The UK’s European university

It’s all about that place: commercial

bingo regulation in Brazil.

Toni Williams, and Maria Luiza Kurban Jobim

Brazil is one of a minority of countries where law tightly

restricts gambling products and opportunities.

Dória, Estudo de uma modalidade de jogo no mercado Brasileiro, (2014 IJL) p.4

Gambling in Brazil: casinos

http://acervo.oglobo.globo.com/fotogalerias/os-cassinos-suas-

estrelas-9947137

http://www.pocosdecaldas.mg.gov.br/site/?page_id=10541

Despite prohibition some games of chance are

well-rooted and widely practiced

Lotteries thrive in Brazil

Hunting of the Snark: (the search for bingo in

Brazil)

• What we were looking for… experience and practice of bingo as

an understudied social activity, an

equal chance game, regulated by

multiple social and legal processes

and norms.

• purposeful / purposeless

(fundraising, leisure, older

women’s leisure, working class

women’s leisure, families,

female)

• Active, participatory, skill

(cognitive, coordination)/luck

What we found • … More than • 51% of the Brazilian

population think bingos are related to

criminal practices such as money

laundering, tax evasion, and increasing

violence. To 43%, the bingo halls have no

positive features. (CPI dos Bingos 2006,

p.120)

Organised• crime and gambling are

“conjoined twins”.

Since the beginning of their activities in •1993, the bingo halls have rendered a

disservice to the nation…

Bingo has among its stakeholders • … who

…represent the interests of an

international organised mafia (CPI dos

Bingos 2006 pp.7-8).

Gambling markets under neoliberalism

Adams thesis

Bingo in Brazil: an open

and shut case

• Widening and deepening

of play encouraged or at

least endorsed by the

state.

• 4 phase process• Emergence

• Regulation

• Liberalisation

• Normalisation

1993

Lei Zico (Lei n.8.672/93) Decreto n.

988/93

1998

Lei Pele (Lei n. 9.615/98)

Decreto 2.574/98

2000

Lei Maguito (Lei n.

9.981/00)

Enabling (commercial) bingo through

privatisation of sports development…

• 1993 Lei Zico, Art. 57 “Sports clubs and Olympic

sports federations able to demonstrate active

participation in Olympic sports may be

authorised by the Treasuries of their respective

states to hold events intended to raise money for

sports development by means of sweepstakes

called Bingo, or similar.”

• Why? [Lei Zico] creates conditions for the

beginning of a new era of sport, with an

enhanced role for the private sector and the

reduction of state interference in sporting

activities … with the goal of implementing a

sporting democracy. (Dossiê Lei Zico, p.260).

• [Lei Zico aims to] (a) expel from sporting

legislation any authoritarian philosophy, which is

disciplinary, controlling, centralised, restrictive,

elitist and protective of personal and group

interests; … and (c) enact, in the sports field, the

predominance of a ‘destatization’ philosophy …

eliminating state interference in the internal

business of sport clubs” (Dossiê Lei Zico, p.392)

“A working group was established to evaluate how to bring resources to [sports development], and someone said we will do bingo because bingo was reputed to be strong sponsor of competitive sailing in England. The model was imported without consultation. No one had operated bingo or had any previous experience of this model in Brazil. It simply did not exist here. Then along came the legislator with Lei Zico and the model was approved.” (Male, former bingo owner, São Paulo).

The success of bingo liberalisation in Brazil:

number of operating bingos *after* closure of the market

Source: data reported in the CPI dos Bingos, 2006 pp.112-3

“Within four months, seven bingo halls began to work regularly in Porto Alegre center, there are another 10 applications for authorization for establishments of this kind in the capital and many plans for the interior. "It became a craze," says Rildo Machado da Silva, Bingo Beach Street supervisor. "Competition is getting stronger." Zero Hora 12 November 1994.

Bingo places in Brazil

Empress bingo in São Paulo - outside

How to use the new Kent PowerPoint template

Empress Bingo –

interiors

“There are some very sumptuous

establishments, such as the …

Empress Bingo, located in the city of

São Paulo. The magnificence of

these bingos is evident from the

outside. Their luxurious interiors are

designed to impress”. (CPI dos

Bingos p.116).

Bingo Pamplona: Exterior

Bingo Pamplona:

Interiors

Brazilian bingos: not entirely homogenous

• “Bingo Roma was famous for being one of the most luxurious places in the city ... the first

time I went it was a beautiful place with lovely chairs and tables made of marble.” (public

official, RS)

• “A little over a year ago, the image of a bingo hall used to be a common room with long

tables, dining chairs, straw and underpaid workers trying to have fun or earn some money

without spending a lot. Today a bingo is a carpeted environment filled with mirrors, full of

electronic equipment and waiters in ties serving imported whisky. …The old bingo has

became a chic leisure option.” (Zero Hora 1998).

• ”Our bingo brings together people representing 90% of the Gaúcho GDP.” (Bingo Manager in

Zero Hora November 12, 1998).

But there were other types of licensed bingo• …

• “There was a huge bingo on two floors. It gave us dinner, afternoon coffee… everything. It

was on two floors. One floor was only slot machines, another floor was only card bingo. It was

a huge hall and always crowded. It was in a mall and always packed because the people who

worked at the mall played a lot. Lunch-time was a time that the card bingos were always

packed. Card bingo was much cheaper. The slot machine is very expensive. So card bingo is

more popular.” (Female player, Rio Grande do Sul).

• “Central Bingo with its plastic tables and chairs and reusable cards mostly attracts the lower

and middle classes… the public who really understands bingo" (female bingo manager

quoted in Zero Hora November 12, 1998, p.5).

• “Our clients are ordinary people”, said the owner of the Royal Bingo, which recently opened

with its plain fittings and the lowest prices in the city. (Zero Hora November 12, 1998 p.5).

•

Bingo regulation timeline 1: Federal legislation

Zico Law (Lei nº • 8.672/93): + state level autonomyDecree• nº 981/93: loopholes Electronic Gaming Machines (EGM) permitted (slot-machines).

Pelé Law (Lei nº • 9.615/98): + federal empowermentDecree• nº 2.574/98 EGM permitted (each bingo hall – up to 400 EGM).

Maguito Law (Lei nº • 9.981/2000). Closed the market:No new • authorisationsNo • renewals of existing annually renewable authorisations.

Bingo regulation timeline post-2000: conflict

and resistance

• Medida Provisória nº 2.049/2004: rejected in theNational Congress – failed presidential decree;

• 2007 • Operação Furacão: exposes corruption of judicial power;• Súmula Vinculante 2: affirms federal government’s

exclusive control over gambling regulation; • CPI dos Bingos reports that foreign and domestic criminal

organisations had captured much of Brazil’s bingo market, but nonetheless recommended reopening the market withstronger and more effective regulation.

• Post -2007 • De facto closure of formal bingo market in Brazil followed

by opening of informal “clandestine” and itinerant bingos businesses in many parts of the country.

• Multiple bills in Brazil proposing legalisation• Significant expansion of gambling liberalisation elsewhere

Enforcement through place: confiscation and

decapitalisation…

• “at one point we had about ten illegal bingo halls that

were working simultaneously in Porto Alegre. So I

went there and closed them and the next day they

were open again. I tried as a strategy to seek to “de-

capitalise” these offenders, seizing all the material that

would include all the furniture, ie tables, chairs,

everything that they used to operate the bingo. We

sometimes took 300 or 400 chairs, armchairs, tables.

Even doing this, some bingos were still very fast to

reopen the establishment, which shows that they

really had a lot of capital to finance the reopening of

these locations.” (Male, Public Prosecutor, Rio Grande

do Sul).

Brazil case: summary of findings

Brazil• ’s regulatory arrangements from 1993-2007 left the retail

bingo market vulnerable to capture by economic criminals and

significantly damaged public confidence in the capacity of

regulation to protect a retail bingo market against crime and

corruption risks.

The return to prohibition does not benefit Brazil since clandestine •play continues and illegality generates costs of enforcement,

corruption, foregone jobs and taxable revenues; and gambling

problems, including fraud and the exploitation of vulnerabilities,

are driven underground.

It is implausible to think that Brazil can create a trusted licensed •bingo market comprised of private sector businesses without

robust, effective and well-funded regulation that is clearly

differentiated from and stronger than the failed regulatory

practices of 1993-2007.

Why did regulation fail to manage risks?

effectively

Commercial bingo • –created by the Brazilian elite in

pursuit of a privatisation agenda and to a substantial

extent to meet their image.

Regulation generally enabling and facilitative in form •but:

Bingo • legalised as an exception .. Exposing bingo as the only

non-state means of delivering gambling products and

services

Standards were poorly designed and created perverse •

incentives… constructed bingo as spaces requiring

considerable capital investment to establish and run.

Under• -investment in regulatory structures

Bingo project recommendations: Brazil case

• Legalise bingo

• More generally replace gambling prohibition with a

comprehensive regulatory system consisting of well-

staffed and properly funded regulatory agencies and

substantive regulatory provisions

• Draw on international good practice but tailor regulatory

arrangements to Brazil's distinctive history, cultures, legal

institutions and political arrangements. • Place regulatory powers including licensing, inspection, revenue

distribution, consumer protection and enforcement at the state

level

• Support state regulators to develop a network regulatory model to

maintain consistency of practice without centralisation.

Bingo project recommendations: Brazil case• Differentiate bingo as a specific form of gaming distinct from slot-

machines and casino games.

• Develop an expanded concept of responsible gambling that

incorporates systematic and effective conduct of business

regulation to protect players and improve fairness in the market. – Know Your Customer and Know your Provider principles;

– Implemented through revisions to Brazil’s Código de Defesa do

Consumidor (Consumer Protection Code);

– Include enforceable obligations on bingo providers to “treat customers

fairly” and to demonstrate to regulators their compliance.

• Bingo providers should be subject to duties to prevent crime,

including fraud, money laundering, bribery and corruption and to

demonstrate compliance.

• Develop "Bingo Watch" NGOs – to strengthen the capacity of civil

society, independently of the regulator, to assess and where

necessary critique the performances of bingo providers against

their regulatory duties to treat consumers fairly and prevent crime.

THE UK’S EUROPEAN UNIVERSITY

www.kent.ac.uk