Brazilian gambit unravels

Local gaming companies are losing sleep over the direct and indirect effects of a decree signed on the other side of the world.

Those listed on the bourse are already feeling the pain, according to Nosy Tarsee’s sources on the trading floor. Most are assessing and monitoring the situation.

Last Friday, nine days before Brazil votes, its president signed a provisional measure banning fixed-odds betting and online casino games outright — operating, offering, intermediating, advertising. All of it. New deposits stopped at once. Players have until 5 October to pull out their money. On 6 October, the sites will go dark. Banks will return the rest of the money by 14 October.

The 85 licenses, each bought for 30 million reais ($5.8 million), are extinguished within 30 days. No refunds. No compensation.

Brazil’s Congress has up to 120 days to confirm the measure or let it lapse. But read the fine print: The licenses die on day 30, well before Congress must act. Industry groups promise court fights and lobbying. One analyst put the odds of the ban surviving at 85 percent. The opposition calls it populism. The president, in a tight race, calls it public health.

Now to the worry of local bettors in the Brazil market, which was meant to be the beachhead for some to back up their growth story. One particular giant paused its Rio opening after three weeks. The relaunch came in June. One brokerage says the platform never gained traction against the global names, and that the ban might merely stop the bleeding. Hardly the pitch.

It is not alone in looking.

Several Philippine companies have had their eyes on that market: over 200 million people, internet penetration near 90 percent, more than four billion dollars a year in revenue. Everyone had the same spreadsheet.