Opinion: Brazil’s Congress – Running the Numbers?

Opinion, by Michael Royster

RIO DE JANEIRO, BRAZIL – It’s now August, and the two-week-long informal mid-winter holiday in Brazil is now over—except in Rio de Janeiro, where Olympic madness is set to begin its reign. Brazil’s Congress has its plate full this month, what with the impeachment proceedings starting up again, and a raft of legislation awaiting approval. Some of those measures will vastly change current practices.

Among the surprises is a proposal to legalize the “jogo do bicho”, the numbers racket invented in 1892 by Baron Drummond, curator of the Rio de Janeiro Zoo. Almost since its beginnings, the activity has been deemed a minor criminal infraction, not a full-fledged crime.

In Rio de Janeiro, the jogo do bicho has long been identified with Carnival, as most of the larger Carnival “schools” depended upon the numbers bosses for financial support. The law, however, does permit convictions and jail terms for the numbers bosses, and those have occasionally occurred.

Neither the criminal nature nor the jail terms have dissuaded many Cariocas from playing the game; a short walk around Rio de Janeiro will enable punters to take a flyer on their favorite animal, choosing from the 24 available. The results are published daily, and they are never rigged.

The proposal to legalize the game would, theoretically, make it a normal regulated business, liable for taxes, like the federal lotteries run by Caixa Econômica Federal, the government savings bank. The problem with this is that nobody really knows how to enforce any of these taxes.

What should dissuade the gullible are the returns. If you bet a four number combination you have 1 chance in 10,000 to win; but if you do win, you are paid a maximum of 4,000 times your bet. In other words, the house has a 60% cut—which is how the bosses can afford to finance Carnaval schools as well as paying the thousands of sidewalk salespeople and runners.

Will that change if the game is legalized? Maybe and maybe not. The Caixa Econômica Federal does not publish figures as to what its house cut is, but most estimates are that it’s probably close to that of the numbers racket. Government lottery proceeds are supposed to go, by law, to benefit education and Brazilian football clubs.

On the other hand, the director positions of the Caixa Economica Federal, and even second-tier positions there, have long been hotly contested by politicians in Brazil, because of the huge amount of cash that flows through the bank. The more cash in, the more opportunities to skim off something for your political party.

The Federal Public Ministry is against legalization, claiming it can only lead to more money laundering, tax evasion and corruption. Politicians in Congress say “stuff and nonsense” to those worries, but the Curmudgeon suspects that the Feds are right — legalization will benefit corrupt politicians more than the Brazilian people who are addicted to the numbers racket.

The Curmudgeon is happy to take a respite from impeachment and such like, to discuss legislative proposals, even if he doesn’t agree with them.