At Brazilian Gaming Congress, Industry Executives Ready to Bring Integrated Resorts to Latin America’s Largest Economy
Posted on: June 26, 2019, 03:31h.
Last updated on: June 26, 2019, 03:42h.
Executives from some well-known US gaming companies are considering Brazil, a country where gambling is currently illegal, as a potential destination for integrated resorts.
Speaking on a panel at the BgC (Brazilian Gaming Congress) 2019 conference in São Paulo, Caesars Entertainment Inc.’s John Maddox and Hard Rock International’s Alex Pariente, among others, discussed the challenges and potential associated with bringing casino gaming to Latin America’s largest economy.
Maddox, vice president of government relations at Caesars, said Brazil, the world’s sixth-largest country by population, has vast potential and that his company is “clearly interested in this jurisdiction,” reports Yogonet. He added that Caesars has been keeping abreast of gaming’s evolution in Brazil.
On Monday, Eldorado Resorts announced a $17.3 billion takeover offer for Caesars, a deal that could take up to a year to close and one that could affect either company’s international expansion efforts. Speaking on the BgC panel, Maddox did not directly discuss Eldorado’s proposed acquisition of his employer and how that transaction could impact Caesars’ Brazil plans.
Bruno Omori of the Brazilian Association for the Hospitality Industry championed the case for bringing integrated resorts to his country, noting “Brazil offers the most potential for gambling growth in the world,” according to Yogonet.
Gambling has been illegal in Brazil for more than eight decades. Decree Law 3688/1941 bars gambling there and punishes offenders with criminal misdemeanor charges, according to ICLG. The law defines gambling as games where victory and defeat hinge entirely or mainly on luck, wagering on horse racing outside of regulated venues and also bars sports betting.
A 2015 amendment to that law set fines ranging from about $520 to roughly $52,000 based on today’s exchange rates.
In a sign that Brazil’s harsh stance on wagering is thawing, a law passed there last December sets the stage for regulation of online and brick-and-mortar sports betting outlets.
Nearly three years ago, Brazil’s lower house of parliament, that country’s equivalent of the US House of Representatives, passed a bill laying a regulatory framework for broader casino gaming regulation in the country, but the legislation has not yet been considered the parliament’s upper body. That proposal, House Bill 442, would allow the 26 Brazilian states to each be home to up to three integrated resorts.
Plenty Of Interest
The comments made by Maddox and Pariente at BgC this week were not the first indications of US operators’ interest in Brazil.
Two years ago, Las Vegas Sands CEO and Chairman Sheldon Adelson met with then Brazilian President Michel Temer to pitch an $8 billion integrated resort. The gaming mogul visited the country again a year ago and made clear the purpose of that trip was to consider integrated resort investment opportunities. Adelson’s interest in Brazil dates back to at least 2015.
Maddox, Pariente and Omori each discussed the need for Brazil’s casino gaming market to be regulated with operators considering what is best for the country and its long-term economic prosperity.
Hardrock’s Pariente said that if Brazil liberalizes its view on casinos, the country should follow a model similar to that of Las Vegas where properties combine gaming with high-end dining options and glitzy concerts and shows.
Brazilian President Jair Bolsonaro, often referred to as the “Trump of the Tropics,” appeared strongly opposed to gambling on the campaign trail last year, but that stance appears to have softened. Earlier this year, Bolsonaro, who won an October 2018 election, made comments indicating Brazil’s congress should decide the fate of casino gaming in Brazil.
“If it (gambling) has to stop being a contravention or not should be decided by the Chamber of Deputies and the Senate,” he said live on Facebook in April.
The issue may not be Bolsonaro’s view on gambling as much as it will be whether or not Brazil’s congress can consider the issue in the near-term. Currently, Brazilian policymakers are reviewing legislation to reform the country’s pension system, which was one of the centerpieces of Bolsonaro’s 2018 campaign.
Shoring up Brazilian pensions is seen as integral to Bolsonaro’s efforts to trim the country’s debt burden and spark the economy there. The country’s lower house could take up the pension bill next month before it goes on summer break.