Gaming in Brazil

09/01/2021 Update:

Brazil is an attractive and untapped gaming market

  • Massive population of 210 million people making it the 6th largest population 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 gaming developers, investors and operators

Sports Betting has been legalized and regulations are being written

  • Sports betting was legalized federally on December 13, 2018 and the Ministry of Economy is progressing to write regulations within the allotted two-year time frame (which can be extended for up to an additional two years)
  • Brazilian President Jair Bolsonaro formally added sports betting to
    the country’s agenda in August 2020, signing a decree to add sports wagering to Brazil’s Investment Partnership Program (PPI) portfolio and national privatization program and appointing managers to lead the licensing process; this positions sports betting as priority for the country.
  • President Jair Bolsonaro, on July 15th, approved Provisional measure 1034/21 signing as law 14,183. Amongst its numerous amendments, the federal government approved changes which will see the country implement a tax system based on gross
    gaming revenue (GGR), rather than turnover.
  • We expect a concession model, but number of licenses are not yet
    defined; we estimate regulation to be introduced on the second half of 2022;

Casinos

  • Several gaming bills have been introduced calling for the legalization of different gaming modalities in Brazil but last month, the Executive Committee of Brazil’s Federal Senate has selected Veneziano Vital do Rêgo as the Plenary Rapporteur for Bill 4.495/2020 calling for the legalization of Integrated resorts where casinos will occupy 10% of its area.
  • This appointment will help to fast track the bill with the following specifications:
    • 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;
    • 10years after the winner of the bid signing the 1st 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
    • Contribution for Intervention in the Domain will be set up which collect 5% gaming revenue from the resorts
  • the arrival of integrated resorts, as proposed in his bill, has the potential to attract R$ 44 billion to the country, will allow the construction of 70 thousand popular houses, can generate 161,000 jobs and double the number of foreign tourists in five years from 6 million (today) to 12 million.

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

  • The Federal Supreme Court (STF) unanimously decided to end the federal government’s monopoly for operating lotteries in Brazil, which allows state lotteries to operate their own
  • Lottery operators and suppliers will be able to offer their platforms and services directly to the states and current operators can extend their offerings 
  • The IGT/SGMS consortium that was awarded the federal instant ticket concession announced its withdrawal due to delays on the part of CAIXA Economica to execute a contract by the concession deadline

The Spectrum Gaming team includes consultants and investment bankers, including on the ground in Brazil, dedicated to providing 360 degrees of services to developers, investors, operators, government agencies and other stakeholders.

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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