Brazil & the Netherlands: a regulatory fallout

Despite possessing a vast array of opportunities, the journey towards legalisation and the period that has followed this landmark date in Brazil has been anything but plain sailing.

In the culminating edition of a three-part SBC Media special, Cacaniqueisonline Chief Operation Officer, Christian Lowe, addressed this delayed process, in addition to elaborating regulatory restrictions and how the coming year could play out within the country.

However, attention is also diverted elsewhere, notably the Dutch online gaming ecosystem. Here, he touches on any potential comparisons between the two, and also issues a stark black market warning to the country. 

SBC News: The path to regulation was one long trodden within Brazil. How would you assess your initial expectations versus the reality of the legalised marketplace?

Christian Lowe: The process has been much slower than expected. The regulation was approved but the licensing framework took much longer to finalise. Taxation rules and compliance guidelines have been adjusted several times, and this has created a lot of uncertainty especially for operators. 

Unlicensed operators are still dominant as many are waiting for full clarity before deciding if they will apply for a license or not. I also think that the government focused too much on online betting in relation to online casino and slot machines.

I also expected a much more crowded market. But so far old brands with high market share are still dominating the market as there are less new entries because of the higher licensing cost then anticipated. Also, the bonus restrictions were much stricter than expected. 

SBCN: Brazil has implemented a series of stringent regulatory restrictions. Have found that these have hampered yours, or operators’, ability to progress in any way? Has this resulted in a shift in how you operate compared to other jurisdictions?

CL: I think the stricter regulations and higher licensing costs than anticipated has resulted in fewer operators entering the market. This has a direct impact on us as affiliates as we have a much thinner selection of operators to work with. 

The channelisation to regulated operators will be lower than expected and the black unlicensed market will thrive.  We will see how the market develops going forward and we still put Brazil as a top priority market internally, but it is very demotivating to see other affiliates promoting unlicensed operators with promotions not allowed by the regulation. 

SBCN: How do you envisage the next 12 months playing out? Could public backlash to a legalised ecosystem ramp up and cause any changes to legislation, such as increased ad restrictions or tax increases, being implemented?

CL: I think the government already set the bar very high with the existing restrictions and I would be very surprised if we would see further increases to the current ones. Such changes I believe would lead to a huge surge in the market share of unlicensed operators. 

I believe that they might ease the restrictions a bit during 2025 as I believe the regulator is a bit disappointed with the current turnout of license applications. 

There is obviously the risk of public scrutiny now that gambling is ‘mainstream’ under a licensed framework and negative media coverage will increase. So there is still a lot of uncertainty.

SBCN: You also have the GokkastenOnline entity within the Netherlands. Are there any similarities between these two or any other sites within the country’s umbrella?

CL: Both sites cater for the audience that likes online casino and especially free to play slot machines. The platforms also operate on the same engine behind the hood, that is a big similarity. 

But each of the sites has been tailored to the unique regulatory, cultural and player behaviour characteristics of each market.

SBCN: The Netherlands has certainly not been immune to changes in regulation, and more could be just over the horizon. How do you see the country’s online gambling future panning out? How will this affect yourselves?

CL: Netherlands has one of the strictest advertisement and marketing restrictions. Almost all advertisement channels are banned. 

It is not forbidden to market licensed online operators on affiliate websites and with the limited operator options for marketing, the affiliates become a very important part of their marketing channels.  

This has of course been of a big benefit for us even though the share of black market has been very big, and that is obviously not beneficial to the licensing regime as a whole.