Soft2Bet – exploring the potential of the Latin American igaming market
Soft2Bet’s Senior B2B Business Development Manager, Eduardo Morales, analyses the potential of the Latin American market.
Opinion.- Latin America is home to a host of vibrant countries, some of which are of impressive stature in iGaming. The size of markets like Brazil and Mexico means that there will always be potential for companies to find success there. Meanwhile, jurisdictions like Argentina, Chile, Colombia and Peru offer favourable competitive environments, ones that can combat the big “six”.
Naturally, there are those that are less developed, but even these could become highly promising down the line. This mostly depends on the country’s economic stability and regulatory environment – if these two factors merge at the right time with the right telecoms and payment processing options accompanying them, countries like Venezuela, Ecuador and Uruguay would offer a formidable degree of potential to operators and suppliers alike.
That being said, the advances around regulation have been slow among the more promising countries, with only Colombia, and more recently Argentina and Brazil, moving forward. The biggest advances have been seen in terms of the social acceptance of digital commerce and the use of alternative payment methods. Also, the Covid-19 crisis seems to have accelerated the transition towards online and served as a “wake-up call” for countries to introduce iGaming regulations soon.
The Brazilian market has garnered the interest of several companies and is a great example of how difficult unintuitive legislation can make it for operators. It’s by far the largest market in Latin America, where so far, only sports betting seems to be moving towards a regulated environment, while the “logo do bicho” (animal game) illegal retail market arguably still holds the biggest opportunity. As a result, it would be favourable to regulate all games and both channels from the off. Otherwise, the market is going to be launched on a small version of itself: extremely competitive and very expensive to run. However, no operator would want to miss the chance to be one of the first, as some companies are already doing at the pre-regulation stage.
Complex regulatory statuses have led some countries to prohibit gambling, with some remaining unregulated but not actively banned gambling. Meanwhile, places like Argentina are regulating on a province-by-province basis. Therefore, in order to target the best opportunities, the landscape must be explored case-by-case, country by country and partner by partner. In essence, the focus needs to be on quality rather than quantity. By analysing the existing options very carefully and understanding the long-term nature of business, choosing the best local alliance and maximising the existing company’s offering can be more effective from a profitability or ROI standpoint.
“In order to target the best opportunities, the landscape must be explored case-by-case, country by country and partner by partner.”
Eduardo Morales, senior B2B business development manager at Soft2Bet.
With Brazil’s fanatical football following and the World Cup edging ever closer, it would be ideal to have workable sports betting legislation in Brazil before the tournament begins, which is certainly possible. However, it’s very doubtful with national elections coming up before the end of the year; in any case, it will be extremely challenging from both a regulatory standpoint and in terms of companies arriving on time. The main challenge from the market’s productivity perspective will be the limited product offering, as well as the highly competitive and expensive branding positioning from the start. A more complete product regulation would have been the better option; as the retail activity will benefit heavily and thrive across Latin America.
In the region, sports should evolve into more local specialisation and esports development. Casino, meanwhile, should gain more weight in terms of product vertical vs sports. We should see some local companies offering more dedicated local content, especially on the “live” subcategory, with certain games almost crossing the line from casino to lotto products.
It would be in Latin America’s best interest to have a majority of its countries regulated within the next five years. With either semi-regulated or unregulated markets still functioning without much control, players are not being protected and these countries’ economies aren’t enjoying the tax benefits regulations would provide. Once a solid regulatory foundation has been laid out, we can start exploring the opportunities this vibrant continent has to offer.
“It would be in Latin America’s best interest to have a majority of its countries regulated within the next five years.”
Eduardo Morales, senior B2B business development manager at Soft2Bet.
However, the social and mobile elements are more key in Latin America- the continent should be considered but it’s equally important to consider how it’s reached and how it becomes viral and trusted (and, obviously, paid for). Therefore, innovations in marketing, PSP’s and channelling of the offering is as important as the offer itself. Last but not least, operators should be looking for rich gamification content – which is engaging, entertaining and differentiated.
A region with so much potential will naturally bring with it a tonne of competition. Fortunately, Soft2Bet can stand apart from its rivals. Our company has a unique perspective of the business being done there, and where the right partnerships are key. This grants us the opportunity to maximise the potential that our cutting-edge technology platform has to offer. It gives our great CRM team and gamification tools the chance to go one step beyond and allow our games and PSP’s to target the right audience with the right product. Our approach to markets is the same as with our partners: fine-tuned, dedicated, and very much one-to-one. This sets us apart and will surely see us succeed in LatAm markets in the months to come.
