"Caesars' investment in Brazil will depend on the legal certainty of new gambling rules"

Jan Jones Blackhurst serves as the Executive Vice President for Government Relations and Corporate Responsibility for Caesars Entertainment. In a recent interview with Forbes Brazil, Ms. Blackhurst discussed the company's interest in the Brazilian market stressing the need for "transparency" in the licensing process.

During the latest edition of the Brazilian Gaming Congress (BGC) that was carried out in November, interational operators expressed confidence that legislators in Brazil will soon set a new regulatory framework for the gambling industry. Currently, both the Senate and the House of Representatives are dealing with two bills aimed at the legalization of the sector. If passed, any of the projects will have to be enacted by President Michel Temer.

“The President wants to get this done more than we do. They need to collect, deperately,” said lawmaker Nelson Marquezelli (PTB-SP), a member of the Special Committee for the Regulatory Framework of Gambling in Brazil, where estimations show revenue prospects reaching USD 6.3B annually. 

Drawing huge interest from the world’s casino operators, these groups know they have to keep a close eye on Brazil's legal and tax stability first before they decide to roll the dice. 

Proof of the industry´s interest in Brazil was the presence of Jan Jones Blackhurst of Caesars during the 3rd edition of the BGC that took place at the Tivoli Sao Paulo on November 20-22. Ms. Blackhurst served two terms as Democratic mayor of Las Vegas, currently holding the position of Executive Vice President for Government Relations and Corporate Responsibility for Caesars Entertainment.

In a recent interview with Forbes Brazil, the Caesars executive said Brazil´s new gambling rules will have to above all guarantee "legal certainty" and "transparency" for investors to bring their money in.

There have been ups and downs in Brazil in terms of legislation. For instance, Bingo activities were banned in 1946, legalized in 1993 only to become illegal again in 2004. Is this a concern for you?

Of course. It was one of the first things I analyzed. The regulatory framework will have to be transparent and provide the required legal certainty for operators to determine whether we are going to invest and in which way.

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I think the Brazilian government knows that international operators will withdraw if rules are changed in the middle of the game

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There has been a lot of talk in Brazil about the risks of gambling addiction but little has been said about job creation and income possibilities. What is your opinion about this?

Gambling has always sparked controversy. The legalization (of gambling) does not create sick people; addiction alreadly exists. That is why it is important that the regulation of the market guarantees the implementation of programs that deal with these matters. Part of gambling revenue must be allocated to assist people who require social assistance. Research shows that compulsive gamblers in the United States, Australia and the United Kingdom account for less than 2 percent of the people that go to gambling halls with trends dropping exactly because of the recovery programs that are financed by the gambling industry. Lack of information leads to little being said about the benefits that the sector creates, which are actually larger than the negative aspects that we have been discussing.

How many jobs could one integrated resort, like the one that the Brazilian Congress is currentlt addressing, generate?

During the construction process, we are talking about 2,000-4,000 jobs. Once it is operational, hospitality, food, entertainment, marketing and administration positions demand around 3,000 direct jobs and 5,000 indirect jobs. Furthermore, you have to consider the economic development for other sectors such as food producers, cleaning and transport services, that all together move around USD 100-200M annually.

What sort of investment are we talking about?

If there is an existing resort structure, we have to evaluate if the facilities and services need to be updated. We could estimate USD 800M dollars, probably. If we have to start from zero, we have to think about USD 1-1.5M.

How much is Caesars planning to invest in Brazil if the legalization of gambling is approved?

Depending on the legal certainty that the new legislation offers, and the transparency involved in the process, we will invest what it takes.