensure that the 13% of bingo stakes they are allowed to retain will cover their monthly regulatory fee, staffing costs, building rental and maintenance and other costs. Some managers who owned bingo halls prior to 2004 said that the costs would make many of the local bingo halls that used to thrive in Brazil commercially inefficient.
Bingo industry estimates suggest that legislation could spark the opening of a 1,500 new bingo halls and generate as many as 250,000 new jobs. It is thought that US$1.7 billion will be spent by operators setting up new bingo halls and that bingo games could generate annual revenues of US$4.8 billion within two years.
