INSIGHT
LATIN AMERICA FOCUS BRAZIL
We're talking a really extensive, rollout of gaming... So from a global industry perspective, Brazil's land based market expansion has the potential to be the most exciting global opportunity in decades. I cannot think of a comparable expansion that would be so sweeping and all done in one time.
What do you think of the chances of the land- based bill being approved in its current form?
I find it hard to believe that the Senate will not make some amendments to the legislation as it moves through. And then, then the way that the process of work is the lower house, the chamber of deputies could then decide whether to accept or reject the Senate amendments before passing on to the President and the President could also make vetoes on a line item basis which could then be overridden.
All of that is to say is there's quite a few steps to go before we have the final shape of the law. And this is a politically sensitive area. Tere is a lot of money at stake and a lot of interests. So a lot of lobbying is going into it. And it was almost two and a half years ago, since the bill was passed in the lower chamber. Tings have moved on since then but generally, the passage of time invites a reconsideration of certain things.
that, we are definitely very much talking electronic gaming machines. So this is not necessarily a sort of inferior product. It's just that it would be a distinct thing.
Brazilian video bingo machines would become a key category in the global gaming industry for manufacturers. And it wouldn't be the case of just selling Class II machines from the US market into Brazil. Tere would have to be a sort of a made for Brazil video bingo.
Te bill as it stands, would allow for 33 casino resorts. So at least one in all states across Brazil, plus some additional casinos in tourist locations that doesn't have a number assigned to it. Plus they would be permitted in riverboat casinos. So all of that adds up to in theory to 50 plus casinos.
On the bingo side, each municipality could have a bingo hall for every 150,000 residents. I think that amounts to around 80 halls in Sao Paulo alone and something like 6000 across the whole country. But what ultimately that means is there would be the legislation would allow for full demand to be met. It would be a surprise if you saw every single one of the 33 available casino licences taken. And equally, you're not going to get 6000 bingo halls.
I think you’d see two distinct sectors emerge. One being a casino resort market, geared at a higher end of play, to some degree aimed to attract international tourists, but I think it would largely also serve domestic tourists and an upper-end of the market. Second to that, I think you'd see a more of a kind of
convenience locals gaming market through bingo halls. The bill would allow, in theory, thousands of bingo halls in municipalities across Brazil, and hundreds of thousands of video bingo machines.
Tis adds up to a very high likelihood that we will see changes to the legislation in the Senate. So for all that I have said about the scope of the bill and the opportunity that does need to have the big caveat that what ultimately counts is the final product.
Tis is a watch and wait situation. Do we think this bill will be approved? My sense of that is that the odds are in favour of Brazil ultimately legalising casinos, bingo, land-based gaming. So that has probably always been the case just by the fact that Brazil was a global outlier in terms of having a totally prohibitive market for gambling.
Tat is unusual on a global scale, and particularly so in Latin America, as you know, there is an extensive industry in Argentina. And Brazil is kind of surrounded by all sides, right, by countries that have legal casinos. You know, in a region of the world where gambling is generally regulated, Brazil has been the outlier.
It has probably always been the case that Brazil at some stage would legalise gaming. But I do think that that has become more likely as a result of Brazil moving to regulate online gaming. It makes the prohibition on casinos and land-based gaming seem even more of an outlier position when Brazil in a few short months moves towards a market where online operators offer sports betting and other forms of online games legally in the country.
WIRE / PULSE / INSIGHT / REPORTS P101
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