Lawyer Pedro Cortés, of Macau-based law firm Rato, Ling, Lei & Cortés, spoke to GMB during recent edition of G2E in Las Vegas about the current moment in the global gaming industry, highlighting the growth of sports betting, the resumption of land-based casinos and the importance of Brazil legalizing the activity.
GMB – How do you see the global gaming market, especially in the area of sports betting?
Pedro Cortés - Covid-19 has greatly changed the dynamics of the gaming industry and people play much more online today than they bet in 2019. We have seen in the United States, for example, a huge growth in sports betting in several states, as well as online casinos. Gross revenue from U.S. commercial casinos reached USD 53 billion, noting that they also already have their online operations. If there's one thing good that covid has brought, it's the way people bet, increasing the digital presence.
The problem is still the illegal market, very large and much larger than the regulated. In the United States more states are legalizing sports betting, as well as in Europe. In Asia there are many illegal markets, although the region is seeking legalization, as in the Philippines and Singapore. But we are still light years away from what could be the regulated market. It is always easy for illegal operators to continue operating very competitively as they pay no taxes.
That is, we must fight more and more that sector that appropriates a regulated business!
I think so, yes. It must be one of the top priorities of governments and also of legalised bookmakers, who are the most interested in sustainably growing the market and that grey area disappears. There is still a lot of work on the part of the states to combat this, which is done effectively, focused and resourcefully. Unfortunately, this is not the priority of governments.
It never is!
It's one of the last priorities. They allocate resources for numerous other actions. But they should look at this, because there are other important aspects, such as the issue of the development of sport and the fight against the manipulation of results. Everything is very connected, because when we talk about the betting market, the topic of manipulation is always on the radar, since this happens in various regions, such as Asia, Brazil, Argentina and even the United States. This has to be combative and that is what the authorities should look at, together with the sport itself and the serious gaming industry.
Does the land-based market is also going through a positive time around the world?
The land-based market has grown, although many people think the online would take up terrestrial space. It did and competes, but the online ends up being channeled to the land-based. We have seen a very large development in several jurisdictions, not only in the United States. There is much talk of the opening in Taiwan and Japan the subject has been addressed for a long time. But we should look at the activity as a whole, as is the case of Las Vegas, where gaming is just one of the components of everything that is offered by the jurisdiction. It is a pity that in Portugal, for example, this possibility was not identified for the model to be changed and where we see the search for a few licenses, as in Estoril and Figueira da Foz.
And Macau, which had a consolidated market until very recently, and is now remodeling, with a bid underway?
If there is still a market in Macau. We are in the middle of a bidding process, as you said, and that part of the offers has already been closed. Now, the government is considering proposals to proceed with the event. The region still has a lot to do to make the activity profitable. But I understand that it would be very important for Macau to shift the focus of play to non-gambling activities. The region is still suffering the effects of the pandemic. You can already go there, but you will have to be quarantined for a week, which greatly costs the trip. Of the 40 million visitors we had in 2019, it fell to 5 million in 2020 and last year we reached 7 million. We still don't know what it's going to be like in 2022, but as the restrictions, it shouldn't grow much.
We are talking about the world gaming market, with specific characteristics of the United States, Macau and Portugal. But we have the example of Brazil, which promises to be one of the largest in the world, both land-based and online. What assessment do you make of the country?
First, I'm going to correct it. It could be one of the biggest markets, no. It is already one of the best markets in the world, although not regulated. It is possible to go to bingos and clandestine casinos and there is still the traditional jogo do bicho. That is, this postponement that always occurs is not good for Brazil. It's always said that it's going to happen, but what I usually say is that it should be regulated and a bad law is better than no law. And the same is true of sports betting, the regulation of which is ready to be edited and should be launched by December. I know the country is in the middle of an election process, and it gets in the way a little bit. What I'm sure is that the establishments in operation do not contribute taxes.
As long as the government doesn't regulate, it doesn't collect. And it cannot deny that gaming does not exist, because everyone knows where it happens and I myself have had the opportunity to visit establishments. The question remains: are we going to continue with the same story as the activity being a crime? This needs to end and I think the government should legalize all activities and improve it with the start of regulated operations. The activity exists and does not contribute to society. When legalizing, the market will debug itself and will be left only good operators.
The international market is an example. Brazil should follow the good example, is that right?
I think so, yes. There are several examples and Brazil, as being one of the last major markets to organize for gaming, can learn from various jurisdictions. As I said and it is almost a certainty – although there are many states with different realities – if Brazil looks at regulated countries such as the United States, Macau and several countries in Europe, that is, in jurisdictions where the sector is already consolidated, it can analyze the best and the worst and see the best experiences to make a law that is appropriate. It is not enough to copy, because in terms of legislation, it is important to apply to the local reality. Every jurisdiction is a jurisdiction, but I think that's the way and gaming is one of the ways to attract tourists to a particular jurisdiction. And I say itagain: it's better to have a bad law than not having a law.
Source: Exclusive GMB
