Gaming in Brazil

Brazil is a country with 210 million people, the 6th largest population in the world. In 2003, there were over 1,200 “Bingos” (slot parlors) in the country generating ~ $800 million of GGR; gaming was then outlawed in an effort to eliminate criminal involvement.

Both houses of Brazil’s Congress, the Senate and the Chamber of Deputies (“COD”), proposed bills legalizing gaming to generate economic growth, jobs and tax revenues. Published analyst estimates for Brazil Gaming GGR range from $9B to $17B; Brazil would be the third largest gaming jurisdiction in the world after the US and Macau. The bills proposed a massive legalization of gaming to include Integrated Resorts, Slot Parlors, Routes, Lotteries, Sports Betting, Internet Gaming and legalization of the currently popular and illegal Jogo de Bicho.

Based on our discussions with government officials, lawyers, lobbyists and industry participants, it appears that legalization will occur in a step fashion to enable regulation to keep up with legalization. Our assessment is that the sequence will be lottery privatization, sports betting, large-scale casinos, internet gaming and then slot parlors (bingos) and others.

3/16/2020 Update:

Sports Betting
  • Online sports betting market is estimated to be a ~$1B market
  • Land-based and online sports betting was officially legalized on December 13, 2018 (PM) 846/2018 authorizing the Ministry of Economy to oversee both land-based and online fixed odds sports betting
  • The Ministry of Economy is within a two-year regulatory period during which it seeks to establish the framework for sports betting 
  • The Government will also determine which branch of government will be responsible for collecting unclaimed gambling winnings as well as the criminal penalties for operators who handle wagers without licensure and those involved in match-fixing
  • A third draft of regulation will be made public for public consultation, available until the March 6th focused on a concession scheme
  • In the new draft, the government will adopt a concession model whereby 30 operators will enter a competitive bidding process for licenses
  • The government didn’t include authorization fees, monthly fees or taxes on games
  • Aumara Feu will take over as SECAP Secretary from today March 2nd and a final draft of the regulation is now expected in the third quarter of 2020
Gaming
  • Gaming bill was introduced by Federal Deputy Paulo Azi (PL 530/2019), which provides for legalization of integrated casino resorts in 32 locations throughout the country (Brazil has 27 individual states)
    • The bill has been merged with bill 442/2019 of the Chamber of Deputies
    • 10% tax rate on gross gaming revenue for a 30 years license, with the following specifications:
      • One casino resort per state with a population of 15M
      • Two casinos per state with a population of 15M-25M
      • Three casinos per state with a population greater than 25M
    • Discussions are expected to continue during the first half of 2020

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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