Focused on Brazil
Even though casino gambling is illegal in Brazil, there are many Las Vegas-based casino companies planning to expand to Brazil.
According to reports, Las Vegas casino mogul Sheldon Adelson plans to build an $8 billion integrated resort in Rio de Janeiro. In a conversation between Sheldon Adelson and the mayor of Rio de Janeiro, there was no specific mention of a casino, but it is rather obvious there will be one in the fancy resort.
Adelson is the CEO of Las Vegas Sands, which is a company that specializes in casino development as well as managing integrated resorts in Las Vegas, Macau, and Singapore. Las Vegas is known to be a trend-setter in the casino development scene, specializing in integrated resorts that include gambling, entertainment, accommodation, and convention facilities.
Las Vegas Sands, however, is not the only company interested in entering Brazil’s casino market. There are many more, despite the fact that gambling is illegal in the country. Other companies include MGM Resorts International and Caesars Entertainment Corp., among others.
Gambling has been treated with a lot of sensitivity in Brazil, deeming it illegal, though there are some exceptions. There have, however, been many discussions on the future of laws the gambling industry in Brazil.
The country’s National Congress Chambers have been considering the legalization of different forms of gambling, and bills have been put forth for approval. The Senate’s proposal would make it legal to construct casinos in Brazil, with the number of casinos per area depending on its size and the population in the specific area. This basically means that a city that has a population of up to 15 million can only have one casino, a city with a population of between 15 million and 25 million should not have more than two casinos, and cities with a population of more than 25 million will only be allowed to have three casinos. They have put a cap on the number of casinos to prevent an overpopulation of casinos in a particular area.
There is a house bill that covers the legalization of some forms of gambling such as online gaming, sports betting, brick-and-mortar casinos, and the Brazilian Jogo do Bicho.
The several legislative pieces have hurdles to overcome, and thus, it is clear it will take a while before gambling is potentially officially legalized in Brazil.
Brazil is the fifth largest country in the world, with a population of over 200 million people, and therefore has a ripe market for the casino industry. There are many big cities in Brazil, and three of four cities could comfortably support more than one casino. The cities have high potential as tourist destinations, and they also have a good number of wealthy people. The good potential cities for casinos include Sao Paulo, Rio de Janeiro, Brasilia, and Salvador de Bahia. Rio and Sao Paulo, in particular, have a compelling population that needs to be attended to. If a casino is started there, the chances of success look very promising.
The successful implementation of casinos in Brazil will however be majorly influenced by the legislation of the country and the tax rates. If the law is not adjusted to favor casinos, there is no way a casino could thrive in Brazil. Also if the tax rates are very high, it would not make any economic sense to invest in the area.
Downside of Brazil
Even though Brazil has very high potential as a casino destination, it also has its dark side. Apart from the fact that casinos are currently illegal in Brazil, there are many other factors that may pose a challenge to the implementation of casinos in Brazil.
There is a corruption scandal currently going on that involves bribery and money laundering by corrupt government officials. The ongoing criminal investigation by the Federal Police of Brazil, known as Operation Car Wash, originally concerned money laundering before expanding to cover allegations of corruption at the oil company, Petrobras, where it’s said that executives have accepted bribes in exchange for giving contracts to construction companies at inflated prices. The investigation, which began in 2014, has posed a challenge to the casino industry, as it has been impossible to access the leaders concerned to talk about casinos. We can’t ignore the fact that we need the governmental leaders to officially legalize casinos in Brazil. Therefore, that may be a setback to casinos being launched in Brazil. Just like in other countries, corruption cases may take a long time, and the longer it takes to settle, the longer the wait time before casinos are officially legal in Brazil.
Las Vegas casinos are rapidly expanding to other parts of the world that show potential. It all started with Singapore and Macau, and now development companies are eyeing Japan and Brazil.
It is clear that Brazil is a ripe market for casinos though there are many challenges in the way. It is, however, likely that even though gambling is illegal, a few forms of gambling will be legalized before gambling, in general, is made legal. Maybe Brazilians will start having the Las Vegas experience through online casino before they can access brick-and-mortar casinos. With a plan set in place to restrict the number of regulated casinos in the country, there is never going to be an influx of gambling establishments in Brazil. It is also likely that the casinos will not go full blown like the Las Vegas casinos, and will instead have time limits and other kinds of restrictions. Politics and the corruption cases going on will definitely slow down the process, but in the long run, everything is sure to work out just fine.
There is a high likelihood that after developing Brazil, the Las Vegas casinos will expand to other countries in South America and generally grow in the region.