Major operators keep a close eye on Brazilian market despite political setbacks

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With the Brazilian government once again in turmoil and the mandate of President Michel Temer hanging by a thread after he was alleged to be linked to a corruption scandal in May, Casino Review looks at the prospects for the legalisation of gambling in the country.


With the Japanese market opening, the Brazilian region remains gaming’s last frontier, while the prospects for the country’s gambling market opening were looking optimistic in 2016, the legislation’s forward momentum for seems to have waned. Meanwhile, a fresh scandal affecting the presidency has the potential to throw a further spanner in the cogs of government.

Presently the Brazilian National Congress has two bills for the legislation of gaming running in parallel in the Chamber of Deputies and the Senate.

The Senate’s bill, PLS 186/2014, was passed back to the upper house’s Constitution and Justice Commission for further analysis following a vote in late March.

However while hopes were raised that there could have been a vote on the Chamber of Deputies’ bill at the end of last year, since then the legislation appears to have become bogged down in the political quagmire.

While PL442/1991 is officially waiting to be voted on by a plenary of the lower house, pending its inclusion on the agenda by the president of the house, Rodrigo Maia, the reality is that it is waiting in line behind a number of other politically sensitive pieces of legislation.

“The bills are not progressing,” states Luiz Felipe Maia, a gaming lawyer and founding partner in Oliveira Ramos, Maia e Advogados Associados. “What’s happening is that currently we have a number of significant reforms that are being voted on – the pension reform, the labour reform etc – and they are all being discussed at the same time in the Congress.

“At the moment, given the other reforms, the government simply can’t afford to lose the support of those Congressman who are against the legalisation of gaming, from a political standpoint they can’t afford to make any enemies.”

“Right now, now the government’s attention is directed toward these reforms but I think we may see some progress on both bills in the second semester, once and if, the reforms are approved.”

While progress is slow on the political front, a number of highlevel visits by senior gambling industry executives show the international industry is keeping a close watch on Latin America’s largest economy.

In May, Las Vegas Sands president Sheldon Adelson reportedly met with the Mayor of Rio de Janeiro, Marcelo Crivella, before heading to Brasilia, the country’s capital. During the meeting with Crivella, Adelson advanced plans for a project in Brazil that would represent an investment of around $8bn, Brazilian newspaper O Globo reported.

This project is said to follow the same idea of the integrated resorts built in Macau, and could generate over 10,000 jobs. Adelson reportedly also mentioned that the project might depend on the capacity of the city to receive tourists for gambling, inferring that the city would need to have more 4 and 5 star hotels.

This is not the first such highprofile visit, local media recently reported a visit by the head of MGM Resorts, James Murem, while the former Mayor of Las Vegas and current top executive at Caesars Entertainment, Jan Laverty Jones, had also been seen in Brazil’s capital city.

The list is not restricted to the Americans, Portuguese Estoril Sol group and an Austrian state-run operator also met with Brazil’s high officials to present their own projects.

“Investors should definitely try to meet with decision makers to show them the potential of the industry,” contends Maia. “In terms of our economy, this is just the perfect time to regulate gaming, because investing here is currently very cheap, unlike how it was six or seven years ago.

“We have some financial difficulties here, the state is almost bankrupt, and when politicians see the potential to generate $2-3bn, that will make them work to push through the regulation, so, all these visits, all this pressure, it’s great.”

Maia suggests that a separate bill being developed by the Brazilian Ministry of Tourism could help break the political deadlock, for landbased casinos and sports betting at least.

“The Ministry of Tourism is procasino and is working on a draft bill for casinos, I think we may end up with sports betting and casinos regulated in two distinct bills of law put forward by the government.”

Given that both casinos and sports betting are seen as more acceptable by Brazil’s population than bingos and jogo de bicho, from a political standpoint they have the potential to be more straightforward to approve as opposed to legalising the latter.

“Additionally, casinos have the appeal of creating jobs and improving tourism while sports betting is economically attractive since it brings revenue easily, because all they have to do is set the licence to work,” he adds. “While we are not like Asia, I think there is room for maybe three or four large casino resorts in Brazil.”

The idea of legalising all gambling segments simultaneously, as proposed in both PL442/1991 and PLS 186/2014 may have been overambitious, Maia proposes.

“Legalising bingos, lotteries, casinos, jogo de bicho, sports betting, single-site slot machines, and online gaming is too much to be done at once, especially in a country without any kind of background in regulating gambling, like Brazil,” he explains. “I don’t know of any jurisdictions that have regulated all the verticals at the same time, without having a regulatory board in place.”

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