El Salvador dives into iGaming, China is setting its sights on crypto, and Brazil’s betting bill is becoming high political theater.
Can gambling save El Salvador?
El Salvador is already a blockchain trailblazer.
In a controversial move, the government made bitcoin legal tender last year. Bitcoin ATMs were installed across the country and businesses were required to accept the cryptocurrency. President Nayib Bukele even bought $15 million worth of bitcoin during the recent price dip, making El Salvador the proud owner of 66 bitcoins.
The embrace of the blockchain seems integral to the country’s road map to economic development. The next step forward? Apparently, iGaming.
A recently passed law enables the national lottery to offer online gambling products, either directly or through a concession system. In line with President Bukele’s love of all things futuristic, the country has also bought a ticket to the metaverse, announcing the world’s first virtual casino, Astro Casino.
The combination of bitcoin and iGaming will also undoubtedly bring investment into the country. It could be that El Salvador hopes to turbocharge its economy by styling itself as an iGaming destination in the same vein as nearby Curaçao and Costa Rica. At any rate, the Central American nation is set to become the kind of natural experiment that economists dream about.
China closes in on crypto
Crypto’s chief advantages over fiat currencies include anonymity and decentralization — i.e., government regulators are bypassed. But how long can cryptocurrencies stay unfettered?
In contrast to El Salvador, which is embracing the freewheeling nature of bitcoin and gambling, China is using gambling to expand its reach.
The Chinese government is reportedly planning to pilot a new cryptocurrency in Macau. China’s central bank digital currency (CBDC), the digital yuan, is expected to help curb financial crimes, and the Vegas of the East is viewed as a perfect micro-ecosystem in which to test it.
The Chinese government is famously opposed to gambling, even going so far as to try and force the Philippines to scrap its licensing system (many POGO-licensed operators cater exclusively to Chinese players). Widespread (or forced) adoption of the digital yuan would give the Chinese government an even greater ability to monitor its citizens’ financial activities
We’ll see if China’s fiat-crypto fares better than Venezuela’s famously feeble Petro. However, one thing the Chinese government seems not to have accounted for is that one of the main appeals of cryptocurrency is decentralization. Outside a controlled experiment, how far would a cryptocurrency backed by a famously authoritarian government spread?
If the digital yuan takes off, it could set an example for other governments to introduce their own fiat cryptocurrencies. If Costa Rica’s bitcoin experiment fosters growth and boosts its standard of living, it could demonstrate the viability of using decentralized currencies at a state level.
A delicate dance
Parliamentary tussles over gambling legislation can make you wonder what’s going on behind the curtain. Do lawmakers take it one vote at a time, or are they plotting four moves ahead in a game of 3-D chess?
Last month, we covered how the evangelical bloc in Brazil’s parliament pulled an about-face and agreed to a vote on legalizing casino gaming in the country (and the rumors regarding their motivation).
Fans of political thrillers might read into recent comments by Brazilian President Jair Bolsonaro. In a recent radio interview, Bolsonaro reiterated his intention to veto any casino legislation — while mentioning that a parliamentary override is almost inevitable.
Congressman Felipe Carreras, the bill’s biggest proponent, has full confidence that rounding up the necessary votes won’t be a problem — but still, while the evangelical bloc has agreed to vote, this is likely an attempt to finally eradicate the proposal, which has lingered in the country’s congress for three decades.
The question arises, however: if the bill has been bouncing around for so long, why bother voting now? What’s changed?
The first factor that might come to mind is the impending success of the country’s legalization of sports betting. Somewhere underneath the righteous bluster, is there a lurking awareness that tax revenues from gambling fill government coffers just as well as “clean” money?
No matter the motivation, the urgency measure passed last month means that the final vote should be soon. If it passes, it’s a safe bet that sportsbooks operating in the country will trip over themselves in the rush to open a casino section.