Adopted in 1889, the national slogan of Brazil is Order and Progress. 135 years later, this Republican raison d’etre is going to need to be a cornerstone of the nation’s new-look betting and gaming industry if this latest legislation is to have any hope of being a positive development for the country.
Brazil has long been thought of as the global industry’s “sleeping giant”. We used to visit the old SALEX show in Sao Paulo in the late 1990’s and early 2000’s, and next year was always going to be the breakthrough year. Well, 20 years later, it finally happened and now the giant is waking, and already being hailed as the most potentially promising prospect on the planet.
At the end of last year, the Brazilian government shook the industry to its boots when it not only finally regulated online sports betting but also, somewhat surprisingly, casino iGaming. The passage of Bill 3.626/2023 in 2018 legalised the concept of sports betting but neglected to lay down any regulations. So five years on, these regulations were finally approved following extensive debate in the Chamber of Deputies.
Getting ready for the ‘Gold Rush’
So what are we really looking at here? The top line metrics certainly provide initial encouragement. Brazil is the largest country in South America and the fifth largest in the world. It has a population of around 217 million, 88% of whom live in urban areas.
The metropolitan district of Sao Paulo is the fourth largest in the world at 22 million, and is larger than New York, at least twice the size of London, Paris or Bangkok, and over three times the size of Miami, Madrid or Toronto. It is truly massive. Rio de Janeiro is also substantially larger than most of these at 13 million, and Brazil has a further 13 cities with populations in excess of one million.
Economically, Brazil has the ninth largest GDP in the world, placing it ahead of the likes of Canada, Russia, South Korea, Australia, Spain and Saudi Arabia, to name but a few. The country also has over 80% internet penetration and 99% of the adult population have a mobile phone connection.
Finally, and may be of particular relevance as the 2024 ‘Gold Rush’ gets underway, the Brazilian Institute of Responsible Gaming has partnered with the IBIA to combat match-fixing, confirming a commitment to increased market stability.
International investment flooding in
It has been forecast that over the next three years, revenues from the Brazilian sports betting and online casino market will exceed R$100bn (over US$200m). Expected to be primarily generated through tourist visitors, this vast potential is not just one, but ‘the’, reason so many domestic and international sportsbook and online casino operators are rushing to invest in this hot, hot market.
The new legislative guidelines also very welcoming and far-sighted. Rather than seeking to scare away investment, with a fixed licence fee of R$30m (US$6m) and lower-than-expected GGR tax of just 12%, it is clear that the Brazilians want to roll out the ‘Welcome’ mat for industry investors.
Football first, foremost and forever
Like many, we believe that the most instructive test of this market’s viability will be the extent to which Brazilians embrace betting on football – or soccer, to our US readers. Football is at the very heart of Brazilian culture and for those of us from outside the country Brazil and football are forever bonded.
Whether we be 18 or 80, the millions of us who love the game of football have been excited by Brazil for almost our entire lives. The late and almost impossibly great Edson Arontes do Nascimento, better known as Pele, once said: “Brazil eats, sleeps and drinks football. It lives football.”
Some 30 years later, another global icon of the game, Cafu – otherwise known as Marcos Evangelista de Morais – added: “I am absolutely sure that whoever comes to Brazil will be mesmerized by the country.”
Well, ladies and gentlemen, one thing is certain and that is that the next couple of years will prove once and for all how right these legendary players were.
Recent research indicated that over 80% of Brazilians believe that football will be the favourite sport to bet on and it seems fairly safe to suggest that if betting on football takes off, then it can carry the entire market to prosperity. Conversely, if Brazilian football fans fail to fancy a flutter, then the entire market will forever be a minority niche. If you don’t know it yet then understand it now – football really is that important in Brazil.
Seeking out sensible solutions
With the costs of entering an entirely new market that is on the other side of the world for most, likely to be extremely high (over and above any licensing fees), our friends at Slotegrator offer an advanced solution for those with desire and commitment. Business Development Manager, Ayvar Gabidullin, says: “There is barely a Brazilian who doesn’t have access to the internet somehow, and it is highly likely they are doing so through a mobile phone,” so the opportunities to tap into this rich seam will clearly be plenty.
And despite certain people’s love of a ‘maverick’ approach, and the stereotypical image of the gambling industry, working within a regulated market, with clear and strict codes of practice and methodologies in place, brings far more security to operators and players alike, and far more credibility to those companies who play straight and to the industry as a whole.
If this wanting to do business in Brazil need to remember another thing, in addition to the national obsession with football, it is when it comes to gambling as a business, you never get a second chance to be branded as honest.
Localisation is always key
Furthermore, as Slotegrator’s media partner in Brazil and founder and CEO of iGaming Brazil, Flávio Figueiredo, emphasises, it will be essential to consider all regulations, including those related to advertising. “The forecast is that the projected numbers will grow even more with a regulated market and aggressive advertising.”
As a result, the new regulatory framework includes rules for communication, promotion and marketing, covering the compulsory incorporation of alerts regarding the hazards of promoted activities, a ban on deceptive promotion, endorsement of unlicensed trademarks, or inaccurate advantages and the clear prohibition of directing advertising towards minors, with requirements for appropriate age group identification.
Companies entering the market will need to evaluate the clarity and comprehensiveness of the regulatory framework and examine the effectiveness of the national supervisory body and its sub-divisions, assessing their capabilities in monitoring, preventing money laundering, ensuring compliance and promoting responsible gambling. The effectiveness of the partnership between the Ministry of Sports and the new gambling regulator will be crucial for safeguarding sporting integrity, and its effectiveness will impact the overall success of the regulatory framework.
Embracing the bigger picture
The successful establishment and growth of this exciting market will very much depend on effective implementation, ongoing monitoring and adaptability to challenges that may arise as the situation evolves. The government is banking on positive and sustainable economic impact, including tax revenues and job creation, coupled with proactive self-management of responsible gaming policies and education. These are the reasons they have passed the new laws, and not so that ambitious entrepreneurs can get rich. Those who play it straight from the start, and are smart enough to see the bigger picture, will ultimately be the winners.
Slotegrator experts recommend paying attention to the necessity of educating the Brazilian population about how the market is developing, what can and cannot be done, so that the market gets it right from the start. Order and Progress will go hand-in-hand, and betting and gaming in Brazil will be as those who know the country would expect – “emocionante pra caramba!”
