Spurred by financial meltdown
The devastating economic crisis in Brazil may finally cause the country to open the doors to legal casino gaming. The nation known as the “sleeping giant” of gaming jurisdictions banned the pastime some 70 years ago—with exceptions like the lottery and horse betting industry—but has been inching toward a reversal of that ban due to the nation’s financial meltdown.
This year, the country 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.
Last December, a special economic development committee of the Federal Senate approved a proposal to legalize online and land-based casino and bingo games, including the allotment of 35 casino licenses—one for every state in the land, for a total of 655,000 gaming machines. And last month, the country welcomed the second annual Brazilian Gaming Congress, attended by members of the Brazilian National Congress and gaming industry representatives.
While the Senate bill is still in committee, there is urgency behind the campaign to legalize, according to CDC Gaming Reports. If approved in the general assembly, it will head to the House of Representatives and finally President Dilma Rousseff, who has been threatened with impeachment for the economic situation, for heading an allegedly corrupt regime, and for doing little to change the hostile climate for business in Brazil. On the World Bank’s annual “Doing Business” report, Brazil ranked 116 out of 189 countries for ease of doing business, just two spots ahead of Iran.
“Brazilian bureaucracies tend to be where things go to die,” wrote Aaron Stanley of CDC Gaming Reports, adding that 3 million jobs have been lost in the country since the beginning of 2015.
“We must have the courage to face in a serious, professional and republican way the legalization of gambling,” Tourism Minister Henrique Eduardo Alves said. “Currently, people play clandestinely, without generating any revenue for the country”—primarily in neighboring Uruguay.
