Will the Brazil land-based casino vote get over the line?
The process to regulate online sports betting and igaming in Brazil is in its final stages with the legal market set to launch on 1 January 2025. However, it’s still uncertain whether the country will legalise bricks-and-mortar casinos and other land-based gambling activities.
PL 2,234/2022 was approved by the Justice and Citizenship Committee in June, although it only passed narrowly by a vote of 14 to 12. The bill was then passed to the senate plenary, which was expected to vote on it following its return from recess on 1 August, although it’s now September with the bill still unattended to.
But there does now appear to be an urgency for the vote to happen. Senator Irajá Abreu has pushed in recent weeks for the senate to finally legalise land-based gambling activities, claiming he has the required votes to do so.
In an interview with Poder360, Iraja said: “The text is ready to be assessed and voted on. I am convinced that we already have the votes to approve the project, which is important for Brazil.”
The time is right
Alex Pariente, corporate senior vice-president of casino and hotel operations at Hard Rock International, agrees now is the right time for Brazil to legalise land-based casinos, with a general industry consensus that with bricks-and-mortar gambling already happening without regulation, a more coherent law is necessary to protect bettors.
“I think we are at the point right now, again, anything can happen, but that everybody understands that it’s better for everybody to be given an opportunity to come up to the surface and formalise their businesses, contribute their taxes and adhere to the responsible gaming practices to protect the population,” Pariente told iGB.
Pariente also noted comments from Fernando Haddad, the minister of finance, as well as President Luiz Inácio Lula da Silva expressing support for PL 2,234/2022. If the bill passes the senate, it will be down to Lula to sign it into law, something Pariente feels would be a foregone conclusion.
“I’ve been following this process over the last 20 years and in the last five years with a lot of intensity,” Pariente added. “We’ve never been this close.
“The debate has been very intense. I’ve been myself in the senate a couple of times and I think it’s a very healthy thing to happen before we go into more concrete actions. So I’m positive and I think you’re going to see results very soon.”
Could the narrow passage indicate future roadblocks?
Some have raised concerns over how narrowly PL 2,234/2022 passed back in June.
However, as Aposta Ganha chief commercial officer Hugo Baungartner explains, the upcoming vote will be the entire senate rather than a special commission. He is also confident the bill will pass.
“The 14-12 was in the particular commission,” Baungartner said. “Now, going to the whole senate, it might be different. I think we have more votes in favour than against.
“The thing is, everything that goes to a special commission, every time we talk about gambling it’s very tight, the difference. Now going to the senate, we have more possibilities to work with.”
What are the benefits of land-based gambling for Brazil?
Pariente described the government’s desire for tourism as the “backbone” of the arguments for land-based casinos, with Brazil’s figures consistently lagging behind those of much smaller nations.
He used the example of the Dominican Republic, where Hard Rock has an integrated resort. Despite its land mass fitting approximately 175 times into that of Brazil, the Dominican Republic welcomed over 10 million tourists in 2023 to Brazil’s approximately six million.
Pariente believes the introduction of land-based casinos could prove a welcome boost to Brazil’s tourist economy, something he feels Hard Rock will be able to play a big part in as one of what Pariente expects to be around 34 integrated resort licensees.
“Brazil is an absolute beautiful country and very diverse,” Pariente continued. “There’s absolutely everything there is to see in Brazil, but yet we don’t have a clear tourism policy that has been developed and has been sustained that can be consistent with attracting tourists into the country.
“We’re not building an integrated resort to use the local person as a customer on an exclusive basis. We want to be a destination that attracts regional tourism, that attracts international tourism.”
Those economic benefits are already manifesting themselves on the online side. The number of digital licence applications from operators currently sits at 114 and, with a hefty BRL30m (£4.1m/€4.8m/$5.3m) licence fee for successful applicants, the Brazilian government could be set to raise BRL3.4bn from those alone.
It’s likely to be a hugely profitable industry for both operators and the state, with a recent International Betting Integrity Association (IBIA) study estimating Brazil’s sports betting market could reach $2.3bn in gross win for 2025 with a tax rate of 12% of gross gaming revenue (GGR). The Brazilian state’s additional legalisation of land-based casino could further boost those tax coffers.
Aspects still to be ironed out
But while Pariente praised the efforts of the Brazilian government in its efforts to legalise land-based gambling, he also feels there are still “wrinkles” in the proposals that need fixing.
For instance, Pariente and others are seeking clarity over Article 45 of PL 2,234/2022, which states 40% of the revenue from electronic gaming and betting machines will go to the leasing company or manufacturer, with the remaining 60% going to the operator.
“That’s something that doesn’t sit very well with most of the big operators,” Pariente explained.
“And don’t get me wrong, we want and do a lot of business with the equipment manufacturers. We’re probably one of the biggest customers they have today. But at the same time, we need more clarity on what the article means.”
Hard Rock’s plans
Should the vote pass as expected, Hard Rock’s extensive knowledge of integrated resorts will likely serve it well as it sets out plans for Brazil.
One region it’s particularly setting its sights on is the state of São Paulo, which has a population nearing 45 million. Hard Rock chairman Jim Allen has been open about the company’s plans to build an integrated resort in the state.
Those plans will also likely coincide with a digital Hard Rock presence and Pariente is confident the company’s previous experiences in the US will give the business a head start.
“The company has the ability to create relationships with the local entrepreneurs, whether those are construction companies or banks or the company and the brand,” Pariente said. “We love this partnership in destinations where we intend to put our projects.
“I can only imagine it would be the same in Brazil. We’re not coming there to impose our will or whatever. We’re coming there just to build the perfect team that will ensure we’re going to have a successful property that will serve the purpose that both the government and the company are pursuing.”
Another landmark moment for Brazilian gambling
After finally getting over the online gambling hump, Brazil also now looks to be in the final stages of getting land-based betting legalisation across the line.
Pariente is anticipating it to be a top-three market globally. Although he acknowledges the regulation isn’t perfect currently, it represents a crucial step towards establishing a regulated environment that benefits both the industry and the Brazilian economy.
If the land-based gambling vote passes the senate as the industry largely expects, the country could soon have one of the most thriving betting markets in the world, with immense potential to attract tourism and international investment from giants such as Hard Rock International.