Check below out the main excerpts from the interview:
GMB - I would like you to tell us about the affiliation scenario in Brazil and Latin America at the moment.
Alessandro Valente - It is a scenario that has been growing a lot. It still doesn't compare to what we have in Europe and the United States, but it is growing, and more and more websites are launched, as well as new and different strategies, online and offline. This is an evolution. A few years ago, I wouldn't have imagined that Brazil would reach the point where it arrived. Today we have more than 500 sites promoting games of various models and verticals, such as casinos, poker, and sports betting. It is a very positive moment, especially as Brazil has been the focus of several lectures, events and international publications. There is still room for new affiliates and foreign operators to arrive in Brazil to use this tremendous audience. We are more than 200 million inhabitants and we have great potential. I see that today we are at a level of growth and consolidation.
Do local operators offer anything more than the global ones that are coming to the Brazilian market?
Local operators in general have a differentiated service and usually done by Brazilians or even Uruguayans, but with great knowledge of the market. They have easy payment methods and websites in Portuguese. They usually offer a differentiated and relatively simplified product, while some foreign operations, when they come to Brazil, bring an infinite number of options. And in a way, complex for an audience that is not yet adapted to this market. Local operators have a more streamlined approach to the whole process, from payment methods to betting, although they have other more complex markets. One of the most important features is the games of these local operators, which are relevant. Most players who already knew a little about the market, whether in bingo halls or even street machines, find familiarity. Local operators have this advantage over foreign operators, who often arrive with wonderful games, but who are still far from meeting national demand.
You mention advantages. If there are any, that means that there are also disadvantages. Which ones do you see when working with a local operator?
One of the disadvantages is the solidity. You have some operators in Brazil today that do not offer a solid deal for affiliates. Some operators have agreements that do not compare with those offered by foreign companies. There are cases of operators offering affiliation for one or two years, or very low commissions. Foreign operators, on the other hand, often offer lifetime deals. That is, while the player is in that operation, the affiliate participates in the revenue. And there are more aggressive agreements. They pay more because they are hungry for traffic, audience, players. The locals are still crawling. I see companies that have sponsored football teams or stand out on television and they don't even have an affiliation. I think it goes against the trend of what happens globally. There are companies in Brazil that are being heavily publicized and that do not yet consider affiliation. Worldwide, affiliation represents between 40% and 50% of traffic.
How do you see the foreign affiliate and how is he participating in our market?
Some are arriving with a very European approach and far from what needs to be done. Of course, they are used to a type of audience much more prepared to receive that content, so they bring complex texts and instructions, very aggressive bonuses, etc. Sometimes you see a foreign affiliate website that is a little bit in Portuguese, a little bit in Spanish, words in English or even Brazil with “Z”. So, there is some lack of work or tropicalization of these foreign affiliates. This can be fixed by hiring local staff. I think this is one of the primary things that they should consider.
How does the war between operators work to win customers and force an affiliate to offer a bigger discount in this process of agreement and sharing of revenues?
Especially at this moment, with the arrival of foreign companies with fantastic contributions, which have offered much more aggressive deals than those of local operators, it will probably have an impact on operators who are not used to this type of affiliate marketing. If you consider local companies that do not yet work with affiliation, you cannot compare with a company in Europe that depends on affiliation, arrives here and is faced with someone who does not even know what affiliation is - or knows, but does not use this channel. So, they arrive in Brazil with great strength and end up conquering a good share of the market.
We see all this effervescence and we still don't have a law. How do you see the process of regulating sports betting and the gambling market in general.
From the point of view of affiliation, I think it will have a negative impact. First because of taxation, which will not be very suitable or attractive to operators. I think that some affiliates - or the majority - will allow themselves to work with foreign unlicensed operators because of all the advantages imaginable. With high taxation, we will have less revenue to share with the affiliate. You will also have less operation to generate volume for the affiliate. But the regulation does not address anything about affiliation.
Do you think the process will accelerate from here on?
I do not believe so. We have been waiting for two years and we may have to wait two more. The government is very ineffective in getting things done.
It is a comfort zone for operators, who keep operating outside the country and without paying taxes.
Exactly. It is completely incorrect. A strategy should be created for operators from abroad to come to Brazil, set up their operations in the country, pay taxes here, contributing to the whole society. But it has to be attractive. You don't have to be very smart to know if an operator will choose to operate in Malta, where the tax is low, or in Brazil, with high taxes.
After regulation, do you believe in self-regulation, with the industry looking to adjust and adapt to the reality of the business?
This is how it happened in England, where affiliates took the initiative to self-regulate and today the government has adopted many of those measures as law, and today the UK regulates affiliates. I think it will happen and it is natural that it will happen. My fear is that it will take too long or that it will be a massacre.
Source: Exclusive GMB