When we think of gambling hot-spots, we think of Las Vegas, Macau, Melbourne – places where integrated resorts with thousands of pokies line the floor, and high-stakes tables abound. Or, we might think of the most distinguished online casinos and bookmakers that have been around since the turn of the millennium, like Royal Vegas or Ladbrokes. South America, however, rarely comes to mind.
That’s because South America’s largest and most populated nation, Brazil, hasn’t allowed it’s residents to gamble on anything outside its state-run lottery – at least not legally – in the last 70 years. But according to the current attitude of the federal government, that could change very, very soon.
Financial Times (FT) reported this week that Brazil is on the verge of legalizing gambling. That plan has been in the works for awhile now, and if it does happen, it would have a remarkable impact on the region. Not only would Brazil’s vast, multi-billion dollar illegal gambling market be all-but decimated, it would convert much of those illicit wagers into desperately needed tax dollars.
Illegal Gambling Rules the Roost in Brazil
Analysts indicate that Brazil’s illegal, mafia-run gambling racket, Jogo do Bicho – dating back over a century to 1888 – is worth a staggering R$12 billion/year (AUD $4.8bn).
Jogo do Bicho is an animal-based lottery game where punters place bets on 1 of 25 different animals, like snakes, lions and rabbits. To ensure legitimate randomness, the game piggy-backs off the state lottery, using the numbers in the daily drawing to determine which animal wins.
According to FT.com, this Brazilian illegal gambling market is so popular among all ages groups and wealth classifications – “rich and poor, old and young” – it stands as tangible proof that a legal gambling industry would be phenomenally successful in the country.
Legalization could occur as early as this year, and in the eyes of the government, the purpose is crystal clear. The nation is staring at a gaping budget deficit, and the money raised by regulation and taxation of gambling could fill that gap in one fell swoop.
Live, Online Casino Operators Ready and Willing
As the world’s 5th largest country, by land mass and population, international operators of live and online gambling sites see Brazil as the perfect opportunity to expand their businesses into one of the ripest markets on earth.
“It would be one of the most significant events in gaming history if Brazil opens up to the gambling sector,” wrote UK-based William Hill in a statement.
“The Brazilian market has enormous potential with a population that has long enjoyed a love affair with football,” said another UK-based bookmaker, Ladbrokes, which has seen football wagers soar as it’s “fastest growing product.”
MGM Resorts International was quick to verbalize it’s interest in building “large-scale integrated resorts” in Brazil.
According to one São Paulo-based attorney, Luiz Maia, who specializes in gaming law, multinational clients have already taken steps to negotiate partnerships and sign provisional land contracts in anticipation of approved gambling legislation.
Brazilian-based Legal Gaming Institute (IGL) said that, based on calculations from other regions where live and online gambling is regulated and taxed, gross gaming revenue averages approximately 1% of a nation’s gross domestic product. With that in mind, IGL estimates a Brazilian gambling market, with both live and online casinos, could generate R$55 billion in annual total wager.