The regulation of the fixed-odds betting and online gaming market in Brazil, by Law 14.790/2023, was a milestone for the country's betting sector and ushered in a new era for the industry. It introduced a series of specific guidelines to eliminate bad practices from the market, such as operators' potential links to criminal schemes and money laundering on platforms, in addition to protecting players from abusive advertising.
These precautions are much greater and even more evident within a regulated industry, including regarding advertising, as seen in the Parliamentary Parliamentary Commission of Inquiry into sports betting, which addressed issues such as advertising by influencers.
There is no longer room in the market for advertisements that could be harmful to bettors or that promote a vision of enrichment through betting. Efforts are being made to provide a safe environment and demonstrate that betting should be viewed exclusively as entertainment and not as an investment, always from a Responsible Gaming perspective.
In addition to these much-needed changes, which are in line with ongoing efforts to eliminate irregular betting houses that do not follow good market practices and are harmful to the industry, there are also other challenges inherent to regulation itself, such as taxation of the sector.
Overall, the market already maintained a tax burden of around 25% to 28% of gross revenue, which bookmakers were supposed to allocate to the government. These processes are necessary to promote the growth of the entire sector in an orderly and secure manner, opening up a series of new opportunities for all players, in addition to generating wealth for the country, since in this new era for the industry, the money destined for betting remains in the domestic market instead of going abroad.
But it's clear that all agreements signed in this new era also become more costly and complex than before, considering investments in advertising and marketing, especially considering that all previous planning will have to be revised following the new increase in taxes to the so-called ‘Bets’.
It's clear that all company moves have always had to be carefully calculated, but now, with a smaller profit margin, such strategies also become more challenging.
In the affiliate sector, for example, there are discussions about the best way to compensate affiliates. Previously, when the market was still informal, acquisition was cheaper. Since both operators and affiliates are subject to taxation, both feel the impact.
In the case of affiliates, who receive commissions for attracting new subscribers through their links, contracts have also become increasingly formal. Today, the norm is to draw up corporate contracts that contain numerous guidelines on what the affiliate can and cannot do to promote the bookmaker's brand.
Our platform has always been clearly committed to this, including providing all necessary support to affiliates, providing consulting services and an experienced team always ready to ensure affiliates are effectively educated about advertising.
Within the market, there is an understanding that some aspects should be reviewed compared to what was happening in the industry before regulation, including clear rules regarding compliance. The type of advertising carried out on a large scale by industry players has also changed, emphasizing the understanding that betting must always be done responsibly.
In this context, affiliate training is increasingly emerging as an important alternative to consider what can be included in campaigns. An affiliate analysis before joining the program, monitoring their work, and well-established compliance policies at the bookmaker are other important measures to be observed. Therefore, from the outset, we have sought to be at the forefront of actions related to the education of advertising and to address the main questions that affiliates may have.
We are talking about a new market, which has required various adaptations and will likely require more, but which also has much that can be adapted to this new era. The important thing is that the government and responsible agencies continue to combat and monitor irregular bookmakers so that only honest companies that treat betting as a form of entertainment remain in the market.
Carlos Novaes
Affiliate Manager at HiperBet
