Brazil Insight
LAND-BASED CASINOS Uruguay & Brazil
Uruguay
Tourism was up slightly this summer season. Uruguay welcomed 135,400 tourists in the first 10 days of this year, 3.4 per cent more than in the same period in 2019. However Uruguay has been affected by the new tax imposed by the Argentine government on those travelling abroad. Uruguay is traditionally a popular tourist destination for Argentines.
Te Ministry for Tourism indicated that there was a fall in tourist spending: 18.6 per cent less going from US$2,154,770,925 in 2018 to US$1,753,781,316 in 2019.Tis data goes hand-in-hand with a decrease in the number of tourists who entered the country, especially Argentines and Chileans compared to the previous year. Te total number of visitors that arrived in Uruguay in 2018 was 3,711,948, while in 2019 that number decreased to 3,220,602.
Te income generated from Argentine tourists, meanwhile, was 24.8 per cent lower, while that from Chileans also decreased by 12.2 per cent. However there was an increase in Brazilian visitors, which grew 4.9 per cent, while Paraguayan spending increased by 5.4 per cent. Income generated by American visitors increased by 0.8 per cent and Europeans 1.3 per cent.
When it comes to casinos there have been a number of significant developments of late in Uruguay, especially in popular tourist resort Punta del Este. In February, the tender for the new casino licence for the Cipriani in Punta del Este was temporarily postponed after Enjoy blocked it at the last minute. Te San Rafael hotel in Punta del
Codere is reportedly looking for a partner to expand into the market. As acknowledged at the end of September, the company has had a number of conversations with potential partners to establish a possible joint venture or the sale of a non-controlling interest in the market. In Uruguay, the group already has operations through 2,252 gaming terminals, six gaming rooms, 26 betting venues, the Maroñas National Racecourse, Las Piedras Racecourse, as well as the Sofitel Montevideo Casino Carrasco & Spa.
Este, has been closed since 2011, but was acquired by the Cipriani Group for more than US$40m in February 2018. According to local law, a private casino in the popular tourist destination is only allowed, if an investment equal to or greater than that of the former Conrad hotel casino is made.
As a result, the clause that exists in favour of Baluma S.A (owner of the private casino at Hotel Enjoy) is being taken into account in the tender. In the terms and conditions, rules state that the amount to be invested in the construction of the new luxury hotel must be equal to or greater than US$160m, without taking into account the value of the land of the infrastructure for the new facility.
Representatives of Enjoy issued a brief statement saying that the legal move had been made with the purpose of “safeguarding their rights” when it comes to the contract between Baluma SA and the state. However, the government has since overturned the appeal.
Meanwhile, Codere is reportedly looking for a partner to expand into the market. As acknowledged at the end of September 2019, the company has had a number of conversations with potential partners to establish a possible joint venture or sale of a non- controlling interest in the market. In Uruguay, the group already has operations through 2,252 gaming terminals, six gaming rooms, 26 betting venues, the Maroñas National Racecourse, Las Piedras Racecourse, as well as the Sofitel Montevideo Casino Carrasco & Spa.
Integrated Resorts look like the future for the casino industry for now. In January, a number of lawmakers went to Las Vegas in order learn more about casinos and cruise ships in what could prove to be a significant step.
Senator Flávio Bolsonaro, (son of the President) President of Te Brazilian Tourist Board Gilson Machado (EMBRATUR), a number of Senators and sports personalities held meetings with Sheldon Adelson, as well as members of Te Nevada Gaming Control Board. Te delegation gathered information on a possible legal framework that would allow for the installation of casinos in resorts.
While there has been a lot of speculation on the issue and significant coverage in the press, one should always err on the side of caution when it comes to Brazil. Lawmakers for years have tried to change the country’s gambling laws which are intrinsically linked in the popular perception with organised crime. In addition, religious groups still play a crucial role in Brazilian politics.
Despite growing international interest from China and the US, Bolsonaro’s dependence on evangelical lawmakers means that he could continue to skirt around the issue. Bolsonaro has only and very tentatively come out in support of casinos, but this has been met with a fierce response from his base meaning that he will in all likelihood stay clear of the issue altogether.
NEWSWIRE / INTERACTIVE / MARKET DATA P139
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