Alfredo Lazcano is a general member for Mexico of the International Masters of Gaming Law (IMGL), affiliated member of the Association of Gaming Equipment Manufacturers (AGEM) and legal adviser of the AGEM Mexico Committee. Since 2001 he is a partner of Lazcano Sámano, S.C.
GMB - In the last BOFCON of London, during your talk, you described Brazil as a "sleeping giant" ... can you extend that concept?
Alfredo Lazcano - In my opinion, Brazil is a sleeping giant because it is the largest market in Latin America where gaming is not legalized. Currently, there are approximately 640 million Latin Americans and 200 million Brazilians, so practically one in three people living in this important region of the world are in Brazil. For this reason, Brazil is probably one of the markets with the highest expectations in the eyes of the international gaming industry.
How many years ago is Brazil compared to the most advanced countries in terms of legalized gambling?
Gambling has been banned in Brazil since the middle of the last century, and that mood of censorship took on a boom with the closure of multiple gambling establishments that occurred about a decade ago, following corruption scandals that reached the highest levels.
Despite the prohibition, over the years this market has had a particular maturation process that makes it very interesting for large transnational gaming companies, because Brazilians have always found the way to play either in legalized activities or tolerated, as in other types of games whose legality has been questioned or that lack a specific regulation.
In other words, Brazil has had everything and for everybody: state lotteries, TV draws, bingos and the popular Jogo do Bicho, to cite only a few examples. Based on the above, I would dare to say that Brazil could have a delay of ten years or even more in its legal framework, but this is irrelevant for most international observers.
What really matters from the commercial point of view is that Brazil is a relatively mature market, because gaming is immersed in its culture, which is also true of other countries in Latin America.
Do you have approximate billing numbers that Brazil is losing without legalization?
I do not have precise information on this specific point, but I have heard many figures. Most of the estimates seem to me to be exaggerated or unsupported, so it is difficult to give an opinion on this without having a thorough, but above all impartial, economic study. Either way, the estimates are impressive. The most reliable sources argue that illegal gambling could amount to close to US$ 10 billion a year. That's a lot of money, which means a lot of interests.
What is the opinion of the world when they look at this closed market?
In my opinion and experience, a closed market means huge local economic interests that benefit from an environment, sometimes opaque and without clear rules, which restricts free competition and entry of foreign investors. Many countries in Latin America refuse to establish strict regulatory frameworks according to international standards because their old laws tend only to benefit local power groups such as public or private monopolies and even criminal organizations operating illegal gambling.
Unfortunately, this is the reality that exists in countries like Mexico, Brazil, Colombia and many others where there are openly practiced countless games of chance, but unfortunately, they are jurisdictions that often resist updating their laws based on the requirements and progress of the 21st century.
You have many important companies as clients ... do they ask about Brazil? What do you suggest?
Indeed, our firm advises and represents several leading technology companies in our industry, which hold a wide spectrum of gaming licenses in jurisdictions with the strictest regulations in the world.
Precisely to safeguard these licenses and protect our clients, we suggest that they always seek to have a local vision. This means that they must first study and understand the inherent characteristics of each jurisdiction, which can only be achieved by hiring reliable local people, and that enjoys an unblemished reputation.
When we talk about Latin America, we mistakenly think that all countries are the same. In this case, Brazil has specific and highly defined characteristics in its economy, in its degree of openness to the world, in all the variables that influence its politics, in the muscle of its local companies, as well as in its great capacity for development. Brazil is a unique market with a lot of
Which are the businesses that could have more success in the Brazilian market?
I have no doubt that, once gaming is legalized, all business would be successful. From mega-resorts with luxurious hotel-casinos with Las Vegas or Macau style; traditional games such as lotteries, draws, bingo, and of course games based on the latest technologies for young generations, such us online casinos and sports
What do you think that slows down the progress of regulation in this country?
Historically, progress could have slowed down because the system has tended to protect local interests, such as draws and lottery monopolies, and popular or street games that operate in a gray environment, taking advantage of the lack of regulation.
Currently, we know that there is a strong interest in implementing the legalization of the activity through not one, but several channels, for example, two bills, a possible presidential initiative, Caixa's opportunity, and even a constitutional procedure before the Supreme Court against the prohibition. In spite of all of the above, the current political environment and the multiple corruption scandals have been weakening the spirit of legalizing and ordering gambling in Brazil.
Should Brazilian football clubs also move in order to create a law? Are they losing a big deal?
Yes, clubs, leagues, and other sports groups have a big business potential with the gigantic industry that has emerged between gambling, sports, and entertainment, which has no borders and is constantly evolving and growing along with the media mass communications, including of course television broadcasts, cellular telephony, and the Internet.
What is the current situation of soccer and sports betting industry? And how is Latin America compared with other international markets?
A recent study by Google argues that sports are the most growing gambling trend on the Internet and that the cell phone is the number one access device for participants in these activities.
Being football one of the most popular sports not only in Brazil, but throughout the world, those Latin American countries that today lack an updated regulation on sports betting online, logically are losing competitiveness and billions of dollars in taxes that evade to offshore companies in tax havens, but above all, they are fomenting the growth of illegality.
Source: Exclusive GMB
