A recent meeting in Brazil between casino tycoon Sheldon Adelson and the country’s president, Michel Temer, has ignited speculation that the nation of 200 million may become home to a major resort gaming industry sooner rather than later.
The billionaire chairman and CEO of Las Vegas Sands is the latest of several U.S. gaming leaders to pay make the trek to South America’s largest country to kick some tires.
“Our company, like all of the companies actively looking at Brazil right now, is going through an exercise in process,” said Jan Jones Blackhurst, executive vice president of public policy and corporate responsibility for Las Vegas-based Caesars Entertainment.
She mentioned four cities that could potentially support casinos?Brasilia, Sao Paulo, Salvador de Bahia and Rio de Janeiro?either because of their potential as tourist destinations or because they’re home to the nation’s wealthiest residents.
“Personally, I like Brasilia because it’s the capital and many affluent people live there. It’s very safe,” she said.
Casino-style gambling has been outlawed for decades in the largest country in South America, the fifth-largest in the world by land mass, and though legalization has been talked about for years?a couple of related bills even now are making the rounds in the national parliament?little progress has been made to date in overcoming obstacles that inadequate infrastructure and endemic corruption, massive poverty and frighteningly high rates of urban crime.
“But you’re looking at what could be significant markets,” she said.
MGM Resorts International Chairman and CEO Jim Murren has been another recent visitor. A spokesman said the company is “is interested in it and monitoring it”.
“We see what everybody else sees,” said Sands President Rob Goldstein.
It’s a large population base and a fascinating country. Rio and especially Sao Paulo with its large population are compelling. If you look at comparable numbers for gaming in that region, it’s clearly a market you need to pay attention to.”
Adelson has spoken of Brazil as a “potentially very good opportunity,” although he has expressed reservations about the tumultuous economy and the need for more four- and five-star hotels.
“He decided to have a look for himself and he was impressed with what he saw,” Goldstein said.
In addition to Temer and other high-ranking officials, Adelson paid a call on Rio Mayor Marcelo Crivella, who told the newspaper O Globo the two men discussed potential investments in the city of around US$8 billion.
Goldstein noted that it’s still “early innings”.
“We’re still far away from seeing legislation and the approval process.”
Blackhurst agreed. “The final outcome will depend on what that legislation looks like. Is it at a tax level that allows you to invest the capital they expect? Are the regulations going to be of a standard that will allow U.S. companies with highly privileged and regulated licenses to be able to comfortably participate?”
