Analysis by Magnho José, President of the Brazilian Institute of Legal Gambling (IJL)

Brazil's lower house president confirms support of casino legalization only in IRs

Brazilian Chamber of Deputies President is committed to resort casinos, while IJL's head says it would be a bad option for the Brazilian gaming market.
Reading time 2:53 min
Brazilian Chamber of Deputies President Rodrigo Maia said this week during a lunch with businessmen in Rio de Janeiro's Commercial Association that his stance is the casino legalization in Brazil, but only as part of integrated resorts. In his column at BNL, Magnho José argued against this stance.

Rodrigo Maia said that the problem is "that gaming business stakeholders want to legalize everything, and that will not work," and revealed he read the study of Professor Samuel Pessoa, of the Getulio Vargas Foundation (FGV), and considered it very good.

Maia said that only two resort casinos in Sao Paulo and one in Rio should be legalized. "I am convincing the deputies to vote only in favor of the integrated casinos (IRs), and otherwise they have no way to move forward," he added.

In February 2018, Las Vegas Sands Corporation Vice President of Government Relations Andy Abboud was in Brasilia with a delegation of Brazilians made up by Fabio Lowenthal (Lowenthal Advogados), Henry Lowenthal (GR8 Capital Consultoria Empresarial), Camila Barbosa (Government Affairs Manager at Prospectiva Consulting), and Pessoa.

On that occasion, a study was handed over to the Ministry of Finance representatives and the lower House President, endorsing the stand that the best model for Brazil is the exclusive legalization of integrated resort casinos, and that the legalization of other modalities could freeze investments from major corporations.

The Paraná Pesquisas Institute revealed in May that same year that 52.1% of federal deputies support gaming legalization both in the casino segment and in the jogo do bicho lottery, bingos and online gambling, as provided in bill PL 442/91. On the other hand, 40.8% of lawmakers are against it, and 7.1% have not taken a stance.

Paraná Pesquisas also asked pro-legalization lawmakers if, “in the case that casinos were legalized, they considered they should be in any location, in tourist cities, in cities with low HDI, only in integrated resorts or their indifferent Location". The majority agreed that the installation of casinos in tourist cities (40.1%); and then in cities with low Human Development Index (HDI, 21.6%). Those lawmakers disregarding the location accounted for 16.2%, followed by those who chose to have casinos in any location (8.4%). The minority option was for installing casinos "only in integrated resorts", with only 7.2%.

This Paraná Pesquisas poll debunks the conception about a preference for casinos legalization in integrated resorts. "The truth is that the option for installing casinos only in integrated resorts is restricted to a few lawmakers," said Magnho José, President of the Brazilian Institute of Legal Gambling (IJL). "Based on the study of FGV's economist and professor Samuel Pessoa, hired by Las Vegas Sands Corporation, is at least risky and biased," he said. “The Chamber of Deputies President is completely wrong in relation to his concept about gaming legalization. Legalizing only the integrated casino resorts is not easier to control, it will not increase the number of foreign tourists, it will not generate so many jobs or a collection of R$ 20,000 million. This proposal is not good for Brazil, it is only for Las Vegas Sands,” said Magnho José.

“I think the legalization in resort casinos could generate a maximum of R$ 2,000 million a year in taxes, while the other modalities could bring nearly R$ 18,000 million annually to the Government. The legalization of these few casinos would also generate a maximum of 20,000 jobs, while job creation in a regulatory framework that includes all modalities has a potential of 650,000 jobs, counting only about 450,000 from jogo do bicho,” he added.

“In addition, IRs legalization supported by the lower chamber's President could lead to a strong crisis in current tourist hotels' occupancy rates (without casinos). The integrated resort casinos would represent thousands of rooms with subsidized accommodations for gaming revenue. The businessmen of Rio de Janeiro's hotels, who already face a strong crisis of occupancy rates, are deceived with the growth possibilities of their properties with the approval of the 'Sheldon Adelson Law' (PL 530/19 - Paulo Azi)”, IJL's head said, and he concluded: “I can't say this enough, the best thing for Brazil is the approval of the Gaming Regulatory Framework through the substitute to PL 442/91, which contemplates the legalization of all gaming modalities. Several markets that experienced long periods of secrecy successfully opted for this solution, and this is the proposal backed by the Brazilian Institute of Legal Gambling.”

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