The delay in releasing casinos is not conditioned by moral, penal, or public health debates. The background discussion is related to the economic paradigm to be adopted and to the developmental or liberal assumptions that would guide the proposal.
The choice of the model ends conflicts of interest between agents and has a direct impact on the cost of investing capital.
The legalization of casinos tends to move the civil construction industry, demand qualified labor, and promote tourism in regions where they are installed. The main challenge is to define which regions these would be; and this challenge is multifaceted.
In advance, I say that we should not aspire to the geography of Las Vegas. Like Silicon Valley, it is a unique place, it is part of the history of the development and rise of the United States, and it simply cannot be replicated. The main classes that come from there are techniques, management, and commerce, and they have boosted, for example, the consolidation of the Asian gambling capital, Macau.
The regulatory issue of origin involves whether the State will point out the regions that are allowed to install casinos (developmental model) or whether it will attribute the decision exclusively to investors (liberal model). It is reasonable to expect the emergence of a mixed solution in the country.
Illustratively, a few years ago a senator from Minas Gerais argued that due to the criteria being negotiated in Congress, which would give exclusivity to sites in the north and northeast, some of the most famous casinos in the country, originally installed in Minas Gerais, would be prevented from reestablishing themselves. Obviously, he opposed the terms of the referral.
There are many arguments articulated by the various interested parties, which also resonate in the discussion about the pertinence of possible bidding for the grants (concessions, permissions, or other administrative equivalent) or simple accreditation (fulfilled requirements, an authorization) for the exploration of the business, as well as about the number of tolerable ventures.
The geographic issue is also related to the expectations of the Federal Government, States and municipalities and the apportionment of taxes to finance public and social causes. The dispute is fierce in other sectors and here it is also.
The last aspect about geography, which I believe to be the most obvious and important: we are in 2021, they have already invented the Internet and we use it truthfully. The adoption of a regulatory model that artificially blocks the main enabling technology of our time or ignores it is bound to fail.
It is not credible any economic modeling that simulates the exclusivity of the provision of services by land-based casinos and that assigns the State the responsibility for protecting them from competition with online games; one-year safeguard is not defensible, reserve is not defensible for decades.
The release cannot be based on the ban on digital games, under penalty of the State being obliged to indemnify investors in the near future, for failing to prevent the performance of agents in the virtual environment. The damage to the casino investor and federative entities would be enormous.
It is understandable that other countries that already hosted casinos prior to the success of the Internet are struggling to find the sustainable balance for competition between traditional houses (brick and mortar) and new entrants online.
Brazil, however, has the advantage of accessing the market with this technological scenario already consolidated; we cannot import backward regulatory models that will initially reduce competition and innovation, out of step with consumer preference and disconnected from reality.
In the USA and Europe, comparative method research is being used to mature gambling regulation, including governance and control, based on analogies with other highly regulated industries, such as financial markets and food security.
Concepts of public finance, competition, and the Internet, handled by hybrid structures of technocratic, political, and market-oriented management, will be fundamental to the development of a legitimate regulatory Brazilian berry for casinos and what else is out there.
Sérgio Garcia Alves
Master in Law & Technology from the University of California, Berkeley and Master in Regulation from the University of Brasilia. Partner at Abdala Advogados
