Momentum is growing for expanded gaming in Brazil. Last week, just one day after the Chamber of Deputies green-lit a sports-betting bill, the Senate also approved it. PM 846/18 now goes on to the office of outgoing President Michel Temer, who is expected to sign it.
Provisional Measure 846/2018, which primarily deals with the disbursement of lottery proceeds, also authorizes the Ministry of Finance to regulate and license both land-based and online fixed-odds sports betting in a “competitive environment.”
The swiftness of the bill’s passage is unusual given Brazil’s longstanding indecisiveness about gaming. Proponents of casino gaming have been struggling for years to push that agenda, saying integrated resorts in the country could give a big boost to local and national economies. Felipe Santa Cruz, president of Brazilian Bar Association, wrote earlier this year in O Globo that gambling already exists, but provides no benefit to the government because it’s undercover. “The only effective way to combat illegal gambling, organized crime and prevent its use for money laundering is good regulation. Brazil cannot wait any longer,” he wrote. The delay in regulating only matters to illegal gambling.”
In May, current Tourism Minister Vinicius Lummertz said he could double the country’s 6 million annual international visitors with a broad-based program that includes gaming. “Approve casinos and resorts, facilitate the development of national and theme parks, and encourage the construction and structuring of marinas and tourist ports,” Lummertz said.
The latest measure was supported by both the current Minister of Public Security and the incoming Minister of Justice, both swayed by the plan’s potential to fund public security programs with lottery and betting proceeds.
Online gaming in Brazil is currently limited to digital monopoly offered by Loterias Caixa, which has been warmly received since its launch in August.
Games Magazine Brasil reports that in 2017, lotteries generated almost R$14 billion (US$3.7 billion), of which R$3 billion (US$795 million) went to education, culture, sports and public safety. The new bill wants to increase what is destined for security from about R$400 million (US$106 million) last year to more than R$1billion (US$265 million) next year.
Observers noted that Brazilians may want to think twice before bestowing more law enforcement powers on Jair Bolsonaro, the far-right retired military officer recently elected president of Brazil.
According to Games, if Bolsonaro had his druthers, he “would maintain the current prohibition of casinos, online bets, bingos, jogo do bicho, etc. However, being a non-traditional politician, is a man who knows how to listen and does not close in his thoughts but evaluates what is best for the country.”
Global operators will be watching to see what comes next. Brazil has been of great interest of U.S. operators, including the Las Vegas Sands Corp. In May 2017, Sands Chairman and CEO Sheldon Adelson met with Temer and other high-ranking Brazilian government officials in what was seen as a prelude to a business relationship around gaming; Rio De Janeiro Mayor Marcelo Crivella then said Adelson was prepared to invest up to $8 billion in a Brazilian integrated resort. However, as a fierce opponent of online games, Adelson could safely be counted out of the next big windfall.
For other operators and investors, Brazil is a natural target. It’s the largest country in South America, with a population of more than 208 million. Revenue forecasts for land-based market have ranged as high as $20 billion per year, which could mean as much as $6 billion in taxes for the government. Casino News Daily has called Brazil “global gambling’s sleeping giant,” with an estimated market value of more than R$18 billion (US$5.4 billion).
Pro-gaming lawmakers may try to resuscitate a gaming liberalization package that proposes casinos in multiple states, online gambling, sports betting, bingo and new lotteries.
Legalization of the industry is important, said Manoel Linhares, president of the Brazilian Association of Hotel Industry. “The hotel industry supports it, as it will generate taxes, jobs and attract more tourists.”
