Ricki Chavez-Munoz reports on what’s happening in South America.
Going to print so close to the January edition in order to be able to distribute both editions during ICE, we don’t have much to say but what we have is of great significance for the region. This concerns possible gaming legislation in Brazil for casino resorts. Indeed, just like it reads. The first significant move comes from Rio’s mayor, who has a clear idea for building an integral resort with casino games, and he has contact with a large potential investor, liquid with billions of dollars at the ready. Close to the Rio mayor’s proposal comes comments from the Rio governor, Wilson Witzel, who took office early in January.
Governor Witzel has full knowledge of the local financial and gaming legislation situation and said: “We are committed to approving the legislation that enables the installation of casinos in Rio de Janeiro State. It is not possible (to see) that people spend fortunes only in Las Vegas. There are also many places to host casinos here, and there are opportunities for that. We’ll just adjust control and supervision mechanisms and there won’t be any problems. The state would earn lots (in tax revenue) and everyone would benefit.”
Without a doubt, we will be talking to our Brazilian friends during ICE 2019 and we just have to dash to get there. Please don’t forget that you are invited to visit us at our booths during the London Show. See you all there!
BRAZIL – Rio mayor supports casino IRs
“As a mirror of the city itself, the port area of Rio has an unmistakable image for tourist activities, leisure, gastronomy and entertainment,” reads an editorial item in the Brazilian leading daily O Globo.
Revitalized since the demolition of the high perimeter wall within the works package for the 2016 Olympics, the Rio port area zone now shines in its own light. In the last two years it has implemented new city cultural icons, such as museums: do Amanhã, which has received more than 3 million visitors, and the Museo Arte do Rio (MAR), as well as the Aquario.
Following a period of hesitation and reflection on the severe economic recession of 2015/2016, companies are beginning to move to the port zone in Rio port, occupying modern buildings which were built in the euphoria of the 2016 Olympic Games.
However, the public-private partnership that supports Porto Maravilha, involving the City Council, the Caixa Economica Federal and the Porto Novo concessionaire, faces moments of inactivity as a result of the economic crisis that paralyzed the city’s real estate market and the economy in general, jeopardizing associations like Porto Maravilha, called public-private Partnerships (PPPs), which are fundamental for the city.
It is important to remember that with the interruption of La Caixa programmes, the City had to take over maintenance of the area. In this sense, the idea of Rio Mayor Marcelo Crivella is coherent when he talks about supporting construction of an Integrated Resort casino complex in the port, along the lines of something like the Marina Bay Sands in Singapore, in order to finance the development of the region. For a project like this there would be foreign companies willing to invest in the project, including Las Vegas Sands Corp., owner of the Singapore IR.
In fact this could be a great way out, although, according to Crivella, the legal obstacles must still be overcome. Gambling, and more specifically, casinos, were banned in the country in April 1946, during the government of Eurico Gaspar Dutra, and that prohibitive legislation governs until today. At least officially, because in practice, casinos are known to operate illegally in every corner of Brazil.
At any rate, digital technology these days allows companies to set up business in countries where gambling is allowed and to receive bets from anyone, including Brazilians. This means that when the house wins (the casino) the state is the loser because in not having gambling legislation and specific regulations it is unable to collect on gambling tax.
It is estimated that, in its legalized gambling form — lotteries, horse racing, sports betting, etc. — and also illegal gambling (Jogo do bicho, slot machines, casinos) Brazil generates around R$50 billion a year, some US$13 billion. It is assumed that per capita gambling spending in Brazil is US$18,53, while in Uruguay, it is US$40, and in Portugal the sum reaches US$228.
The only way that the State can exercise effective control over this market is by legalizing gambling. There are several casino and gambling legislation projects in Congress with proposals to get Gaming out in the open, from the most restrictive to the most permissive. However, say the critics, there is a need to be cautious about the alleged connection of these activities with money laundering, for example.
In the face of such an example, industry and gaming regulation experts make the sound claim that while there is suspicion of crimes within the regulated gaming industry, such suspicion turns to facts in illegal gambling, which coexist with criminal elements whose cleanest crime is, indeed, money and assets laundering.
URUGUAY – Punta del Este gets ready for a new casino in 2021
A report from Uruguay on the Cipriani Club de Residencias Ocean Resort and Casino, announces that the opening of the tourist and residential complex “will bring the hallmark of elegance and luxury” to Punta del Este with the new and impressive real estate project with an estimated investment of US$450 million.
Investor Giuseppe Cipriani said that he wants to inaugurate the first stage of the megaproject for the summer of 2021 and has confirmed that the current structure of the old hotel San Rafael will have to be demolished to house the new property. Cipriani has also made assurances that it will be ‘fundamental’ to obtain licensing authorization for a casino to operate in the complex.
In an interview at a local radio programme, the investor confirmed that the new investment programme will bring very important work to Punta del Este and Uruguay and pledged to work on this to bring more people to the country’s main seaside destination from new places overseas.
As for the implementation and building of the megaproject, Cipriani confirmed that the start of the first stage is scheduled for next August and, if the work is developed without complications, it is expected that this stage will be completed and can be inaugurated for the summer of 2021 (Jan-Mar).
US Department of Justice threatens fledgling online gaming industry
One can just see in one’s mind’s eyes the filthy hairy hand of interest groups pushing hard for decisions to protect their own business, whatever they may be, that might truly affect the dynamic progress of the fledgling online gaming industry in the U.S.
The legal opinion published by the Justice Department’s Office of Legal Counsel, on Monday 15 January, aims to reverse what is called “an Obama-era opinion on the Wire Act, a federal law that bans bettors from transmitting gambling data across state lines.” The 2011 opinion declared that the Wire Act applied only to sports gambling.
Last May, the Supreme Court ruled against a federal law prohibiting gambling on football, basketball, baseball and other sports in most states, and cleared the way for states to legalize betting on sports. Following this ruling, States began to pass legislation to allow sports books to open.
The US Justice Department’s opinion could affect states like Delaware, Nevada and New Jersey where online gambling is legal, and slow down decisions of other states that have proposed legislation to do the same.
Richard Williams, Licensing Partner at law firm Joelson, comments on news that US Department of Justice plans to restrict all forms of online gambling, saying it “will be a serious blow to operators that have rushed to take advantage of new state-specific gambling legislation in the US.”
He continues, “The fear is that uncertainty around how this decision will be applied may lead financial instructions to adopt a knee-jerk reaction and block remote gambling transactions altogether, which could wipe out the fledgling industry.
“It remains to be seen whether the Department of Justice’s decision will lead to any retrospective federal enforcement for states that have already enacted legislation, or whether financial instructions will indeed adopt a blanket approach and block transactions. Whatever the outcome, investors in the fledgling online gambling market will no doubt be uneasy about anything that could scale back gambling operators’ prospects in the potentially huge US remote gambling market.”
ARGENTINA – Boldt loses tender in 5 Buenos Aires casinos
Following an opinion of the Buenos Aires Province Prosecutor’s office, based on various non-compliance with Specific and Technical Specifications governing tender rules for seven casinos in the Province, official regulators in charge of the tender process, Instituto Provincial de Lotería y Casinos (IPLyC), made the decision to exclude local firm Boldt from the operation of five of the seven casinos, which they had operated for more than 20 years.
As stated in the Official Gazette, IPLyC’s decision has left Boldt out of the running in two of the three tender groups of casinos: Central Mar del Plata and casino Monte Hermoso, in the first tender group; also slots operations at the casinos of Tandil, Miramar and Hermitage of Mar del Plata, in the second tender group.
The decision taken by IPLyC is signed by its chief, Matías Lanusse, and follows electoral promises made by Maria Eugenia Vidal, governor of Buenos Aires Province, who confirmed upon assuming charge that a new tender for the concession of the provincial casinos would take place for the first time since 1995. All seven casinos operate a total of around 7,000 slot machines throughout the provincial territory.
PERU – Lima to host principal Latin American gaming regulators
Lima, the Peruvian capital city, will host the 6th edition of the Cumbre Iberoamericana del Juegoevent where the principal regional gaming regulators and gaming industry specialists will debate on the challenges facing the sector within the global context. The main players in the game sector will debate on issues facing the industry in Ibero-America at the annual meeting referential gathering for the sector to be held on 14 and 15 May 2019 at Swissotel Lima, in residential San Isidro district.
The Cumbre is an established event unique as the only meeting point that brings together gaming regulators from all Ibero-American countries to strengthen government and business ties and has become a must-go meeting place for stakeholders in the sector.
Cumbre organizers have confirmed that up to now regulators from Uruguay, Puerto Rico, Ciudad de Buenos Aires (Argentina), Paraguay, Panama, Portugal, and Spain have confirmed their presence, as well as hosts Peru. Still to confirm assistance at this leading event are regulators of countries such as Mexico, Colombia, Chile, Costa Rica, Bolivia, and several more, as well as organizations such as the Ibero-American Lotteries and Betting Corporation (CIBELAE), which with certainly will be joined by other executives in the next few weeks.
The Peruvian gaming associations will also participate in this event
The event will have an extensive political and business representation that will enable operators and manufacturers strengthen their ties with the public administration and improve information exchange tools between government and companies.
Cumbre Iberoamericana del Juego– Ibero-American Gaming Summit, organized and promoted by JAK Comunicación, is supported by the Ministry of Finance and Public Administrations of Spain, through the General Directorate of Gaming Management, and Peru’s Ministry of Foreign Trade and Tourism, through Dirección General de Juegos de Casino y Máquinas Tragamonedas.
The Summit brings together, edition after edition, more than 200 international participants, and visitors are able to register visits at the website of the Ibero-American Game Summit: http://cumbreiberoamericanadeljuego.es
Ricki Chavez-Munoz for Casino International February 2019 edition