EGR Compliance - What for you is the most attractive thing about launching operations in Brazil as an operator?
Peter Nolte - Brazil is by far the largest economy and gaming market in Latin America. The population is approximately 210 million people and gaming is deeply rooted in the country’s culture. Gaming was introduced to Brazil in the form of bingo in 1994. Over the years it has become very popular and has laid the ground for sports betting to become a major part of the country. Patagonia Entertainment has over 20 years’ experience in the Brazilian market.
Where do you see the biggest challenges in launching sports betting in Brazil?
Regulation is the main challenge for sports betting to overcome in Brazil. It covers key elements such as taxation for online, retail and the player. Having a clear and concise procedure for certifications and licensing will be key for operators to understand what is required and help put them in the best position to make the most of the vast potential of Brazil’s egaming market.
Is the Brazilian government going about the regulatory process for sports betting in the right way?
The government is going about regulation in exactly the right way. So far there have been two public hearings with the ambition of fully understanding the market and implementing changes where applicable. Colombia set a fine example when delivering its own regulation for online gaming. The regulation laid down has enabled operators to make a success of the market and the Colombian model is one that succeeded where others have not.
What impact do you think the so-called bad actor clause within the legislation will have on the demand for licences among sports betting firms looking to enter the Brazilian market?
We will not know the full impact until the government reveals how these bad actors will be dealt with. I don’t envisage the clause stopping operators entering the market because of the vast potential on offer in Brazil. If the right regulation is in place and simple to understand, then operators will adhere to the guidelines stipulated.
Do you believe the implementation of a 1% tax on operator turnover rather than gross gaming revenue will hamper or benefit the development of the Brazilian sports betting market?
I am against the 1% tax on turnover instead of gross gaming revenue (GGR). For me, the government should change this tax to a percentage of GGR. If they stick with the original idea, then operators might delay entry into the market to see how the land lies and that will hinder everyone.
What method do you believe international operators will use in entering the Brazilian market, partnering with local firms or going it alone? What are the benefits and drawbacks of each approach?
Operators looking at expanding into the Brazilian market must implement strategies that include a truly localised approach. Understanding what content engages Brazilian players is imperative and the best way of achieving this is through local partnerships who already have a footing in the market. Over the years I have seen a fair few unsuccessful operators spending vast amounts and not making investment count. The Brazilian market is very different from any other within Latam.
Under the proposed taxation framework, Brazil’s sports teams will only receive 0.7% of the taxes received in return for use of their media by sports betting operators, do you believe they will ask for more money?
This 0.7% figure for sports betting has just been taken from the current lottery law. A one-size-fits-all approach will not work here and changes will follow to ensure everyone is supported.
If sports betting is successful in Brazil, do you believe this will pave the way for the regulation and licensing of online gambling in Brazil?
I strongly believe that online gambling regulation will follow, despite the developments of sports betting. There is already one proposal with the Senate and another going through the Chamber of Deputies to regulate additional verticals, including bingo, casino and a much-loved local game called Jogo do Bicho.
Do you think the Brazilian authorities effectively handle an influx of licence applications from operators?
Yes, the Brazilian authorities have so far demonstrated that they are well set to handle the influx of applications. The more they have, the better for them so they have ensured they’re ready.
Will the regulation and licensing of sports betting operators end the black market of sports betting in Brazil?
In time I think it will bring an end to the sports betting black market. It will take time but it will happen if the right regulation is in place to avoid hitting the operators and players with too much taxation.
Will a successful Brazilian sports betting market lead to greater expansion of sports betting and eventually online gambling throughout the rest of Latam?
Yes, it will. I foresee that in the next five years we will see the majority of Latin American countries introducing their own gaming regulations. Peru and Argentina are two exciting markets to watch grow. Regulation provides the launch pad and then it’s up to the operators to deliver an expansion strategy that suits each individual country, as not one is the same in Latin America. Localisation is the way to build a legacy across the continent.
Source: Robert Simmons - EGR Compliance
