How not to get burnt in a hot Brazilian gambling market
Carla Dualib, regional business development manager at SOFTSWISS, delves into the intricacies of Brazil’s gambling market and unveils the strategic nuances steering success in this country.
Opinion.- In the dynamic igaming space, Brazil is currently one of the hottest prospects on the horizon. However, as the market enters a fragile and uncertain regulatory phase, operators must act thoughtfully to avoid making fatal mistakes.
In this article, the first in a series of monthly columns by SOFTSWISS experts focused on analysing the Latin American market, Carla Dualib, regional business development manager at SOFTSWISS, takes an in-depth look at the Brazilian market and explains how operators must act to achieve success.
Navigating market landscape
Being one of the top five countries by population, with 215 million people and growing, Brazil is emerging as a dreamland for gambling operators. The realm is booming for several reasons.
First, it’s about overall economic potential – Brazil is one of the largest economies globally, with a growing middle class and purchasing power. Obviously, the more affluent people are, the more opportunities they have to enter new entertainment activities.
Second, the increasing internet and mobile penetration covers 70 per cent of the population and will go further. This dynamic makes the local mobile gaming market the top priority for companies aiming to establish a strong foothold in Brazil.
Understanding regulatory challenges
Brazil’s gambling market is currently in a perfect storm of regulation. Companies seeking to enter this hot market closely monitor every legislative step. The government recently introduced new rules for gaming companies. To operate, they need approval from the Ministry of Finance, proven industry experience, and must pay BRL 30m (EUR 5.6m) for a five-year licence. They must also reside in Brazil, with at least one Brazilian holding a 20 per cent stake.
Gaming companies will face a 12 per cent tax rate after deductions, with unclaimed prizes going to FIES (Student Financing Fund) and FUNCAP (National Fund for Public Calamities). Bettors must be at least 18 years old, and their winnings will be taxed at 15 per cent.
This figure was adjusted after the initially proposed 30 per cent threatened to drive operators towards offshore options, like the most common Curacao licence. However, the National Congress is still deliberating some parts of the law, for example, the suggested tax exemption for prizes up to BRL 2,112 (EUR 400).
Promoting responsible gambling
One of the vital topics of the legalisation process concerns responsible gambling. Promoting and maintaining integrity in betting demands implementing regulation policies and internal controls. These measures have to not only prevent money laundering and terrorism financing but also ensure trust among all industry stakeholders, including players.
For example, the Chamber of Deputies is currently analysing a bill to prevent people from overspending on sports betting and getting into debt. The bill will limit players from spending more than 10 per cent of the amount they declared in the previous year’s income tax. Together with financial institutions, sports betting companies would be responsible for monitoring spending and enforcing the limit.
“The Chamber of Deputies is currently analysing a bill to prevent people from overspending on sports betting and getting into debt.”
Carla Dualib, regional business development manager at SOFTSWISS.
Exploring gambling trends
In the Brazilian gambling environment, establishing a solid relationship with local partners is crucial. Understanding consumer preferences and gambling behaviour is not a one-size-fits-all endeavour. The approach that proved its efficiency in Europe can be useless if not harmful in Brazil. Marketing strategies must be fine-tuned to local legislation and the cultural sensitivities of the locals. With their unique interests and backgrounds, Brazilian players become a spotlight for operators’ engagement strategies.
With its rich football culture driving the gaming industry, Brazil is experiencing a sports betting boom. This can be explained by the unique profile of local players – they tend to bet passionately, from the bottom of their hearts, placing smaller bets, unlike Europeans, who are more reserved and rational yet place bigger bets.
A typical scenario of player behaviour involves betting or playing on mobile devices on the go. Betting operators use this trend to engage the passionate audience through team sponsorships and strategic partnerships with football influencers. However, according to SOFTSWISS’ research, bingo and fishing games are catching up and becoming increasingly popular. Amid the hype for sports betting, the untapped potential of online casinos in the country stands out like a hidden treasure.
Unlocking casino potential
The key to Brazil’s gambling market success is understanding the growing demand for diverse entertainment. While football dominates the betting landscape, Brazil also has a deep affinity for casino games. Notably, 80 per cent of online gambling revenues come from casinos, not sports betting.
There are two factors explaining this figure. First of all, players are magnetised by the potential for huge payouts. But more importantly, casino operators benefit from this enthusiasm by employing proactive marketing strategies and offering engaging bonuses to attract more players.
No wonder local sports betting operators, feeling the shift in audience interests, are boldly stepping into the online casino arena. The demand for diverse entertainment options pushes companies to expand their portfolio to meet player preferences.
Maximising market bonuses
The only chance for operators to strive, not just survive, in the Brazilian gambling labyrinth is to implement a customer-centric approach. At SOFTSWISS, we realise that success demands more than cutting-edge infrastructure and tech solutions; it also requires responsive 24/7 customer support with a Portuguese-speaking team that literally and metaphorically understands player needs.
“The only chance for operators to strive, not just survive, in the Brazilian gambling labyrinth is to implement a customer-centric approach.”
Carla Dualib, regional business development manager at SOFTSWISS.
With a deep delve into the Brazilian market, SOFTSWISS, as a tech expert, aims to offer not just top-notch solutions but also business insights. Continuously exploring the market, the company is proving its scalable and innovative infrastructure can ensure stable operations even under high loads.
SOFTSWISS is actively studying the Brazilian gambling market working on partnerships to understand the environment better. The research results shared among a pool of local companies have already confirmed several business points and clarified player behaviour nuances.
In the Brazilian market that teems with potential, operators must navigate the currents of regulation, diversify their offerings, and embrace the local player specifics. The journey may be complex, but the rewards and bonuses are boundless with the right approach. As a diamond of Latin America’s gambling, Brazil awaits those who can navigate the flames without getting burnt.
