Brazil has a long history of restrictive gambling laws. The 1941 decree outlawed games of chance, which included land-based and online casinos. As a resident, you could only place bets on state-controlled lotteries or horse races. If you wanted to get into the business of gambling, you were out of luck, too. Chances are, everything you thought about was illegal.
Indeed, gamblers could still play online games for real money at Royal Panda, but what if they wanted to play at a casino from their market? For a long time, that wasn’t possible. However, at the start of 2025, things changed. Brazil legalized online gambling, provided it had all of its licenses in order.
Latin America is moving closer and closer toward the gaming sector, and the effects are crossing borders over the Mercosur bloc. Argentina, Paraguay, and Uruguay are entering a new era alongside Brazil, and this article will talk more about how this will affect the region.
Why Is Brazil Pushing for Legalization?
Given the long history of gambling bans in Brazil, there is one burning question: why the change of mind? Well, there are several reasons why it made sense for Brazil to take on this path. This includes the following:
- Need for Revenue: Brazil reached a nominal deficit of 934.4 billion, which persists despite its attempts to reduce the debt. The hope is that the taxes from the gambling sector will help reduce that deficit, gradually restoring the public funds.
- Mercosur Bloc Competition: Countries such as Argentina or Uruguay already allow gambling, provided they are licensed by a reputable authority. They established casinos that attracted Brazilian tourists, bringing the tourism sector loads of money.
- Pressure from the Illegal Market: Gambling was outlawed in the US, but that doesn’t mean it wasn’t happening. In fact, it was flourishing and costing the government billions in lost taxes.
- Public Opinion: More and more surveys showed acceptance for gambling as a casual leisure activity. Eventually, Brazil had to cave.
By pushing for legalization, Brazil hoped not only to harness the revenue but also keep matters under control. Without regulation, consumers from the illegal gambling market were vulnerable. However, with regulation, they had access to consumer protection and responsible gambling measures.
What It Means for Brazil and the Mercosur Bloc
Legalizing gambling in Brazil could have great benefits for the country as well as a great impact on the Mercosur bloc. Some implications are good, but others could have a negative effect on the entire area. This includes the following:
Increase in Brazil Tax Revenue
Estimates suggest that the gambling market regulation could reach around $3 billion. This is good news for Brazil, as it strengthens the infrastructure and boosts public finance. Tourism will also likely flourish, which means people will no longer have to go to Uruguay or Argentina to gamble. Thus, Brazil could become a magnet for investors, drawing away funds that would have otherwise gone to smaller countries of the Mercosur bloc.
More Job Opportunities in Brazil
Gambling legalization could also open up thousands of jobs. Some are direct, like casino operators, whereas others are indirect (e.g., marketing teams). This could reduce unemployment in Brazil, as they no longer have to sit around in an unmoving job market. The government gets taxes from each new employer, which is a bonus.
Last but not least, Brazil would no longer lose its workforce to other countries in the Mercosur bloc. This is good news for Brazil, but bad news for neighboring countries. As a result, they will likely deal with a talent shortage, since Brazilians will no longer leave their home countries for work.
Tourism Development
With the money from gambling taxes, Brazil should finally have the resources necessary to improve the infrastructure. Brazilian entrepreneurs and offshore investors could create resorts and many other attractions that make Brazil a powerful destination.
The tourism shift benefits Brazil but negatively affects smaller countries such as Paraguay and Argentina. Many tourists went to the smaller countries simply because they could gamble while enjoying an exotic escape. With gambling legal in Brazil, tourism may drop in the smaller regions as everyone is choosing the more popular country.
Investment Competition
Gambling legalization in Brazil doesn’t just cause other countries of the Mercosur bloc to lose money; it causes them to lose investors, too. With casino operations now legal, investors may prioritize a Brazilian project over those in smaller countries.
This could pressure Mercosur countries to modernize their infrastructure further, so they could draw investors. This could be a good thing, since it improves the country, but it can also lead to even more expenses.
The legalization of gambling in Brazil can transform the landscape of the country and beyond. Most of the benefits extend to Brazil, but countries from the Mercosur bloc could also take this opportunity to improve themselves.
