Latin American opportunities caught a lot of attention towards the close of last year when Brazil’s so-near-yet-so-far betting regulation story caught the headlines. However, European companies interested in the sector may have a few things to consider.
Sharing his insights from the perspective of a North Europe-founded company which recently took its latest big step on its Latin America roadmap, Coolbet President Endre Nesset spoke to SBC Media’s New World Opportunity series.
The two step strategy for a LatAm rollout
Coolbet’s story began in ‘the usual suspect markets’ of Northern Europe, Nesset explained, and after building up a solid foundation began to explore potential further afield.
“A majority of the South American markets have been close to regulating for many years, and you don’t want to launch just before it regulates,” he explained. “We thought ‘let’s do it our way’ in Chile with our sportsbook.”
This sportsbook has been the focal point of Coolbet’s Latin American strategy – Nesset expressed particular pride in this aspect of the firm’s operations, noting a high proportion of sportsbook bettors against casino players.
In the still-developing markets of South America, this sports-centric attitude has enabled the firm to capitalise on certain niches, such as offering markets on Chile’s popular Segunda División.
“One of our strengths is that our success markets are sports-led, and we are a sports-led brand in all means,” Nesset continued. “Our aggressiveness on the odds is our USP and is a key part of our marketing strategy.
“The Coolbet playbook is to do due diligence on the market, see the sporting interests and identify what is popular and what needs covering. If there were some niche events, we would factor that heavily into our marketing.
“There is a two step strategy – one is that we are sports driven, that has been our approach in every market. We go in with local knowledge and offer odds on existing markets and leagues and try to set the new standard.
“On markets that don’t exist, where we think there is room, we take ownership. For example in Ecuador, there is very poor in-play offering on domestic leagues. We have the ability to do it inhouse as a standout factor. We are raising the bar on the education of punters.”
The second element of the firm’s ‘two-step strategy’ revolves around education of the local player base, something achieved through effective marketing and transparent operations.
Examining the firm’s original markets in Europe – such as Norway, Sweden, Estonia, Iceland and Finland – Nesset reflected ‘gambling has been a big part of the culture for a long time’.
In comparison, Latin American markets have needed more player education, and Coolbet’s President emphasised the need for transparency at the heart of this, noting that ‘there is always a lot of luck involved, but to a large extent we made our own look’.
He added: “Our playbook is to really start focusing on the offering, bringing a new transparency and being very open about what we do. We have transparency functionalities that customers really like and appreciate.
“There were a lot of low value customers, and a lot of education was needed. We now see that players are catching up very quickly, similar to what has been seen in the US, with more demand for in-play cash out and advanced bet builders.”
Following regulation on the LatAm roadmap
In Coolbet’s experience, the firm has been able to apply more lessons from Europe to Latin American than vice versa, but that is not to say that a cut-and-paste attitude will work out smoothly.
“If you look back at Coolbet and our operations in Northern Europe, these set us up for success in Latin America. We perfected and optimised our strategy, learned from our mistakes in Europe and really found our niche.
“We’ve always been a sportsbook, and we’ve tried some things that worked well in some places, and others didn’t. We made mistakes in some markets early, and when we pushed into Latin America we were in a good spot.”
For the most part, in Nesset’s experience of transatlantic trade, the majority of lessons for Coolbet have been applied from the Old World to the New, not the other way around.
The brand was able to develop its base in Europe and formulate a ‘proven concept’ for Latin America – although this does not mean that there were no lessons to take on board once landfall was achieved.
Challenging regulatory conditions are a common talking point in South American betting business, as Nesset noted: “We have done well in some, very well in some particular ones, and there is a lot of talk about regulation.
“In all our existing markets we will defend our positions and go for regulation, but we will never go for black markets. We will follow the regulation or withdraw.
As noted earlier, although Latin American betting was behind Europe in many ways when Coolbet first entered the market, the firm has witnessed an advancement both in terms of customer preferences and technology.
For example, Nesset explained that South American bettors have ‘skipped the laptop and desktop phase’ which defined Europe’s early retail to digital transition, and now mobile wagering has cemented its place at the forefront.
“That has been an area we have really pushed forward in, having a responsible website and app with good UX,” he said.
“Our mobile app is not too ‘cluttered’ it is simple and easy to understand – this is key. The market is tightening, and maybe we have to be more aggressive in what we can offer. In the beginning it was mainly 1×2 outright and over/under betting, but there are now more niche markets.”
Early days on Coolbet’s Mexican mission
In the early days, Peru proved to be a more challenging market for Coolbet than Chile, although both have proven to be successful plays for the company before it began to probe prospects further north in Mexico.
Using its ‘two-step strategy’, Coolbet was able to consolidate a strong position its initial two territories – although Nesset did joke that the brand’s Polar Bear logo may have played a part, laughing ‘maybe people find it funny in the hotter climates!’
He elaborated: “When we launched in Peru we had a similar approach to Chile, but it was definitely trickier. There was a lot more bonus abuse, there were more syndicates, and that is still to some extent a challenge today.
“We’ve grown nicely and we really welcome the regulation. Almost all the Latin American countries are supposed to regulate next year.”
With the southern half of the region examining regulatory prospects, Mexico is the latest market to stand out on Coolbet’s roadmap, and in January this year the firm commenced operations in the country.
Evaluating the country with the same lens as Chile, Ecuador and Peru, Coolbet concluded that factors such as metrics and population penetration made Mexico ‘one of the top markets on the list’.
“There is no guarantee of success, but we are going to give it a crack! We have our office and local knowledge on the ground and couldn’t’ be more excited,” Nesset continued.
“Our marketing strategy is to offer what is popular, focusing on Mexicans playing abroad like in the Premier League, Mexican boxers and UFC fighters. They are very proud people and very passionate.
“It’s not rocket science, but it is more difficult than people might think. We are fortunate enough to have our own tech stack and experts and localised traders, to be consistent and pull that through.”
Starting with a soft launch prior to the Super Bowl – a popular sporting event among Mexican bettors – Coolbet hopes to ‘build some good momentum’ via its tried and tested Latin American strategy.
Concluding his assessment of Coolbet’s latest LatAam launch, Nesset noted that a key difference has been that unlike its earlier ventures, the firm has moved in with a local partner due to the local regulations.
“When you have a local partner you really have to adapt – there are differences in work, in culture etc to overcome. Luckily due to our local approach, this goes as smoothly as possible.”