Will 2025 be the year Brazil finally legalises land-based gambling?
After years of delays, Brazil launched its legal online betting sector on 1 January and the consensus seems to be that it’s poised to become a top-three global market. With well over BRL2 billion (£272.4 million/€326.1 million/$352.1 million) already paid in online licence fees, Brazil’s economy is set to benefit hugely from licensed digital gambling.
However, land-based gambling is facing similar delays to those that maligned Brazil’s journey to online regulation.
Despite the Brazil Justice and Citizenship Committee approving PL 2,234/2022 to legalise land-based casinos, bingo, jogo do bicho and betting on horse racing in June last year, the senate vote was postponed on numerous occasions.
Yet, the industry remains largely confident the land-based bill will finally be voted upon and approved this year, especially after the election of pro-gambling Davi Alcolumbre as senate president in February.
Alex Pariente, corporate senior vice president of casino and hotel operations at Hard Rock International, believes Alcolumbre’s appointment will help to finally get land-based legalisation over the line.
“Alcolumbre is not only a very experienced senator but is also very knowledgeable about the importance of legalising land-based entertainment,” Pariente explains. “So there’s good dialogue, there’s good collaboration. I think we have good sentiment towards advancing with this.”
Ari Celia, director at Brazil payments company Pay4Fun, isn’t so sure.
“The rumours are the government, the senate, is considering voting the bill that is sitting there in this first semester,” Celia says. “It’s politics. It may take longer. It may happen. We don’t know.”
Why is this attempt at land-based legalisation different?
Gambling was outlawed in Brazil in 1946. Although bingo was briefly legalised around the turn of the century, multiple attempts to pass land-based legislation have since failed.
With licensed online gambling now a reality, the industry believes brick-and-mortar betting should join digital wagering in the regulated sphere.
Hugo Baungartner, chief commercial officer of local operator Aposta Ganha, has been in the industry for 28 years and has observed numerous attempts to legalise land-based betting in Brazil come and go. However, he believes online regulation has brought a change in mindset in Brazil, one that will ultimately see land-based legalisation arrive in 2025.
“I think land-based regulation will come this year, because gaming is a reality in Brazil, number one,” Baungartner says.
“Number two, the mindset has changed since 2010, or 2000. People are different, people understand. People travel the world and they see everything. So I think the online regulation also will help politicians understand that the government has the powerful tools to control everything.”
The truth is, even without regulation, land-based gambling is happening in Brazil with jogo do bicho, a game of chance with a name that translates to “animal game”, hugely popular despite being banned in federal law since 1946.
“Jogo do bicho is over a hundred years old, so it would be very hypocritical to say that this is something that just erupted in the last decade or something like that,” Pariente continues. “It’s always better to regulate the industry than to just know the industry exists.
“There are no protections to the population because we don’t know who’s gambling, we have no control over currency movements or AML. We don’t even know who the customers are, but we know there’s an activity over there that is happening and the government cannot get a grip on it.”
Boosting tourism in Brazil
Beyond the enhanced player protection that regulation provides, land-based gambling could serve as a major boost for Brazil’s tourism industry.
Pariente notes “stagnation” in tourism in Brazil, which receives around six million tourists a year. In comparison, the Dominican Republic regularly breaks the 10 million barrier, despite its land mass fitting into Brazil approximately 175 times.
Even with the heavy investment stemming from major sporting events in Brazil over the past 11 years, including the football World Cup in 2014 and the Olympic Games in 2016, Pariente maintains the country is struggling to “even move the needle” in regards to foreign visitation.
Pariente says Hard Rock could help to move that tourism needle in Brazil, where it already has a number of cafes, as well as create jobs to further foster economic growth in the country.
“We are very keen on presenting an integrated resort as a bigger impact on the economy, because of the magnitude of the investment,” Pariente says.
“Building an integrated resort that could be a destination for tourists from the region and internationally could be very useful to pursue the government goal, which is to increase tourism. By the same token, with the job creation related to the sizeable investment of an integrated resort, you’re talking in the billions of dollars.”
Celia agrees land-based legalisation would provide Brazil’s economy, and particularly its tourism sector, with a welcome boost. “There are huge opportunities,” Celia says. “Brazil has many places like Rio de Janeiro, the rainforest up north, the beautiful beaches on the northeast of Brazil, they all can be improved with gaming.
“It’s a big economy thing and Brazil right now needs that. So I personally believe that it’s going to be a high-level discussion on tourism as well.”
The online effect
Will the discourse about online gaming boost land-based hopes? The second half of 2024 for Brazil’s soon-to-be regulated online sector was plagued by pressure from the public and politicians.
Such was the furore, a Supreme Federal Court hearing was held in November to determine whether the online betting laws were unconstitutional.
That decision is expected in the first half of this year, although few in the industry feel there’s a realistic chance of regulation being scrapped.
Brazil is somewhat of an outlier in regulating online betting before its land-based counterpart, with Pariente describing it as “building the roof before the foundations”. However, the negative discourse around the online sector and the regulation that came with it has quieted since the turn of the year. That appears to make land-based legalisation likely to happen although, in Brazil, nothing is certain.
Celia is confident, however, declaring: “To be very honest, I’m sick of this story, because it’s not true. Everybody knows there’s a small percentage, less than one per cent of the population, that’s subject to excessive gambling. But everybody else, they have the money, they know how to stop, they know how much they can bet.
“The good news is, since 1 January when the regulated market started, I talked to a lot of people. I have my feelings that this pressure has been lower and lower and I hope in three months, six months, it will disappear, because it doesn’t make sense. There’s no point in this kind of prejudice on gambling, in my opinion.”
Land-based potential for Brazil
The long delay between Brazil’s national congress first approving online betting legislation in 2018 and the final green light from the chamber of deputies in December 2023 led to a proliferation of betting sites as companies operated in the grey market. Player preferences have shifted towards online, so there is a question over just how profitable legal land-based gambling would be.
However, Pariente believes omnichannel provides an ideal solution to counter cannibalisation and any fears over not being able to entice Brazilians out of their homes to gamble.
“We have a lot of land-based operations in the US and what we’ve seen is that we were able to find an omnichannel solution for a guest,” Pariente says. “We find that customers didn’t stop coming to our land-based casinos. By offering this type of a mobile solution, we were able to keep the customers within the brand.
“I don’t believe one activity will have a damaging impact on the other one. I think it’s a win-win for the company, and operators will experience that in Brazil as well.”
Even within brick-and-mortar betting, preferences have changed since bingo was banned earlier this century.
“Brazil, originally, back in the late 1990s, always was a bingo country because, basically, we had a law for bingo, not for slots,” Baungartner explains. “It’s been 20 years since then; people change. The people that used to play bingo, they are now 50, 60, 70 years old. So everything changed.
“Will bingo be successful? I still think that there is a process and, from my personal perspective, I think bingo will be successful. And bingo halls only with bingo will be nice so people can also have a different game than slots, because for Brazilians at the moment, slots are more complicated, as they don’t understand too much.”
Land-based timeline
Baungartner and Pariente both believe the legalisation of land-based betting in Brazil will occur this year, with the country’s minister of tourism Celso Sabino previously predicting the senate vote will happen in H1.
Once the senate has approved the bill, it will be up to President Luiz Inácio Lula da Silva to sign it into law, with indications that shouldn’t be a problem.
Hard Rock will be one of those keeping a close eye on the specific details of the regulation and Pariente feels the company is ready to make its move.
“The brand is already prepared to take steps very quickly, provided the laws that we have and the regulations we have are fair,” Pariente adds. “Having a solid legal framework, very sound regulation and the feasibility on the project will be key, so we can deliver a project that will be in the country for decades to come.”
Pariente says any Hard Rock entry into Brazil will be conducted carefully to ensure compliance and ultimately aid Brazil with the key goals of land-based legislation, such as boosting the tourism industry and adding to the country’s economic coffers.
“From a company perspective, we continue to explore our possibilities in the market, to activate opportunities on the land-based side through an integrated resort,” Pariente says. “We continue exploring different opportunities on the digital aspect.
“But overall, we want to make sure that we do it in full compliance with all the rules and regulations of the country and we’re respectful of the process we’re going through right now.”
Cautious optimism over land-based legalisation
The general industry consensus is that legal land-based gambling will indeed return to Brazil this year, thanks to the new pro-gambling senate president and online regulation showing promising early signs in quelling fears over problem betting.
The momentum of gambling in the country is certainly growing and, although Pariente’s “roof before the foundations” analogy is a reminder that nothing is straightforward in Brazil, it appears the disappointment of previous failed attempts to legalise brick-and-mortar betting will be a thing of the past.
Pariente is anxious to see that process expedited, especially to avoid the problems with the grey market caused by the political delays seen on the online side.
“All these grey area (issues) that we experienced on the digital end are something that we could probably avoid, going into this evaluation of the land-based law,” Pariente notes. “We’ve seen the benefits of shortening the process. On top of that, we are going to leverage all the tough discussions we already had when regulating the digital world. And so I have to believe the processes will be a lot quicker.”
Brazil could benefit significantly from an economic standpoint, with the potential for a much-needed tourism boost and enhanced job creation undeniable, especially with giants such as Hard Rock preparing to make their move.
Utilising the lessons learned from online regulation, 2025 could indeed be the year Brazil finally welcomes a fully legalised land-based gambling industry, one that cements the country as a global betting powerhouse in both the digital and brick-and-mortar spheres.