Gaming in Brazil

OVERVIEW

Brazil is a highly attractive and untapped gaming market

  • Better known as the sleeping giant of the gaming world, Brazil hosts a population of over 213 million people, making it the 6th largest country globally
  • We estimate casinos could generate between $9B to $17B of GGR under the current proposed legislation, which means Brazil would generate more GGR than every jurisdiction except the US and Macau
  • Due to stalled efforts of gaming expansion in Japan, Brazil may be the most fertile ground for large scale gaming developers, investors, and operators
  • After more than five decades of gaming prohibition, increasing momentum around the need for expanded regulatory framework has never been stronger in the National Congress

UPDATE – 01/13/2022

Sports Betting regulations are being written ahead of Qatar World Cup in November 2022

  • Regulation could be introduced in the 2H 2022, which will allow for 30 licenses with the following guidelines:
    • One-time fee of R$3M for a 9-year license
    • Monthly payments of R$20K for a retail license, R$3K for an online license and R$45K for a dual license
    • Mandatory reserve set at R$6M
    • There will be a gaming tax on GGR to be determined

Privatization of National Lottery was mooted by Supreme Court decision to end the federal monopoly, opening significant expansion opportunities for the States

  • Lottery operators and suppliers (incumbents and new entrants) will be able to offer their platforms and services directly to the States
  • Some states initiated market studies and business plans to implement lottery operations including: Sao Paulo, the Federal District, Maranhao, Parana, Tocantins and Amazonas
  • State run lottery operations are expected to commence in 1H 2022

Gaming attracted the attention of the three Powers (Senate, Chamber of Deputies and Supreme Court). There are currently two live gaming bills from the Senate and Chamber of Deputies. The Chamber of Deputies approved an “Urgency Requirement” to vote on a Gaming Regulatory Framework, tentatively scheduled for April 7, 2022. At the same time the Supreme Court is expected to adjudicate a State led appeal to repeal the Federal prohibition of gaming (similar to the repeal of federal lottery monopoly). We expect the confluence of these events, could ultimately spur the legalization of gaming.

Bill 186/2014 (Senate Bill) proposes the following:

  • Casinos will occupy 10% of IR area
  • 1 IR per state (26 states & Federal District)
  • Operator of each state selected through bidding process
  • Bid selection based on scoring system: 70% worth of points for the quality of the bid and 30% based on the value operator will pay to the government
  • 35-year concession
  • 10 years after the winner of the bid signing the first concession, the federal government will allow a second resort in the same state
  • 80% of the employees must be from the state of the IR location
  • Operators must implement player protection and AML measures
  • 5% GGR tax allocated to responsible gaming

Bill 442/91 (Chamber of Deputies Bill) proposes the following:

  • Regulates all types of gaming in Brazil including casinos, bingo, sports betting, jogo de bicho, slot machines and horse racing
  • Establishes the creation of SINAJ – National Gaming System, comprising a federal regulatory and supervisory body, operating entities, betting agents, turf entities and accounting and operational authorship companies
  • Establishes the creation of a “National Policy for the Protection of Players and Bettors” as well as the implementation of the National Register of Players and Bettors and criteria for the prevention of money laundering
  • Establishes the CIDE-Games Contribution for Intervention in the Economic Domain, 25% GGR tax for online gaming, 20% on land-based gaming; these amounts will be divided between the Union, States and Municipalities, as well as SINAJ
  • Establishes rules to identify and prohibit compulsive gamblers’ access called RENAPRO (National Register of Prohibited)
  • Establishes requirements to operate Jogo do Bicho: licenses will be awarded through a bidding process based on the largest capital investment and highest up-front fee proposed, with a minimum up-front payment of R$ 10M ($1.75M US) and for a fixed period of 20 years, renewable for an equal period.

Spectrum Gaming Capital released a report on Attracting Investment to a New Brazil Gaming Industry

Please click to access the reports in both English and Portuguese versions

 

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