GMB - What do you expect from BgC edition this year?
Jan Jones Blackhurst - It would be helpful for BgC to provide a platform for members of the Brazilian Government and Members of Parliament to provide the industry an indication of its economic and social policy goals related to gaming liberalization, with an eye toward developing consensus on legislation that has the best prospects for passage. I also hope Governors and Ministers from states that have a strong interest in expanding their tourism industry will be available to discuss the economic opportunities that integrated casino resorts can bring to state and local economies.
How would you show participants of the BgC and society in general the importance of having a gaming industry?
Legalized gaming and integrated resorts specifically have had a positive economic impact in the U.S. as well as in other countries. In the US the state of Nevada alone, during fiscal year 2016 $1.4 billion in taxes and fees were paid by Nevada hotel-casino operators. Casino and hotel revenue accounts for 42% of the State General Fund Revenues. Caesars 37 North American properties have paid $1.559 billion to Governments in local, state, and federal taxes and licenses. In addition Caesars has over 70,000 employees in the U.S.; jobs in the casino resort industry are well-paid and the industry typically provides training and education to potential employees when entering new markets.
In previous interviews with GMB, you spoke about the investments Caesars intends to make in Brazil when the sector is regulated. How has this topic been discussed on the board of Caesars Entertainment?
Caesars remains interested in investing in Brazil. Not knowing whether the Parliament will pass a law legalizing gaming and not knowing the requirements of the law has caused concern within the industry, including Caesars. Until gaming is legalized and unless there is a strong regulatory framework in my experience integrated-casino resorts like Caesars will not initiate investments.
After visiting Brazil in order to understand the direction that a legislation for the gaming industry was taking, what evaluation do you make today of the stage of the discussions?
We have been following the legislative process in the Senate and in the Chamber and had been hopeful that the legislation would pass the Senate. The vote in CCJ has made it more difficult to understand the path forward. We will be watching the Chamber’s activities closely to see whether a Tourism Bill with a casino amendment will have sufficient support for its passage.
Major international casino groups with integrated resorts, like Caesars, are talking about billions of dollars worth of investments. How do you rate the role of the gaming industry in Brazil? And how many resorts with casinos would be an ideal number for the country from what you already know about the country?
We believe that creating a well-regulated legal gaming industry could benefit Brazil in many ways including job creation, training and skills development and new attractions for international tourists. With 26 states varying in size, population and tourism sectors it is difficult to predict the best balance for the country—that is best left to Brazil’s elected leaders. That said, the proposed 32 license maximum would provide sufficient economic opportunities both for States and integrated resorts.
Understading that it is reserved information, what can you tell us about if Caesars has already decided on the value of the future investment to be made in Brazil? Which states would be targeted by the Group?
While we have discussed future investments in Brazil putting a value to the potential investment is not possible at this time considering that Brazil has yet to legalize gaming. Legislative and regulatory decisions related to tax rates, regional and national competition, and infrastructure requirements will play important roles in determining appropriate levels of capital investment.
From your experience in dealing with government agents in countries with recent regulations, how do you see the current stage of discussions on casino regulation in Brazil?
The discussions on casino regulation in Brazil have had some setbacks. While the process of legalization is challenging, other countries in which Caesars has been involved have led a more efficient process to legalize gaming. There are always setbacks but we hope that Brazil can find its way to passing legislation that would legalize gaming and establish a strong regulatory framework.
How long do you think Brazil will have a consistent law that gives security to groups like Caesars to invest in the country?
Rule of law and strong protections for investors are key considerations for Caesars when we consider investing in a country. It is essential to have strong regulations adopted to protect both the country and its citizens as well as the companies. Caesars advocates for strict licensing and probity regulations for example, to prevent money laundering and other illegal activities that result from poorly-regulated gaming. As Caesars assesses its potential investment in Brazil it will review the legislative framework adopted to legalize gaming, the implementing legislation, and the regulatory agency established or assigned to regulate casinos.
Source: Exclusive GMB
