JUE 16 DE SEPTIEMBRE DE 2021 - 19:29hs.
Juan Barrachina, Sales Director for Latin America

"Brazil is important to Kambi and it will be even more with the sports betting regulation"

In an exclusive conversation with Gildo Mazza in the GMB One-On-One cycle of interviews, Juan Barrachina, Kambi's Sales Director for Latin America, spoke about the global sports betting market, the impact that the opening of the United States brought to the firm and the expectation regarding the regulation in Brazil. According to him, Kambi is pointing to the Brazilian market as a priority: “We are already in the stage of seeking talent to develop our business in the country.”

GMB - How is Kambi currently positioned in the global gaming market and what are the company's main areas of activity?
Juan Barrachina -
I will make it very clear that Kambi is a sports betting service provider. We are not operators. We offer our product, service, staff and technology to game operators who have licenses in their countries where they are working. So it is important to highlight that we are providers of the sports betting product. We do not offer casinos, bingo games, poker games or payment methods; only sports betting for the operator's players to use on any gaming channel, which can be a physical location - a casino or sportsbook - or by through your computer, tablet and also smartphones, cell phones and mobile devices. This is a great success that has had the development of sports betting around the world in the last three or four years.

With over 20 years of existence, what were Kambi's main achievements?
I believe it was the fact that the founders of Kambi, who had many years working as operators, were visionaries and saw that the online sports betting business was going to get more and more complicated. And in what sense? Markets were beginning to regulate themselves and, therefore, products would have to be adapted to each country. Sports betting has changed. Before, we only made bets in the pre-match and it was necessary to invest in technology because live betting began. Currently, we have bets that the player creates on the web page and in the software. They saw that it was very difficult to share what it was like to make an operation, in which it was necessary to invest in marketing and enter different markets with the development of technology products. At that point, they decided to focus on developing the best product available to offer operators. This happened 15 to 18 years ago and, since then, what Kambi has been doing is continually investing in human staff to develop the product and technology well and support new operators who want to enter regulated markets and who are difficult to have access.

And what are Kambi's main tools to increasingly expand associations with sports betting operators around the world, and especially in Latin America and North America, which is its area of ​​expertise?
What happened, before these 15 years, when it was seen that we had to invest in technology and staff, we also saw that to enter new regions and new areas, we would have to do prior work. We couldn't wait for the markets to regulate themselves, but work ahead and see what the intentions were. Therefore, in two large areas, such as the United States and Latin America, seven or eight years ago, we decided to hire people with experience and knowledge in what was the operation and the provision of services, to send them to these places to beat at the door of the different countries to see what was happening. Mexico, Colombia, Argentina and Brazil, for example, is what I've been doing for the last seven years, getting to know the regulators, those responsible for the laboratories that certify, the local operators, whether lotteries or land-based casinos, and the operators of online gaming existing throughout the region and try to anticipate the openings in order to identify those who could be our operators and partners in each country to contract our service. I believe that we have had great success both in the United States and in Latin America, because this prior investment in money and resources, is bearing fruit. Very successful, especially in Colombia, and we very much hope that our operator in Peru is very successful. And we are very interested in everything that is going on in Argentina and, of course, in Brazil.

How to gain the operators' trust and offer your customers the best betting experience?
Mainly because what we do is not simply sell a product, but tell about our international experience, especially in Europe, what we've been through and what were the key points in the success of European operators. For example, if you want to invest, it is important to have legal certainty, so it is necessary to invest by having a license from the granting of the regulator in that country so that you can make the investment with peace of mind. It's important to be ambitious, because if you want to do an online gambling and sports betting operation and you're not ambitious about investing in marketing and hiring a team that knows ecommerce, you won't be successful. Telling all this, sit down to have a kind of free consultancy, and even explain to them that everything has to go together with a product, a technology, that is available and that is robust and offers a service that adapts and that it is flexible to what consumers in that country will demand or seek. These are the keys to success.

I think we've done this very well in the region and built trust, explaining everything. Not just telling you to hire us because we're the best. Far from that, we want to say you to hire us because we think that, as an operator, you have what it takes to be number 1 in your country. You have economic capacity, ambition, good relationships and the desire to be number 1, and that's why we want to accompany you. Kambi is strategically positioned always looking for operators that can be top 3 in their countries. We don't want hundreds of customers. We have few customers in the world, but we know they are ambitious enough to have 10, 20 or 50% market share.

Our business model is to be partners, accompanying our partners. If you succeed, we will win with you. If you don't have ambition, you can never succeed. I believe we are successful especially because we have demonstrated that we know the business. Many people within Kambi have been operators working for operators, following technology and product evolution, as we continually invest to be on top.

What are the main needs of sports betting operators that Kambi can meet?
The main thing, if we are talking about a new operator, or a new country like Brazil, is: Does gaming exist there? Yes, but there is no regulatory, certification and compliance requirement. So, our main message is: Will our product adapt to what its regulator says? Will it be certified? Are we going to comply with the requirements determined by the regulator? As long as you like, so you can be on the market as quickly as possible. We have been very flexible when it comes to adapting to such strict regulations, such as the Spanish, Colombian or US ones. So we allow the operator to be ready to go out to the market in the shortest time possible when it is regulated and under a 100% regulated and legal market. Thus, the product evolves and, as I mentioned, bets used to be pre-match and now they are live bets. This requires contracts with official data providers, that send data from the stadiums or football fields where sporting events are being produced. The evolution of this technology, which previously could only be retail, is now online and mobile. The ability to provide an offer that is relevant, that catches the attention of a Brazilian customer, that is available at all times, as we are in a 24 hour uninterrupted business, and that is "playable". And being “playable” means: when you want to place a bet, the product is quick, the money has been accepted, here is the receipt. It's like it is happening, of creating your own bet. This is fundamental and is what we say to the player: place your bet, combine certain events within markets or within the same sporting event. The tools can be the cash out, where you can sell your bet at any time.

All this requires investment and that's what we offer: to put a company ready to enter the market in a certified way and fulfilling everything I mentioned. With great software and a great team that we have for a long time to manage the client. Our profile is this. The customer is the one who will be able to make gains in a year or during the years we are together. All of this involves years of experience and a lot of investment in technology, and this is what we offer as a differential in relation to other providers.

You just talked about the United States. Is the American market already the main jurisdiction for Kambi?
Yes. We can say that the United States is the number 1 region in terms of active operators, revenue, number of plays, bets received and also regulatory requirements, as you know very well that the market is opening state by state. There is still a lot of work to be done. We have an office in Philadelphia, which is growing more and more, and we also add to the European operators we have, such as the Kindred Group, one of the top 10 international operators, which is also present in the United States and in several European countries. There are new regions to come, such as Central and South America, and we are looking very carefully at what can happen in Japan, which will be a very important market. And, of course, Brazil and India.

Right now, between Europe and the United States is where the biggest and most ambitious operators are. We are having a lot of success in Colombia with BetPlay and RaceBet. We can say that from the top 3 operators in Colombia, we have two of them, BetPlay, which is number 1, and RaceBet, which everyone already considers to be the number 3 operator.

And Colombia came out ahead by regulating online gambling!
Yes. Colombia has been a success story in every way. First of all, they approved a regulation that is very similar to the Spanish one and it has very good things. The tax is 15% on the GGR, which I consider a correct tax when exploiting this type of game. It is an open market, where there are around 17 licensed operators. It's very interesting to see that the local operators were the ones that positioned themselves and that they are the big ones, like BetPlay and Double Play. This is the example that I believe will be followed by other jurisdictions in Latin America, both in Argentina and possibly in Peru, and I hope that in Brazil, when they come to regulate, they will mirror themselves in open markets, promoting competition.

I have great affection for Colombia, which was one of the most enriching experiences in my personal and professional life. I hope it can expand to other countries in the region. Let's see what happens. In this year and a half of pandemic, practically all countries in the region are looking for new regulations, like Chile and Brazil, mainly.

How to face the expansion of business on the continent, especially at this time when we are still experiencing the issue of the pandemic?
The first is that the pandemic has accelerated ecommerce. Today, people order food to receive it in their homes, have meetings not in person, but through online tools such as Skype or Zoom. And in gaming happens the same. Casinos were closed, lotteries could not be sold on the streets for several months, sports were suspended. All of this has moved to the internet, online and mobile devices. This is causing local face-to-face business operators to pressure regulators to allow them to operate online. What is taking place is a migration from physical operation to online, accelerated by the pandemic. If it will take six, three or twelve months, we will be able to see that both Chile and Brazil regulate and are able to implement legal operations, or better yet, 100% regulated, it will depend on the authorities. It's a shame that politics has a lot of influence at the times. When there are presidential elections, everything may be delayed. If there is a stable government, everything can go ahead. This is a first derivative of the question.

The second is about what Kambi has done, namely, preparing for the last seven years. We did a good network, met people, we were positioning ourselves based on the success of operations in the United States and Colombia. So we are lucky for the previous work that will bear fruit. And in what sense? May you count on us as a possible provider option. There are many companies that want to come from Europe to Latin America and this will cost a lot, as they cannot travel and because they do not know people or expand their networking. So it is more difficult for them to be able to travel as before. The pandemic for the sector was good, as it accelerated the transition to the online world. And we are aware that the online world is now dependent on mobile phones. It's where practically everything is consumed.

And how do you see the Brazilian market, one of the largest in the world, which is not yet regulated for sports betting?
The Brazilian market, at Kambi, is appointed as a priority in this second semester and even for next year. We are in the stage of searching for talent – ​​national or local – that can help us develop our business in Brazil. It's already a very big market. There are numerous international firms operating in Brazil and advertising. I read in Games Magazine Brasil that 18 of the 20 clubs in the first Division of football [Brasileirão] have sponsors from online gaming and sports betting companies. And we know that the business is on the streets and has been growing a lot. So there is, and it's big. What we need to see is whether it channels around legalization and regulation. We think so, as it is a way of generating security [legal] and taxes, in addition to creating wealth by hiring personnel and teams in Brazil.

We believe that in the next 12 months we should have something concrete with 100% regulation. We also have the subject of state lotteries, which we are monitoring and following with great interest to know what the final position will be between the public sector, state lotteries and private operators – international or local – that will conduct the sports betting business.

For Kambi, Brazil is a key market and we will support international operators that win licenses or participate in some state lottery bidding process or help local operators that have developed in recent years and that want to step forward with the best technology and best product. Possibly there will be competition between several operators. Being alone, operating in monopoly, it is possible to have a “more normal product”, but when competing with companies like Bet365, SportingBet, Sportsbet.io and William Hill, you need to have a product that is very competitive. In this business, the top 3 or top 5 are the ones that share the bulk of the revenues in the general market.

So Kambi has two strands to operate in Brazil, lotteries and sports betting, that’s right?
No. We are offering sports betting services for lotteries or consortia that will offer lottery, scratch card and competitive sports betting products in different states. Then we would enter, Kambi, as a service provider for this lottery or for a consortium of companies, which would exploit these lotteries with sports betting.

The firm has big plans for Brazil!
Always. We have a team in London and Sweden of Brazilian origin who are eager to see when they can work in Brazil. We don't know, but at some point we will establish an office, as the country is very large and almost a continent. It will definitely require extra effort on our part. These are topics that are being studied, but Brazil, as I have already mentioned, will be the largest market in Latin America, to whom we are looking with great care. Just like Japan, India and the United States. All of them are are countries with hundreds of millions of inhabitants.

Source: Exclusive GMB