The Growth of Bingo in Latin America

The growth of bingo, especially online, has been fast and, in many ways, unexpected. Worldwide, the industry has been quick to shed its somewhat old-fashioned image and has been attracting a younger, more tech-savvy crowd that enjoys the social aspect afforded by the game. Land-based bingo is also experiencing a surge in popularity, especially in the U.S. and the U.K., where more and more players are male. In Latin America, bingo has a long history, and in many cases, the stereotype of the typical bingo player was never really appropriate in the first place. Indeed, bingo in Latin America has, in most jurisdictions, little or none of the more traditional connotations usually associated with the game. Rather, it has long been associated with larger complexes that offer a wide variety of betting options, in most cases including slot machines and, in some countries (such as Mexico), even sports betting as well.

Yet, despite growth, the region as a whole offers an extremely diverse picture when it comes to bingo, and in many cases the industry has been impacted negatively by political developments and lack of interest locally. For instance, less than two years ago, there were only a small handful of stand-alone bingo establishments in Ecuador. Now there are none at all, as President Rafael Correa banned gambling after a national referendum on the issue in 2011. In Venezuela in 2010, there were just over 60 bingo halls, many of which were attached to a hotel, but there now remain only a small and beleaguered handful in the wake of the now deceased President Hugo Chavez’s crackdown on the gaming industry. Meanwhile, in other countries such as Paraguay, where bingo has been permitted for more than 20 years, the game has simply failed to take off and only bingo on television is popular.

However, as betting becomes more popular and more socially acceptable in Latin America, the bingo industry, albeit slowly, looks set to expand over the coming years. So let’s take a closer look at some of the most dynamic markets in Latin America.

While bingo was only allowed under special license by charitable organizations until recently, according to the Chilean Gaming Control Board, there are now 2,321 bingo seats nationwide. Bingo is aided by the fact that the game fits in well with local government policy when it comes to gaming in Chile. Due to the more sociable nature of the game and low stakes involved, bingo is often seen as a lighter, more accessible betting option. Bingo in Chile is also seen to be in keeping with legislation that seeks to promote casinos as wider entertainment centers. Chile’s gaming law of 2006 ruled that casinos must be part of a four- or five-star hotel and that those casinos are part of a wider package that would promote tourism in the area. Furthermore, according to recent studies, locals are visiting gaming centers in increasing numbers in order to socialize.

Although bingo in these establishments accounts for only about 0.3 percent of GGY, the game has since proven to be an integral part of the newly revitalized gaming industry in Chile, as it fits in so well with the aims of the gaming act of 2006. The 17 brand-new casinos now up and running include bingo parlors, some of which are large-scale, with the largest housing more than 300 bingo seats.

In Argentina, where bingo has been permitted for longer, bingo halls are controlled and regulated by each state. Bingo halls are often large-scale and, in most instances, house a large number of slot machines. With 46 bingo halls dotted throughout the country, they are most prominent in the province of Buenos Aires, where Spanish company Codere is now a market leader in the sector. In 1991, the company was first granted permission to offer bingo in Argentina and, combined, Codere now runs just fewer than 5,300 slot machines in its bingo outlets. According to the latest figures released by Codere, revenue generated from its slot machines in bingo halls in 2011 amounted to €553.2 million, while EBITDA generated from its bingo halls stood at €165.2 million.

As previously reported in CEM, bingo halls have become an increasingly sensitive issue of late and could be singled out for more taxation in the future as both the government of the province of Buenos Aires and the national government seek ways to raise cash to meet shortfalls. So far, this has actually benefited the industry in some ways, as provincial governor Daniel Scioli in August 2012 extended the licenses of 14 of the 46 bingo halls in his province. Originally set to expire in 2013 and 2014, the licenses were renewed until 2027 in a deal that saw bingo operators pay a special license fee, a proportion of which was payable before August 2011.

Bingo is becoming increasingly popular in Colombia, and licenses to run bingo halls are granted in the same way that they are for slot parlors and casinos. The number of bingo halls has more than tripled since 2002. As with casinos and slot parlors, the new bingo halls are generally located in shopping malls (in some cases there can be up to three gaming establishments in a single shopping mall in Colombia). As is the case in Argentina, the leading bingo operator in Colombia is Codere. In 2008, Codere had 8,500 slot machines in Colombia and announced that it had become Colombia’s leading bingo hall operator following the acquisition of the sector’s leading bingo company.

In Mexico, bingo halls, almost without exception, contain slot machines in the form of electronic bingo terminals, and like sports books, they are usually part of larger gaming centers. The three largest gaming operators in Mexico—Caliente, CIE (Compañía Interamericana de Entretenimiento) and Televisa—all run bingo halls as part of their betting establishments. At present, about 50 applications for bingo halls have been made and are waiting for approval from the government.

Caliente runs 16 bingo halls, while CIE runs 28 bingo halls under the brand name “Yak,” which is Mexican slang for bingo. Meanwhile, Caliente aims to have 98 bingo halls in operation in the short term, which will house a total of 22,719 Class II machines. Codere has also been very active in the gaming industry in Mexico, in particular in the running of bingo halls. In 2007, Codere acquired a 49 percent interest in CIE company ICELA (Impulsora de Centros de Entretenimiento de las Américas), a licensee that operates 52 gambling establishments; the remaining 51 percent is held by CIE. Codere also manages bingo halls in Caliente Group betting shops and operates and owns 12 bingo halls.

Televisa, the largest Mexican multimedia/mass media company in Latin America and in the Spanish-speaking world, now runs 25 bingo and sports betting centers throughout the country via its company Apuestas Internacionales S. A. Telvisa, which is ideally placed to promote its bingo halls via its television networks. In 2005 Televisa was given permission to open a total of 65 bingo halls until May 2030.

By far the largest number of bingo halls in Latin America are located in Brazil, where the industry has continually undergone turbulent times. Bingo parlors were first permitted in Brazil in 1993 in order to fund government-sponsored sports programs. Since 1998, bingo parlors have been permitted to house electronic bingo terminals. As is the case in neighboring Argentina, these bingo parlors can sometimes be large-scale, with up to 400 electronic bingo games on site. Although still widespread, bingo parlors have halved in number since 2004, when the industry was hit by one of the most wide-reaching corruption scandals in the nation’s history. The scandal, which revolved around a video tape of a former government official demanding bribes from gambling bosses in 2002, led then-President Luis Inacio Lula da Silva to close all bingo halls pending a full-scale investigation into the links between bingo halls and organized crime. Since then, corruption scandals have emerged periodically, making the issue of bingo halls an issue that lawmakers seem increasingly reluctant to tackle head on. Consequently, the industry has failed to completely recover.

The industry is further undermined by the fact that it continues to exist in what amounts in many ways to a legislative limbo. Today there are about 600 bingo halls in Brazil that have been able to remain open by individual judicial order or via specific legislation now in place in several Brazilian states. It is estimated that, should the government finally regulate the industry, tax income generated by bingo halls in Brazil could stand between $3 billion to $5 billion a year.

Another Perspective
Although each jurisdiction offers its own distinct set of challenges, from a developer’s perspective, Latin America has a lot to offer. Zitro USA, a Spain-based developer of bingo and gaming machines, is becoming increasingly involved in the Latin American market. Here’s what Sam Basile, general manager of Zitro USA, had to say:

“The Latin American market is a principal market for Zitro. Our presence in the Latin American market is very strong. Currently we are present in Mexico, Argentina and Colombia and recently we decided to open new markets in North America.

“Our goals are to maintain and enhance our presence in the Latin American countries by continuing to leverage our ability to deliver state-of-the-art technologies and features to this market. With our latest innovations and exciting new games, players will see amazing graphics, engaging features and delightful bonuses that will take their experience and excitement to the next level.

“In addition, our participation in this sector’s top exhibition events allows us to be in constant communication with our customers in the Latin American market. Nowadays, Zitro considers Latin America a market of opportunities. Besides North America, Zitro is still exploring expansion into new Latin American markets. We intend to grow slowly, but surely.

“All of Zitro’s games are designed with the values of innovation, creativity and simplicity. Zitro also follows and incorporates the trends of other forms of entertainment in the different countries in which Zitro commercializes its games. The bonus feature in our new bingo game ‘Wild Rocks’ is a great example of combining other forms of entertainment with our widely popular bingo game format.

“Zitro’s state-of-the-art technologies are built into its Blackwave machines that are currently in the Latin American market, a fantastic platform for video bingo that can deliver superior graphics and sound. Last, we design bingo themes such as ‘Caperucita Roja,’ ‘Caniball,’ ‘La Catrina’ and ‘El Chavo del 8’ that embrace, celebrate and entertain the Latin American culture.”

With operators introducing new technologies to their operations and looking to expand and modernize their businesses, it would appear that bingo is already an integral part of the gaming market in Latin America. And while it should be pointed out that in many jurisdictions, the lion’s share of revenue by far is generated by slot machines housed on the premises, bingo looks set to be an integral part of the Latin American gaming landscape for many years to come.