Sands could be among the first global investors
Seventy years after the last legal casino closed in Brazil, legislators are looking to bring back the bettors. According to Americas Quarterly, an increasing number of lawmakers are on board with a proposal that could bring as many as 35 casinos to the South American country—the equivalent of one casino for each state in the land, for a total of 655,000 gaming machines.
Last December, a Senate committee approved a proposal to legalize online and land-based casino and bingo games, including those 35 licenses. In May, the country staged the second annual Brazilian Gaming Congress, attended by members of the Brazilian National Congress and gaming industry representatives.
In April, the committee passed legislation that would authorize casinos with non-gaming amenities including hotels, restaurants and retail. A bingo hall would be allowed for every 150,000 residents, and online gaming would be legalized alongside the numbers game jogo do bicho, a ubiquitous game that has been played on the quiet since it was outlawed in 1946.
With “signals of support” from interim President Michel Temer and his cabinet, Brazil could open the floodgates to legal gaming as early as August, when the Rio Olympics are set to open. If it makes the move, Brazil would follow in the footsteps of neighbors like Argentina, which has doubled its gaming halls from 75 to more than 150 in the last nine years; and Bolivia, which awarded its first casino license in 2014.
“If you ask me what are the odds of Brazil becoming a global gaming destination within the next five to 10 years, I would say they are quite high,” said Brazilian gaming analyst Alexandre Fonseca.
Observers are now waiting for the House to introduce its own gaming bill, after which both legislative bodies would need to reach agreement on common legislation for Temer to sign.
Lawyer Cristina Romero of Madrid said she expects “some delay in the passing of the bill or even some alternative regulatory routes.” But Todd Eilers of U.S.-based Eilers Research says he expects swift passage, which could mean the first casino could open as early as 2019. The list of suitors could include Codere of Spain and Novomatic of Austria, as well as the Las Vegas Sands Corp., MGM Resorts International and Wynn Resorts of the United States, he says.
“This year’s expansion proposal has the best odds of passing in over a decade due to the current state of the Brazilian economy and desperate need for additional tax revenue combined with growing political support,” Eilers wrote in an April report.
The movement toward casinos—and lots of them—has special urgency for Brazil, which this year saw its worst economic growth performance in a quarter century, causing Moody’s Investment Services to downgrade its investment grade to junk status. The economy is expected to contract 3.8 percent this year, a repeat of 2015, the Wall Street Journal has reported. No wonder gaming looks like a good bet. Based on a 30 percent tax rate, analysts say, the industry could generate up to $3.7 billion for the government.
“We must have the courage to face in a serious, professional and republican way the legalization of gambling,” Tourism Minister Henrique Eduardo Alves has said. “Currently, people play clandestinely, without generating any revenue for the country”—primarily in neighboring
Uruguay.
“The demand for gambling in Brazil is huge,” said Edgar Lenzi, president of Curitiba-based gaming consultancy BetConsult. And a hotel concierge told AQ, “If you go to the first casino in Argentina, you’ll find more Brazilians than Argentinians. I’d love to be able to gamble in Brazil.”
