Mississippi sports betting revenue drops 8.8% to $3.1m in April

Sports betting revenue in Mississippi for April fell short of March’s figure of $3.4m, and was 27.9% down on the same month last year, when $4.3m in revenue was reported.

Total handle for the month was $34.3m. This was a 22.9% decrease on the $44.5m in bets taken in March. However, it was 7.9% ahead of April 2023’s figure of $31.8m.

In terms of where bets were placed, Mississippi’s coastal casinos again led the way, reporting $1.5m in revenue and $23.6m in handle.

Central casinos took $6.6m in bets and generated revenue of $1.2m. Northern casinos, meanwhile, reported handle and revenue of $4.1m and $402,880 respectively.

What sports are they betting on in Mississippi?

With the National Football League (NFL) season having ended in February, basketball and baseball were the most popular sports for betting at Mississippi’s coastal casinos over April.

Baseball narrowly led the way for handle with $8.7m at coastal casinos, also generating $1.3m in revenue. They took $8.6m in basketball bets but reported a $525,117 loss on those wagers.

For central casinos, meanwhile, sports parlay cards led the way with $2.9m in handle to basketball’s $2.3m. Parlay-card revenue was $908,108, with basketball and baseball revenue totaling $220,331 and $48,922 respectively.

Mississippi online sports betting bill dies in committee

On 29 April, a bill for legal online sports betting in Mississippi died in conference committee. HB 774 would have allowed up to 30 online wagering platforms if they were tethered with casinos. A 12% tax rate would also have been set.

However, despite the house approving HB 774 in February, the bill didn’t make it out of senate.

Following the repeal of the Professional and Amateur Sports Protection Act in May 2018, Mississippi became the third US state to launch a form of legal sports betting.

However, it appears wagering will remain only available in land-based casinos and on-site mobile for the near future, despite three of the four states bordering Mississippi offering online betting.

Entain considers Crystalbet sale as strategic review completes

The Entain board’s Capital Allocation Committee launched the review in January, looking at its portfolio of markets, brands and verticals. This, Entain said, was with the objective of maximising shareholder value and reflecting the operational progress of the business.

Talk of potential brand sales intensified in March when the Financial Times reported that Entain had hired Wall Street firm Moelis to advise on asset sales. This came just a week after Entain posted a net loss of £936.5m (€1.10bn/$1.19bn) in its 2023 full-year.

Upon concluding the review, the committee listed several major findings. Among these is to consider “strategic alternatives” for Crystalbet, which was acquired in part by Entain’s predecessor GVC in 2018. Entain purchased the remaining 49% stake in the brand in 2021.

“The committee concluded that the brand is non-core to the group,” Entain said. “As such, strategic alternatives for this business will be considered, including interest already received from potential acquirers.” Entain did not disclose the identity of any interested parties.

What else is in the Entain review?

Alongside the possible Crystalbet sale, the committee also published several other conclusions from the strategic review. 

These include that Entain has the “appropriate” portfolio of diversified strategic assets, brands, capabilities and geographic footprint to ensure it is well positioned to deliver high-quality, long-term growth.

The committee also noted Entain’s future potential. It referenced a “significant upside” of focusing on returning to organic revenue growth, expanding margins and winning in the US.

In addition, the committee labelled the group’s balance sheet and leverage position as “robust”. This was strengthened by the extension of a revolving credit facility and term loan repricing and add-ons.

Analysing progress in key markets

As part of the review, the committee also analysed the situation in the group’s key markets. This includes operational progress made by Entain towards its strategic objectives.

On this, Entain still expects to return to growth in the UK later this year. This comes amid the “levelling of the regulatory playing field” with the new voluntary industry code on player safer gambling checks and the new £2 online slot limit that comes into effect in September.

Elsewhere in Europe, findings suggest Entain CEE (Central and Eastern Europe) is performing well. The committee noted outlook for online casino liberalisation in Poland in particular, saying this increasingly encouraging.

As for the US, the committee says that the delivery of the product roadmap for BetMGM is progressing well. It notes the recent launch of new markets for both Major League Baseball and the National Basketball Association as key developments.

Also in the US, Entain recently secured approval from the Nevada Gaming Commission for a full licence in the state. This licence covers all Entain applications and certain subsidiaries without limitation.

In addition, the committee says Entain is returning to strong double-digit revenue growth in Brazil during Q2. This, it adds, is being driven by the actions taken to improve customer acquisition and retention accelerating our performance.

On a wider scale, the committee praised the impact of Project Romer: a plan to reach an online EBITDA margin of 28% by 2026 and 30% by 2028. To make this happen, Entain plans to simplify the group to improve operational leverage and drive cost efficiencies. This will include making cross cost savings of £100m by 2025.

Still work to do for Entain

Reflecting on the findings, Entain chair Barry Gibson said he is “pleased” with the progress the group has been making. However, he adds there is still work for Entain to do to improve its overall performance.

“While we still have more work to do to improve our operational performance, the board is pleased with the progress Entain is making so far in 2024 in line with our strategy,” Gibson said.

“The group has the core strengths, brands and products to be competitive across markets. We continue to be a global leader in betting and gaming. The board looks forward to updating the market further on progress at the interim results in August.”

It was also noted that the committee will continue to regularly review strategic progress and consider options to maximise shareholder value. This, Entain says, includes ongoing oversight of all significant aspects of capital commitments.

Does Entain need to sell?

Circling back to the stand-out finding of the review and the possibility of selling Crystalbet. Does Entain really need to let go of the brand?

Firstly, it is hard to ignore the heavy loss Entain posted in 2023. The £936.5m figure posted in the full-year results far overshadows the 11.0% rise in revenue to £4.77bn, which, itself, was helped by the acquisition of new brands.

However, this M&A activity obviously incurred additional costs for Entain. One of the major deals struck in 2023 was the acquisition of Polish-facing STS, which incidentally incited a shareholder revolt from Eminence Capital.

Add in the HMRC and CPS settlement that was finally signed off in December, at a cost of £585.0m, and it is clear to see why Entain is considering offloading assets to recoup some expenses.

In its March report, the Financial Times said assets not directly integrated into the Entain’s platform will be given priority for sale. In total, these accounted for close to a third of net gaming revenues in the first half of last year.

Crystalbet is one such brand. Other businesses that also meet this criterion, and in turn may also face the chop in the future, include Dutch-based BetCity, purchased for £398m in 2023, Ladbrokes Australia and Baltics-facing Enlabs.

The sale of such brands would also fit in with Entain’s lasting focus on growing across core markets, including the UK and US.

Hard Rock denies talks over possible Star Entertainment investment

Local reports in Australia yesterday (20 May) said Hard Rock was part of a group seeking to invest in Star. The Australian Financial Review suggested Star land-based casinos would rebrand all under the Hard Rock name should the deal proceed.

Responding to the reports, Star said it had received “inbound interest” from several external parties over potential transactions. However, it also said the nature of this is unsolicited, preliminary and non-binding, with no approach resulting in substantive discussions.

Star also referred to links with Hard Rock, saying it had not received a proposal directly from the group. It did, however, claim one consortium featuring the Hard Rock Hotels & Resorts Pacific regional division of Hard Rock had shown interest.

Hard Rock has now issued its own response to the reports, denying any interest in a possible deal. The group also said it did not authorise the use of its brand in connection with any third-party proposal.

“We want to make it clear that Hard Rock International is not involved in, nor has it authorised, any discussions, activities or negotiations on its behalf in connection with a proposed bid for Star,” Hard Rock said.

“Hard Rock International has similarly not authorised the use of the Hard Rock brand in connection with any proposed bid for Star by any third party.”

Hard Rock could pursue legal action over matter

Going further in its response, Hard Rock said it takes any misuse of its brand “seriously” and it could consider taking legal action over the issue.

“Our brand is built on a legacy of integrity, excellence and a commitment to our guests, partners and team members worldwide,” Hard Rock said. “Any misuse of the Hard Rock name in unauthorised business dealings is taken very seriously. 

“We are currently investigating this matter and will pursue all necessary legal actions to protect our brand and reputation.

“We urge stakeholders and the public to rely only on official communications from Hard Rock International for accurate information regarding our business activities and partnerships.”

Star acknowledged the statement and issued its own response. It outlined that it has not engaged in substantive discussions with the consortium in respect of its proposal.

“The company today notes the statement issued by Hard Rock International which clarifies that Hard Rock International is not involved in, nor has it authorised, any discussions, activities or negotiations on its behalf in connection with a proposal for Star,” it said.

“Star will keep shareholders informed in accordance with its continuous disclosure obligations.”

M&A elsewhere for Hard Rock

While Hard Rock is seemingly not interested in making a move for Star, it has been active in terms of M&A in recent months. 

In March, the Hard Rock Digital arm struck a deal to acquire certain US-facing B2C assets from 888. However, details of which assets Hard Rock will purchase have not been disclosed.

888, which only launched its strategic review several weeks prior to this, says it expects the deal to complete in phases. It is aiming to finalise the sale by Q4 this year.

Uncertain times for Star as Bell Two Inquiry launches

Possible investment in Star would have been welcome relief for the group, which has been under the cosh in recent times.

In February, the second Bell inquiry launched, focusing on Star’s activities in New South Wales (NSW) and fallout of the first Bell report. There is also a focus on the culture at Star and whether it has the finances to support Star Casino.

There was positive news out of Star last week that linked to the Bell Two inquiry. Authorities in Queensland announced a further delay to Star’s planned licence suspension in the state.

Star was sanctioned in Queensland in December 2022 over a series of failings. The operator was slapped with a fine of AU$100.0m (£52.4m/€61.3m/US$66.6m) and informed its licence would be suspended.

Star was given an initial 12 months to resolve issues and prove it was suitable for a licence. The 1 December 2023 deadline was pushed back to 31 May this year after Star submitted a draft remediation plan to address issues.

However, this deadline has now been extended again to 20 December of this year. This is due to Queensland authorities wanting to see the second Bell Inquiry before making a decision on the licence.

Changes at the top for Star

The uncertainty does not stop there for Star. In recent months, the group has seen several senior personnel leave the business, with replacements yet to be announced.

Group CEO and managing Robbie Cooke left in March, as did chief financial officer Christina Katsibouba. Meanwhile, Jessica Mellor is stepping down as CEO of Star Gold Coast

In addition, David Foster announced his departure as executive chair. Incidentally, Foster had taken on additional duties following Cooke’s exit as CEO.

Alongside this, Star last month published a trading update for Q3. This showed a net loss of $6.8m, an improvement on the $49.7m loss in the previous Q3.

Revenue in Q3 fell 4.6% to €419.2m, while normalised EBITDA dropped 11.5% to $37.9m.

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Allwyn to post €2bn quarterly revenue after becoming National Lottery licensee

In a trading update, Allwyn said gross gaming revenue (GGR) for the period to 31 March 2024 could be as high as €2.05bn. The lower range of €2bn is still almost $500m more than the Q1 figure during 2023.

Allwyn acquired UK National Lottery operator Camelot in March 2023 and became the UK National Lottery licensee on 1 February 2024. That acquisition helped Allwyn to achieve a 97.5% surge in GGR in 2023, totalling €7.87bn.

As well as the UK contribution in Q1 2024, the group also outlined solid GGR momentum across most markets. Allwyn said this reflected its continued focus on driving organic growth.

In Austria, GGR continued to progress year-on-year during the quarter, driven by a strong performance in igaming. In the Czech Republic, GGR growth was up a double-digit percentage year-on-year on a constant foreign exchange (FX) basis. This was due to growth across all major products. However, FX represented a headwind of six percentage points, resulting in mid-single-digit percentage growth on a reported basis.

In the UK, GGR was flat year-on-year on a constant FX and comparable presentation basis, with Numerical Lotteries outperforming.

Marketing costs constrain Allwyn’s earnings growth

Adjusted EBITDA will be in the range of €355m-€365m when its preliminary unaudited financial results are released on 7 June. This would be up slightly on the 2023 figure of €346.7m.

Adjusted EBITDA growth was supported by a strong rise in the contribution from equity method investees. This boost was partially offset by higher costs in marketing for new product launches and higher personnel costs.

In the UK, the result reflected strong performance in January, which was the last month of the previous licence. Allwyn saw substantially lower profitability from 1 February due to the introduction of a new profitability mechanism.

CAPEX was €45.0m in Q1 2024, which was €20.5m higher year-on-year. The increase related to higher investment in the UK. This was in support of Allwyn’s plans to transform the UK National Lottery, with other segments’ CAPEX flat.

Allwyn “well positioned” says CEO

Robert Chvatal, Allwyn CEO, said the first quarter had set Allwyn up for success in 2024.

“2024 has started well, with trading broadly in line with our expectations,” he said. “This reflects good operational and financial performance and our ongoing focus on the delivery of our growth strategies.”

“Solid momentum in GGR growth continued in the first quarter. Allwyn successfully started the next 10-year licence period of the UK National Lottery. We have delivered further progress in adjusted EBITDA. Allwyn remains well positioned for 2024 and for the next chapters of its growth story.”

During Q1, Allwyn entered into an agreement to purchase a 70% stake in online content developer Instant Win Gaming (IWG).

IWG supplies online instant win games to more than 25 national and state lotteries around the world. The IWG portfolio of content currently includes over 250 titles. For the year ended 30 April 2023, IWG posted £18.2m (€21.3m/$22.9m) in EBITDA.

$450m loan offering announced

Meanwhile, Allwyn International has also announced the launch of an offering of a Term Loan B by Allwyn Entertainment Financing. The principal amount is $450m.

The proceeds from the offering will be used to redeem in full the €400m in aggregate principal amount outstanding under the Floating Rate Notes due 2028 issued by Allwyn Entertainment Financing (UK) plc. This will pay costs, fees and expenses incurred in connection with the offering and for general corporate purposes. A substantial portion of the proceeds is expected to be swapped to floating rate EUR.

SkyCity settles non-compliance case with New Zealand DIA

In February, the DIA announced it would file high court proceedings against SkyCity and its SkyCity Casino Management (SCML) subsidiary. This relates to alleged non-compliance with the country’s Anti-Money Laundering and Countering Financing of Terrorism Act 2009.

Draft pleadings set out five separate causes of action seen as “significant” compliance issues related to the Act. However, SkyCity said they mainly refer to historical matters and that some incidents were previously self-reported to the DIA.

SkyCity also said, since late 2021, it has been running an anti-money laundering and counter-terrorism financing enhancement programme. This is to address compliance systems and correct the historical shortcomings. This includes investment in people and technology, as well as reviews of processes and systems to identify areas for improvement.

SkyCity set for NZ$4.16m penalty

Taking all this into account, SkyCity has been able to reach a settlement with the DIA over the matter. Part of this included admitted to breaching it obligations set out under the Act. 

Failures took place between February 2018 and March 2023. The DIA flagged issues covering its AML and CFT risk assessment and compliance programme, as well as the monitoring of accounts and transactions, conducting enhanced customer due diligence and terminating existing business relationships when required.

The DIA, however, noted there is no evidence to suggest SkyCity was directly involved in money laundering or terrorism financing.

On reaching the settlement, parties will recommend to the high court that proceedings can move to a penalty hearing. Here, a penalty amount will be determined. They will jointly submit a penalty of NZ$4.16m (£2.00m/€2.34m/US$2.54m), although final determination is for the court.

“This agreement is an impactful outcome” AML/CFT group director at the DIA, Mike Stone, said. “We have achieved our desired result without the extended duration and cost of court proceedings.

“While we consider these regulatory breaches to be serious, we are pleased that SkyCity was able to admit to the breaches and acknowledged responsibility for what were significant failings.”

Taking action over failures in New Zealand

Stone also recognised the work SkyCity has done in the wake of these issues in terms of addressing the failures.

“It is encouraging to see the work SkyCity has already done to lift its performance in this area and its public commitment to continue to improve,” Stone said. “We will be working closely with SkyCity in the future in relation to its ongoing compliance obligations.”

Such efforts include refreshing the SkyCity board, recruiting new directors with specialist risk experience and establishing a dedicated risk and compliance committee. SkyCity has also increased internal audit capabilities and external audit scrutiny and appointed a group chief risk officer.

Looking at wider changes, SkyCity says it is now applying higher standards of due diligence on customers as appropriate. It is also increasing capacity across its financial crime, risk and compliance and host responsibility teams.

SkyCity adds that work is ongoing, with several initiatives set to further improve operations. These include a pledge to implement mandatory carded play across all New Zealand by mid-2025.

“Over the past few years, considerable progress has been made towards upgrading our AML and CTF systems,” SkyCity executive chair Julian Cook said. “This does not lessen the seriousness with which we take these breaches and we are disappointed that SkyCity is in this position.

“As a casino operator, we play a key role in combatting money laundering and terrorism financing and we take that responsibility seriously. On behalf of the board and management team, I accept and apologise for these long-standing failings.

“We have fallen short of the standard we should hold ourselves to, alongside failing to meet the expectations of our regulators, customers, shareholders and communities we are part of. We are committed to, and have begun, delivering the level of change that is required to meet.”

SkyCity also settles non-compliance case in Australia

The New Zealand settlement comes just days after SkyCity also announced a similar agreement in Australia.

Agreed with the Australian Transaction Reports and Analysis Centre (Austrac), SkyCity is set to pay AU$67.0m over historical AML/CTF failures in the country. The proposal is with the Federal Court of Australia, with SkyCity and Austrac putting forward separate submissions for approval at a hearing on 7 June.

The case came to light in December 2022 but concerns actually date back several years. An industry-wide compliance campaign began in September 2019, with SkyCity notified of alleged wrongdoing in June 2021.

At the time, Austrac said SkyCity Adelaide demonstrated a pattern of “serious and systemic non-compliance” with national AML and CTF laws. 

Issues include failing to appropriately assess the money laundering and terrorism financing risks. SkyCity also did not include risk-based systems and controls in AML/CTF programmes, nor establish a proper framework for board and senior staff oversight for these projects.

Other concerns include not creating an appropriate monitoring programme for transactions and identifying suspicious activity. Austrac also said SkyCity lacked an appropriate enhanced customer due diligence programme to carry out additional checks on higher risk customers.

As is the case in New Zealand, SkyCity accepted the findings and agreed to the penalty. The group set aside $45.0m in anticipation of a civil penalty, but the final amount is substantially higher.

New-look leadership for SkyCity

Against this backdrop, SkyCity has been making changes to its senior management team.

In April, SkyCity announced experienced gambling executive Jason Walbridge as its new CEO with effect from July. Walbridge is replacing Michael Ahearne, who recently left the group.

Elsewhere, Julie Amey has resigned as chief financial officer. Amey will continue as CFO for a further six months, officially stepping down on 25 September.

In addition, SkyCity in March named Andrew McPherson as chief information officer. He had been serving in the role on an interim basis since November. 

High regulatory costs driving potential for M&A “boom” in Brazil

Brazil passed Bill 3,626/2023 to regulate sports betting and igaming on 21 December. President Luiz Inacio Lula da Silva then signed the bill into law later that month.

The country is currently in the process of rolling out its regulations. Licence fees are expected to cost BRL30m (£4.6m/€5.4m/$5.9m) for up to three brands.

Normative Ordinance No 722 outlined regulations on the technology and security requirements of betting systems. Operators must gain certification of their systems from accreditation entities recognised by the ministry of finance. They must also keep their systems constantly updated to maintain compliance.

With operational fees expected to be costly, smaller companies could face obstacles if they are to operate in Brazil.

Patterson is an economist and partner at Redirection International, which specialises in M&A and has a team working in Brazil. His comments were made in relation to a new study on the Brazilian sports betting market, released today (21 May).

Patterson believes that hefty costs could be a key driver in increased M&A activity in the country.

“We see great potential for a boom in M&A in the sports betting sector, a universe where Brazilian passions for sports and technology are combined,” Patterson said.

“The trend towards M&A activities is driven in part by the substantial regulatory costs associated with the licensing process, including authorisation fees that can be as high as BRL30m ($6m), technical certifications and tax obligations. Collectively, these factors pose a significant challenge to the economic sustainability of small betting operators.”

M&A activity increasing

In preparation for the market regulating, operators are jostling for a position in Brazil’s market.

For instance, Better Collective acquired Brazil sports media platform Torcedores.com in September last year. Esportes da Sorte, meanwhile, acquired Loyalty Group in the hopes of building out its digital offering.

The rise in M&A activity is expected to increase further. However, Patterson also believes that despite global influences, local operators can still compete with the right strategies.

“It is expected that the legal requirement that companies have a Brazilian shareholder to obtain an operating license will foster mergers and acquisitions here in Brazil,” Patterson continued.

“It may be that the number of websites and companies will decrease, as has happened in Colombia, but we can expect significant changes, ranging from marketing, new technologies, to the large-scale deployment of private equity investments, as well as access to capital markets, including future initial public offerings.”

Brazil sports betting market expected to grow 50% annually

Redirection International’s study projected that Brazil’s online sports betting market will grow by an annual average of 50% until 2028. The M&A firm attributed this to rising popularity, technological innovations and the market entry of large international companies.

Patterson believes Brazil will be one of the biggest global online sports betting markets. He said: “Brazil is already the country with the largest number of users on sports betting sites. In 2022 alone, Brazil registered 3.2 billion accesses, and all this in a market still without consolidated regulation.”

Data from Aposta Legal Brasil indicates that 80% of Brazilians who bet online in Brazil wager on football. A total of 13% bet on esports, while 12% wager on basketball.

Data and market information platform Datahub found that between 2020 and 2022, the number of sports betting companies jumped from 51 to 239, a rise of 368.6%. Datahub also revealed 80% of betting revenue comes from online casino. Total sector turnover increased by 130% in 2023 to approximately BRL120bn.

Brazil regulation incoming

Brazil is currently rolling out its regulation in four stages, expecting to completely announce it by the end of July.

Earlier this month, Normative Ordinance No 2,191 established a 15% tax on player winnings above BRL2,824. The tax will be taken at source at the time of winnings being awarded.

In response, the Brazilian Institute of Responsible Gaming (IBJR) described the tax system as “harmful” and “legally questionable”, believing it could impact the success of the market.

“The rule will put at risk all the good work regulating the market done so far by the national congress and the MF prizes and betting secretariat and it also fails to understand that the objective of regulation is to encourage positive behaviour from both operators and bettors, including contributing to tax collection,” IBJR said.

Previously, Normative Ordinance No 615 banned operators from taking credit card or cryptocurrency payments. The aforementioned Normative Ordinance No 722, meanwhile, outlined special circumstances for data centres to be located outside Brazil.

Brazil: How does religion influence gambling regulation?

In Latin America (LatAm), somewhat surprisingly, no country has an official state religion. However, many associate Christian denominations with the region, finding LatAm in general synonymous with faith.

“The Latin American people are, for the most part, Christian,” says Magnho José, editor of BNLData and president of the Instituto Brasileiro Jogo Legal. “In most countries, this figure exceeds 80%, including Catholics and evangelicals.”

And according to both José and Hugo Baungartner, vice-president of global markets at Aposta Ganha, religion is having an increasing impact on politics in the region.

“Currently, the strength of religion on the continent and the advancement of a religious influence in institutional politics is notorious and more and more religious people, whether progressive or reactionary, have come together to propagate their projects in the public sphere,” José explains.

Baungartner adds, “[Religious] influence has been growing year by year with the increase of different religion types. Nowadays they even have their own politicians, including forming groups to execute their power and influence.”

Influence on Brazil’s legislative outcomes

Few LatAm countries have seen religious influence on their gambling policy like Brazil, despite being a religiously free country, which even boasts a national day devoted to the principle – 7 January.

According to the Global Religion 2023 study – carried out across 26 countries – Brazil has the highest percentage of citizens who believe in God or a higher power, at 89%. Predictably, this has bled into the country’s political regime.

“Over the last 82 years, several topics have caused controversy in Brazil and among them is the legalisation of gambling,” explains José. “Those who do not live in Brazil will have difficulty understanding the lack of objectivity and common sense of Brazilian politicians when it comes to gambling. Religious issues end up contaminating and distorting the debate.”

Brazil has been rocked by the evangelical movement over the last few years, with around a third of its population identifying as evangelical in 2022. It is no surprise, then, that evangelical lawmakers greatly opposed Bill 3,626/2023, the long-awaited law to regulate sports betting and igaming, almost stopping its progress completely.

“The most important country that faced [religious opposition] was, and will be, Brazil,” says Felipe Fraga, an expert on Latin America.

“The reason is that when we look over the most populated countries, no one has more than 20% of an evangelical population. Also, the movement of neo-pentecostalism is very powerful in Brazil and the political connections they have are very strong.”

Unintended effect of the black market

As with any regulating market, concerns remain over the presence of black and grey markets in Brazil. For Baungartner, the religious-centred aspect of the evangelical argument might do more harm than good in this respect.

“They say that [gambling] is against their faith and their God which, also, is against it,” he explains. “They use it to influence other politicians.

“Literally, for them it is devil’s business. They don’t understand that the world changed and it is better to have it regulated, instead having the grey market.”

Fraga – an evangelical himself – agrees, proposing that regulation will safeguard Brazilian citizens.

“They claim about a social point of view, looking to risks of addiction and how it can affect society, also arguing about money laundering and match-fixing,” he explains. “They say that the bill will allow or facilitate bad behaviour and criminal acts, which is completely wrong, since the idea of regulation guarantees for the country itself taxation and societal safety.

“It is exactly what the industry is looking for: fair rules for keep offering modern ways of entertainment.”

Right at the forefront of evangelicalism’s strongly-held beliefs about gambling is family values, according to José. He notes that at the recent National Conference of Bishops of Brazil (CNBB), gambling was slated as bringing “irreparable moral, social and, particularly, family damage”.

The following was heard at the event: “A vote in favour of gambling will, in practice, be a vote of contempt for life, for family and its fundamental values.”

But the dispute goes beyond a moral perspective. Evangelicals and other religious politicians also point to legitimate industry concerns, such as money laundering and tax evasion – which regulation would naturally address.

A long winding road to regulation

Religion’s influence on gambling law in Brazil stretches back much further than the last few years. Gambling was banned in the country in 1946 due to religious influence and bingo was legalised between 1994 and 2005 before being prohibited once again.

This is why the passage of Bill 3,626/2023 received such a positive reception when it passed in December – it was a long time coming.

Brazil is currently in the process of regulating its igaming and sports betting market. The country’s ministry of finance, in conjunction with the newly established regulator – the Regulatory Policy of the prizes and betting secretariat – is continually publishing rules for the market, which include prohibiting credit card and cryptocurrency payments.

Could Brazil backtrack on gambling regulation?

But to those rejoicing in the market regulating, José warns them not to get comfortable.

“There is a great risk of backsliding,” he states. “I don’t believe it will get to the point of repealing gambling laws, but the religious will hinder expansion and try to stifle existing gambling operations.

“The ecumenical opposition that criticises the possibility of legalising gambling should reflect that the positive benefits of legal gambling far outweigh the disadvantages proposed by any person or group against gambling.”

Baungartner is insistent that, at the end of the day, gambling is a business and its acceptance in other countries neutralises its standing saying: “The mentality has changed over the years.”

So outright revocation might not be on the cards – not yet, at least. As long as the industry plays ball, says Fraga, it should be a smooth road ahead for Brazil’s regulating market.

“As much the industry grows in Latin America and shows that it is an important part of society – generating jobs, moving economics, entertaining, controlling addiction, etc – there will be no reason to revoke the laws,” he says.

“Even though we can consider the risks, there will be nothing happening soon.”