Brazil Edges Closer to Land-Based Gambling Legalisation Amid Growing Momentum

At the start of the year, Brazil ushered in a new era of regulated betting as the country officially launched its licensed online gambling market on January 1. The development was met with considerable enthusiasm, with many industry experts predicting that Brazil’s online sector is well on its way to becoming a top-three global market. With more than BRL 2 billion (approximately £272.4 million/€326.1 million/$352.1 million) already collected in online licensing fees, the economic benefits of regulated digital gambling in Brazil are already being felt.

However, the legalisation of land-based casinos continues to be a contentious issue, facing hurdles similar to those that delayed the regulation of online betting. Despite the Brazil Justice and Citizenship Committee approving PL 2,234/2022 in June last year—legislation that seeks to legalise land-based casinos, bingo, jogo do bicho, and horse race betting—the senate vote has faced repeated postponements.

Nonetheless, optimism remains within the industry that the bill will finally be voted on and approved in 2024, particularly after the February election of pro-gambling Davi Alcolumbre as senate president. Alex Pariente, corporate senior vice president of casino and hotel operations at Hard Rock International, believes Alcolumbre's leadership could be the key to overcoming the remaining legislative barriers.

“Alcolumbre is not only a very experienced senator but is also very knowledgeable about the importance of legalising land-based entertainment,” Pariente states. “So there’s good dialogue, there’s good collaboration. I think we have good sentiment towards advancing with this.”

Ari Celia, director at Brazil-based payments company Pay4Fun, remains skeptical. “The rumours are the government, the senate, is considering voting the bill that is sitting there in this first semester,” Celia notes. “It’s politics. It may take longer. It may happen. We don’t know.”

Brazil has a long and complex history with gambling regulations. The activity was outlawed in 1946, and while bingo was briefly legalised at the turn of the century, repeated efforts to pass legislation allowing land-based gaming have consistently failed. However, the successful launch of regulated online betting has significantly shifted the perception of gambling in Brazil. Many within the industry believe this shift in mindset will pave the way for land-based legalisation.

Hugo Baungartner, chief commercial officer of local operator Aposta Ganha, has witnessed numerous failed attempts to introduce land-based betting legislation throughout his 28 years in the industry. However, he remains optimistic that the progress made in the online sector will push land-based gambling over the finish line in 2025.

“I think land-based regulation will come this year, because gaming is a reality in Brazil, number one,” Baungartner explains. “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.”

Although land-based gambling remains technically illegal, games like jogo do bicho, a traditional lottery-style betting game, continue to be widely popular despite being outlawed 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 points out. “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.”

Beyond regulatory control, the legalisation of land-based gambling is being positioned as a way to revitalize Brazil’s tourism industry. Pariente points out that despite past investments in large-scale international events like the 2014 FIFA World Cup and the 2016 Olympic Games, Brazil has struggled to increase its number of foreign visitors. The country receives around six million tourists annually, a stark contrast to the Dominican Republic, which welcomes over ten million tourists despite being significantly smaller in size.

Hard Rock sees this as an opportunity to contribute to Brazil’s economic growth. “We are very keen on presenting an integrated resort as a bigger impact on the economy, because of the magnitude of the investment,” Pariente states. “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 that legalising land-based casinos could be a transformative move for Brazil's economy. “There are huge opportunities,” he states. “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.”

The conversation surrounding online gambling could play a crucial role in advancing land-based betting legalisation. The latter half of 2024 saw significant political pressure regarding Brazil’s online gaming regulations, with the Supreme Federal Court even holding a hearing in November to determine whether online betting laws were unconstitutional. However, industry insiders widely believe the regulations will remain in place, with the initial public and political backlash beginning to wane.

Pariente sees a clear opportunity for an omnichannel gambling strategy in Brazil, integrating both online and land-based gambling experiences. “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,” he 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.”

Baungartner, who has closely followed Brazil's gaming evolution, notes that player preferences have shifted significantly in the past two decades. “Brazil, originally, back in the late 1990s, always was a bingo country because, basically, we had a law for bingo, not for slots,” he 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.”

With a vote in the senate anticipated in the first half of 2024 and support from Brazil’s Minister of Tourism Celso Sabino, many industry leaders believe the long wait for land-based legalisation may soon be over.

“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 concludes. “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.”

By fLEXI tEAM