They are already eyeing the chance to open casinos in paradisiacal locations and are looking to build their brands in the country. Executives of these companies say that Brazil followed a process that is opposite to that seen in the rest of the world: it legalized betting before having the land-based betting market organized under state rules.
Alongside the approval of online betting, Congress has resumed discussions on bill no. 2,234 of 2022, which regulates the jogo do bicho, horse racing, and casinos. This is the Senate's version of bill no. 442, passed by the House of Representatives in February 2022 after being in process since 1991.
Caesars Palace already holds a Loterj license to operate bets in Rio, is currently building its headquarters in Americana, in the interior of São Paulo, and is hiring. The company already has 28 employees on direct contracts, with projections to reach 100.
The casino's portal aims to differentiate itself by offering exclusive games and requiring a high minimum deposit — "it should be around R$ 1,000," says the company's advisor in Brazil, Paulo Morais, best known for founding the beauty franchise Espaço Laser.
Big Brazil, which represents Caesars Palace in the country, has a capital of R$ 36 million (US$ 6.6m), of which R$ 30 million (US$ 5.5m) will go to Finance, and R$ 5 million (US$ 1.1m) will remain in a government-mandated guarantee fund. "For us, physical gambling, if it is regulated in Brazil, is a natural path we will pursue to apply for a license as well," says Caesars Sportsbook Brazil president André Feldman.
Feldman has been following the debate on betting regulation in the country since 1996, when he became involved with the World Series of Poker and has represented the American casino since 2019, shortly after the online betting was legalized under President Michel Temer’s administration in December 2018.
Alex Pariente, vice president of Hard Rock Cafe for Latin America, who has already had meetings with Finance, says he expects a stabilization in Brazil’s legal framework before announcing any plans. "We are evaluating all the possibilities in the market. It would be gratifying to bring our brand into this sector when the opportunity arises."
The company’s priority, however, is land-based gambling. "The Brazilian market has always been very important to Hard Rock International; the country contributes significantly to the number of tourists who visit our properties in the U.S. and other parts of the world."
MGM Resorts has already invested R$ 54.25 million (US$ 10m) in the project it will launch with Grupo Globo, BetMGM. In a post on LinkedIn, the group’s CEO, Bill Hornbuckle, wrote that the company intends to bring the "authentic Las Vegas betting experience to Brazil."
Regulation of ‘Bets’ in Brazil
The rapporteur of the bill expected to legalize casinos, Senator Irajá Abreu (PSD-TO), told Folha that the discussion about bets should not hinder the progress of debates on the regularization of physical gambling. In his view, the proposal could be voted on in October, after the elections. "It is a mature text that has been under discussion for over 30 years."
After the text arrived at the Senate, senators replaced the term "built casino" with "installed casino." This change allows international resorts to seek already-established partners in Brazil to adapt hotels into casino-resorts, instead of building new enterprises from scratch.
Thus, multinationals would save time on licensing, reducing the start-up period from five years to less than a year, says the president of the Instituto Jogo Legal, Magnho José.
However, the measure raises concerns among addiction treatment experts as it increases the population’s exposure to gambling. According to psychiatrist Rodrigo Machado from the Gambling Outpatient Program at HC (Hospital das Clínicas), gambling, like drugs, varies in its addictive potential.
Lottery games, for instance, tend to be less addictive because the prize notification takes hours or days. "Slot machines, on the other hand, have a much shorter time between placing the bet and getting the result, leading to overstimulation of pleasure-processing pathways in the brain and generating, therefore, greater excitability."
According to him, the arguments for legalizing gambling go against health and scientific principles.
During a public hearing in the Senate on August 9, Abreu stated that he had ten technical opinions from ministries under the current administration, such as the Treasury and Tourism, in favor of legalizing casinos, the jogo do bicho, and bingo. "Once approved, the project will be a major turning point for Brazilian tourism," Abreu said at the time.
Carlos Henrique Sobral, the National Secretary of Infrastructure, Credit, and Investments at the Ministry of Tourism, estimated that the law's approval would generate more than 650,000 jobs and increase the country’s revenue by R$ 74 billion (US$ 13.6bn).
"We will see an investment of R$ 66 billion (US$ 12bn), a more than 1,000% increase in tourism investment." Today, the sector represents 8% of Brazil's GDP — it would rise to 9.2%, according to Sobral's estimates. In a statement, the Tourism Ministry expressed its support for the legalization of casinos, with a forecasted investment of $1 billion (US$ 185m) per project.
Finance, however, considers the risks associated with the activity, such as money laundering and harm to the public economy. According to Régis Dudena, Secretary of Prizes and Bets at the Ministry of Finance, the solution is a text that ensures the possibility of responsible and technical regulation, based on data and evidence, and sufficient time for the activity to develop with effective rules, unlike what happened initially with online betting.
Although the project to legalize casinos has support from both Petistas and Bolsonaristas (the two most important political parties in the country, which are in opposition to each other), it still faces opposition in the Senate, led mainly by Senator Eduardo Girão (Novo).
Evangelical deputies, who lost in the voting on the bill in the House of Representatives during Jair Bolsonaro's government, have also participated in public hearings and brought forward people who reported debts of hundreds of thousands of reais.
The project
Casinos will need to be integrated into leisure complexes, such as buildings or vessels, and must meet the following requirements:
The proposal allows up to three casino-resorts per state, depending on the region’s population size or the territory’s extent.
Companies will need to be accredited by the Ministry of Finance to operate their casinos for a period of 30 years, with the possibility of renewal for the same duration.
The approval of the text would also legalize jogo do bicho and bingo.
Companies overview
MGM Resorts
Caesars Entertainment (Caesars Palace)
Hard Rock Cafe
Source: Folha
