Bolsonaro goes all in on gambling to boost the economy

. Aug 02, 2020
Bolsonaro goes all in on gambling to boost the economy Image: Adam Vilimek

On the night of April 30, 1946, in the iconic Copacabana Palace hotel in Rio de Janeiro, the last casino roulette wheel spun in Brazil. Or, at least, the last legal game of roulette. The following day, then-President Eurico Gaspar Dutra issued a decree that outlawed gambling, stating that it “went against Brazil’s religious principles” and created “pernicious abuses to morals and customs.” At that point, Brazil had roughly 70 casinos, and the gambling industry directly employed 40,000 workers.

Though illegal, gambling continued to exist in Brazil, whether in the form of the fabled jogo do bicho animal lottery — a 130-year-old multimillionaire racket which is so popular across the country that it has its own smartphone apps — or illegal, often rigged electronic bingo machines

And while the gambling lobby has tried for decades to win support in Congress to make a comeback, that push gained new breath once President Jair Bolsonaro rose to power.

</p> <p>The idea of making gambling legal once again is at full steam thanks to the lobbying of the president&#8217;s politician sons and allies in Congress —&nbsp;most of whom have been cited in graft probes in the past. They were given carte blanche to negotiate support for bills to make casinos legal again —&nbsp;even if Jair Bolsonaro the candidate was adamantly against the idea, saying casinos were &#8220;only good to launder money&#8221; and &#8220;destroy lives.&#8221;</p> <p>Under the president&#8217;s auspices, however, the Tourism Ministry has elaborated a plan to bring casinos back in the form of &#8220;integrated resorts&#8221; — that is, as hotel casinos. The government claims that gambling is legal in almost all G20 countries as a way to boost tourism. &#8220;Our intention is to promote a wide debate around this issue, especially in the context of a post-pandemic recovery effort,&#8221; the ministry told <strong>The Brazilian Report</strong> in a written statement.</p> <p>Legal gambling, however, is just one of 22 strategic projects to attract tourism from Brazil and abroad. Other initiatives include making air travel cheaper, improving infrastructure at ports and airports, and giving incentives to the cruise industry. Moreover, the government wants to improve the management of cultural and natural locations — as well as of Brazil&#8217;s world heritage sites.</p> <p>A thorn on the president&#8217;s side is the Evangelical vote —&nbsp;a key constituency for Mr. Bolsonaro. Preachers have lambasted the idea of casinos in Brazil, and have been endorsed by Mr. Bolsonaro&#8217;s usually obedient Human Rights Minister Damares Alves, herself an Evangelical pastor. During an April 22 cabinet meeting which was <a href="">recorded and made public</a>, Ms. Alves called authorizing gambling as making a &#8220;pact with the devil.&#8221;&nbsp;</p> <h2>No shortage of conflict of interests</h2> <p>In March 2019, during a trip to Washington, President Jair Bolsonaro discussed bringing casinos to Brazil with his U.S. counterpart Donald Trump. And his eldest son Senator Flávio Bolsonaro — who is facing money-laundering accusations of his own —&nbsp;visited Las Vegas to meet with casino tycoons. The list of liaisons included a sit-down with Sheldon Adelson, the billionaire CEO of the Las Vegas Sands corporation, expected to donate over <a href="">USD 100 million to Mr. Trump&#8217;s re-election campaign</a> and Republican congressional candidates.</p> <p>&#8220;Integrated resorts, such as those in Singapore, create thousands of jobs and feed an entire production chain in a short period of time. We had an important meeting, in which big corporations stressed their disposition to invest billions of dollars in Brazil —&nbsp;as long as we regulate [gambling],&#8221; said the president&#8217;s son, in a video recorded at The Venetian casino in Las Vegas.</p> <p>The proposal also has the support of Economy Minister Paulo Guedes. &#8220;The president is talking about freedom [when defending gambling]. Let the guy get screwed in the way he wants to. Especially if he is an adult and conscious billionaire. Let him get screwed, damn it! In [casinos] there is no unprotected little Brazilian getting in,&#8221; he said, during a cabinet meeting.</p> <p>A number of politicians supported the idea of turning their constituencies into a &#8220;Brazilian Las Vegas.&#8221; In most cases, this coincides with areas in which they own large chunks of land which happen to be ideal places for these &#8220;integrated resorts.&#8221;&nbsp;</p> <p>The Bolsonaro family have talked up the possibility of a grand project along the south coast of the Rio de Janeiro state —&nbsp;where the family owns at least one property — which would be filled with casinos, bringing in millions in taxes and employing thousands of people.&nbsp;</p> <p>Congresswoman Magda Mofatto, meanwhile, wants the national gambling capital to be Caldas Novas&nbsp;— a tourist town in the Center-West state of Goiás known for its thermal waters. She also highlights the potential jobs which could be created, but her résumé — which includes a conviction for public malfeasance — suggests that she might have ulterior motives. Ms. Mofatto owns 12 hotels in Caldas Novas and a 20-hectare area that would be suited for the city&#8217;s first gambling resort.</p> <h2>Gambling bill ready for the floor</h2> <p>Lobbyists claim Brazil could raise an extra BRL 20 billion (USD 3.8 billion) in taxes from gambling enterprises. Another BRL 7 billion would come through licensing and concession fees. In a moment of economic uncertainty, that would be much-welcomed money. Not to mention the 1.3 million direct and indirect jobs that would be created, according to estimates from the Tourism Ministry.</p> <p>The government also says casinos could give the tourism sector a jump-start after it was ravaged by the Covid-19 pandemic.</p> <p>There is a <a href="">bill, legalizing casinos</a>, ready to be voted on in the House. It would create a cap for the number of casinos per state, in accordance with their population. States with up to 15 million people would only house one casino; the number would rise to two, in states with a population between 15 and 25 million people. São Paulo — the only state with over 25 million inhabitants, according to <a href=";t=resultados">official data</a> — would be allowed three.</p> <p>The proposal has the support of many congressmen from the so-called &#8220;Big Center,&#8221; the conglomerate of conservative forces that has gained considerable influence within the Bolsonaro administration. But there is as of yet no consensus over the reach of the bill, with negotiations set to drag on before its approval.</p> <h2>Gambling in Brazil no easy sell</h2> <p>While the disapproval of Evangelical voters is considered a major obstacle to legalizing gambling in Brazil, that is more because they are so important for the president&#8217;s coalition. But in reality, there is no shortage of detractors to the project. Senator Eduardo Girão, from the state of Ceará — a picture-perfect region in Brazil that would certainly be attractive for these &#8220;integrated resorts&#8221; —&nbsp;is an adamant opponent.&nbsp;</p> <p>He cites a study by economist Ricardo Gazel, a researcher who holds a Ph.D. from the University of Illinois, suggesting that legal gambling would incur BRL 4.5 billion in public spending to treat the side effects of addictions.&nbsp;</p> <p>Moreover, he fears that casinos will quickly turn into money laundering havens for drug cartels and urban paramilitary mafias. &#8220;We have consulted with the Federal Police and the Federal Revenue Service. They all say gambling is a gateway to money laundering and tax evasion. Casinos bring crime,&#8221; he tells <strong>The Brazilian Report</strong>.&nbsp;</p> <p>And it&#8217;s hard to dispute Mr. Girão&#8217;s words. Almost every attempt to make casinos legal in Brazil had to be rolled back due to corruption scandals.&nbsp;</p> <p>Early in the 1990s, the government allowed the operation of electronic bingo machines, under the argument that they would raise tax revenue. But just over a decade later, over 1,100 bingos were shut down after it became clear they were being operated by organized crime groups.

Renato Alves

Renato Alves is a Brazilian journalist who has worked for Correio Braziliense and Crusoé.

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