VIE 29 DE MARZO DE 2024 - 04:56hs.
Strong lobby to approve only casinos

A more or less restrictive gaming law in Brazil divides investors

To invest billions of dollars in Brazil, the Las Vegas Sands (LVS) group advocates restrictive gambling legislation in the country. This is also the preferred model of the Chamber’s president, Rodrigo Maia (DEM-RJ), according to interlocutors. But this option finds resistance from diverse interests represented, above all, among the deputies themselves.

A more or less restrictive gaming law in Brazil divides investors

Models such as Marina Bay Sands in Singapore are Rodrigo Maia's favorites, but there is still no consensus in the Chamber of Deputies

Models such as Marina Bay Sands in Singapore are Rodrigo Maia's favorites, but there is still no consensus in the Chamber of Deputies

Ready to invest billions of dollars in Brazil, the Las Vegas Sands (LVS) group advocates restrictive gambling legislation in the country. LVS owns some of the largest integrated resorts in the world, gigantic venues that integrates luxury hotels with casinos, convention centers, restaurants, shopping malls and leisure areas.

This is also the preferred model of Chamber’s president, Rodrigo Maia (DEM-RJ), according to interlocutors. But this option finds resistance from diverse interests represented, above all, among the deputies themselves.

"We support a limited and strictly regulated environment for gaming, similar to those in the jurisdictions in which we operate," said Andy Abboud, senior vice president of government relations for the Las Vegas Sands Corporation. "Brazil should exploit and adopt the high regulatory standards of Las Vegas, Pennsylvania, Macau and Singapore."

Singapore, by the way, is an example of success for LVS. The group invested US$6 billion in a single venture in the country, a city-state of 5.6 million people in Southeast Asia. With 2,500 rooms, Marina Bay Sands is housed in a complex of three 58-story towers, joined by a rooftop Skypark that simulates a gigantic open-air yacht.

According to the LVS, the venture generates US$ 1.5 billion annually in taxes to the local government and has about 10,000 employees. The number of tourists in the country increased from 9 million in 2010 to 16.5 million in 2017, with Marina Bay and another integrated resort already in operation.

A more liberal legislation would hinder the running of ventures like this, which need a concentrated market to be profitable - even though the LVS does not say so openly. Abboud states that "all gaming options, be it bingo, jogo do bicho, or any other form of gaming, should be subjected to the same standards as any other integrated resort the company would require. That said, Las Vegas Sands does not believe in the dilution of the market. Brazil should move slowly, using the regulatory framework of the mentioned locations and seeing if it is appropriate to expand the market over time."

LAV says it is ready to immediately invest in the country an amount similar to that invested in Singapore after gaming is legalized. The group also does not say openly, but Rio de Janeiro is the favorite to receive the venture, for its tourist vocation and its large population.

"A key component of this [investment] model is the ability to host trade shows and events, so the region where Las Vegas Sands could invest needs a sufficient population to accommodate that kind of business," said Abboud.

Also with foreign companies interested in investing in the country, the gaming industry defends an almost unrestricted market for this type of activity. "We advocate a licensing scheme that covers the full range of online products - sports betting, videocassins and video poker - and a GGR-based taxation," said Pierre Tournier, director of government relations of the London-based Remote Gambling Association (RGA).

Based on a study commissioned by the RGA to consultancy KPMG, Tournier says that the potential market for online gaming in Brazil is R$ 7 billion (US$ 2.15 billion) annually. Concerning the risks of such activity being used for money laundering, he says that "one of the most compelling arguments in favor of gaming regulation is that appropriate safeguards can be established to prevent criminal activity."

Companies in Argentina, where the activity is already legalized, are also eyeing the opening of the Brazilian market. However, according to lobbyists linked to these groups, they place some of the hopes on the regulation of gaming in an action that runs in the Federal Supreme Court (STF).

The process in question aims to give general repercussion to a decision of the Rio Grande do Sul State Court, which no longer considers gambling to be a crime. The case even went to the Supreme Court last year, but the session was adjourned after a point raised by Minister Luiz Fux.

There is no set date for the trial to resume. But if ministers decide on the general repercussion, the regulation of gaming in Brazil will occur, in practice, through Justice, not Congress.

Olavo da Silveira, president of the Brazilian Association of Bingo, Casinos and Similar (Abrabincs), says that gaming moves, on average, from 1% to 3% of GDP in the countries where they operate. "With 1%, in Brazil, we would have R$ 60 billion (US$18.5 bn) in bettings," he calculates. "With a 30% tax, they would generate taxes of around R$ 18 billion (US$5.5 bn)."

According to his forecast, between 130 and 140 thousand direct jobs could be generated in casinos. And with the legalization of people who operate as a sales point of the local popular jogo do bicho, 300,000 or 400,000 would go into formal employment.

Source: GMB/ Valor Econômico