QUA 24 DE ABRIL DE 2019 - 03:20hs.
Federico Lannes, international consultant

"Brazil will be the next big gaming market"

In a column written for the Spanish website Sectorgambling, the international gaming consultant Federico Lannes offers an interesting insight into the Brazilian market potential. 'It is estimated that it may represent US$ 17 billion. There is a historic opportunity to make legal and accepted activity in almost every country on earth,' says Lannes.

Brazil is discovering its potential, based on the interest aroused by the bills presented in the Senate and in the Chamber of Deputies, which has generated a very rich debate that allows to see clearly the potential of the Brazilian market. Let's see the situation in the country:

Gaming has been banned since the 40s, that is, more than 70 years ago.

Horse racing bets, lotteries operated by the state (lotex) and poker are the only legal gambling in Brazil. Bingo was legalized in the 1990s but was banned again in 2007.

It is estimated that the Brazilian betting market can represent USD 17 billion.

Only the illegal gaming that moves approximately USD 3.50 billion per year, betting on some of the 25 jogos do bicho lottery, which is very popular in all social classes.

It is estimated that Brazilians spend approximately US$ 950 million annually on igaming.

It is a country with 207 million inhabitants that ended 2017 with 236.5 million cell phones, of which 62% is prepaid.

92% of Brazilians with Internet access are connected by mobile phones, while only 54% of households have an Internet connection.

The Brazilian public is interested in the game?

There are numerous surveys, both private and launched by the government and also the legistlative power, that show an unusual interest of Brazilians to the long awaited opening of gaming.

A popular local news program, JD1 Notícias, published a survey conducted by Paraná Pesquisas in Brazil. The public poll, which sought to determine how many people were in favor of the legalization of the activity, threw a technical tie: 45.7% of Brazilians supported the regulation of casinos, while 45.5% of those consulted manifested against.

There has been a public going abroad for years to bet. Weekly private charters are hired to transfer VIP players to Punta del Este (Uruguay) from San Pablo or Rio de Janeiro. In this destination the VIP gaming represents 75% of the total amount.

There are also those who come to the border with Argentina, in Puerto Iguazú, to bet on casinos. Las Vegas and Macau are other destinations chosen by Brazilians, who are important as a gambling group for the money they move.

What would happen then with all the casinos whose high rollers are Brazilian if the activity is legalized? It would probably give new opportunities to main cities of Brazil, which will undoubtedly have an impact abroad. Everything will depend on how attractive the new investments in hotel-casinos are.

Who is in favor and against gaming in Brazil?

The legalization of the activity is defended by governors and intendants who consider this activity as a source of collection and employment generation in the face of the current economic crisis.

The likely destinations for the collection from gaming will be public safety, health and education. Brazil is having serious problems in some cities like Rio de Janeiro, which forced President Temer to intervene with the army many of the most dangerous areas. Public hospitals are collapsed and require a larger operating budget. The same happens in education.

But not everyone is in favor. "There is a social and religious factor that affects opinions against the legalization of gaming." The parliamentary front "Brazil without games of chance" does not believe in the economic impact that the activity will bring. Paradoxically, however, illegal gambling exists and Brazil loses in collecting for state coffers, and workers are without social security coverage being exploited in most cases.

For that reason, in front of these arguments we have to look at the success cases as in Las Vegas, where gaming is only 35% of the total income received by the city.

The chance of Brazil

Brazil has a historic opportunity to make transparent an activity that is legal, and accepted in almost all countries of the earth, and help taxes by solving some of the structural problems such as employment, health and safety.

This will only be possible if the legislators are able to understand that this type of opportunity will only materialize with a political consensus, leaving aside religious prejudices or party issues to give place to the economic and social development of the country.

Source: GMB / Sectorgambling