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In the rapidly evolving Latin American gambling market, one country – Brazil – has taken the lead as the dominant force, drawing widespread industry interest and setting a precedent others may follow.
Amid the excitement sweeping the sector, Charmaine Hogan, Global Head of Government Relations at Playtech, urges a measured approach. For one, gambling can be an emotive subject for many, from politicians to the public at large. She highlights the potential negative impact of additional legislative measures, especially so shortly after market launch, warning that their effects could be far-reaching across the industry.
“At the moment, everyone is still finding their feet – as you do in a newly regulated market,” she begins, with this spreading from suppliers and operators right through to the regulatory authority itself.
“For newly regulated markets there are lessons to be learned; the different products together with fiscal implications, as well as enforcement. The relevant authorities must grapple with the realities of licensing and supervision.
Against a backdrop of expectations of unavoidable M&A and market saturation, due to the sheer number of licensees, comes talk of the industry being presented with opportunities to proactively act before being shackled. Optimally, this would be unified industry initiatives, not dissimilar to the recent response when confronted with the reality of a possible hike in the tax burden.
“As an industry we can really capitalise and see responsible gambling as an opportunity”
“There continues to be a lot of proposals around advertising and consumer protection, which is fine.” Hogan comments. At the same time, on the one hand, it can still feel like having to decide who’s doing what, the regulator, the minister, the legislature. That said, locked into primary legislation, this makes it nearly impossible for the regulator to address market challenges as these arise.
Yet it’s also about keeping those efforts in check, to ensure balance between what approach will genuinely protect players. There are, unfortunately, a number of regulated markets that have taken a very restrictive approach, with the players ultimately losing out. Despite being the ones the regulations should be aiming to safeguard.
“As an industry we can really capitalise and see responsible gambling as an opportunity, as a competitive advantage. Linked to that is the behaviour of the industry in the market across all advertising platforms, including the social media space.”
But what does this opportunity comprise? For Hogan, this centres around decisive action being taken before the powers feel compelled to take action themselves.
This comes despite a self-confessed expectation that Brazil is not, and will never be, afforded the title of being a settled market.
“In Brazil right now there’s a suite of bills in Congress on a number of issues, whether it’s to improve on match mixing or more of a clampdown on the sector,” Hogan says.
“But what the industry can do, proactively, is show that we can do better for the players because, at the end of the day, you want to keep them in the legal market. It should be in the interest of the operator and authorities to get it right. The industry can strive to work better across the relevant stakeholders, and that involves for instance academia and researchers.
“When it comes to products, regulators need to take a more nuanced view of individual verticals”
“There is an illegal presence in Brazil, which the authorities are trying to clamp down on. This should be a top priority, operators, players and the State are losing out otherwise. The legal operators have invested significantly in this regulated market”, she says.
“According to our latest Responsible Gambling Report, the regulation has increased confidence in the betting industry in Brazil, with only 25% of the respondents avoiding betting due to concerns about fraud and addiction. In the country, ensuring a platform is legal and properly registered emerged as the most important factor for a safe experience for 59% of Brazilians”.
Hogan adds, the illegal presence is quite rightly a worry for operators and authorities for a number of reasons, and the authorities need to understand the drivers and the problems, so as to better address the channelisation goals. That goal is for players to play on the legal website’s.
“For an operator, it comes down to a loss of revenue if there’s half the market that represents legal operators, with a significant number of players not channelled into the legal market,” she explains.
“When it comes to products, regulators need to take a more nuanced view of individual verticals. It’s not just about offering competitive odds or a wide range of options – it’s also about ensuring the experience is genuinely enjoyable. For instance, how regulations affect the design and appeal of casino games can significantly influence player engagement.
“Our guiding principle is that players should have fun in a safe, well-regulated environment. That’s why giving players the information they need to make informed choices and robust player monitoring are so important. Notably, Brazil’s regulatory framework already incorporates both of these elements, which is a strong foundation for safer gambling.
“A safer environment can’t be built by one party alone – it requires a collective effort across the ecosystem. That’s why we’re committed to developing technology that’s not only safe, but also entertaining because we believe the two must go hand in hand.”
“With the current discussions on increased tax burdens, the cost of doing business would be impacted”
“Another consideration, if you look at the regulations, for the registration onboarding steps, there’s a lot that a consumer needs to do before they are registered and can start to play. Yet it’s about striking the right balance in my mind. After all, illegal websites are never far away.”
As the value of acquisition and retention rises, Hogan cites that broader regulatory objectives, such as combating match fixing and money laundering, can be achieved without imposing excessive restrictions.
There could otherwise be negative impacts, like limiting innovation on the market, which potentially is more to the benefit of illegal operators, they gain from a weakened legal market..
“With the current discussions on increased tax burdens, the cost of doing business would be impacted, as well as business strategies needing to be reworked for the market,” Hogan continues. “It’s already quite a high-cost market.
“Where you need to adapt a whole product suite to better suit the market, where there are frequent changes being required for whatever reasons, possible considerations might be whether to do that across all product verticals’ Again, in that scenario, should there be less new games coming to market, it would be player safety that loses out ultimately.
“In a digital world players know new games and new features coming out. They know what’s out there and they want to enjoy that. You probably want to avoid a negative impact on innovation.”
As the largest and most populous nation in the region, the reverberations of any actions being taken within Brazil could be widespread, and impactful.
With the continent watching on to see how the landscape could alter in 2025 and further on, Hogan points out that regulated jurisdictions in the region will be closely watching.
“If Brazil opted for draconian measures, I am pretty sure that other neighbouring countries could get inspired”
“If you look at Colombia, I’m not necessarily saying it’s a bad thing, but they have revised their regulations and they’ve enhanced their player protection approach,” she explained. “Yet, they’ve also introduced VAT”.
“However, Peru is also a newly regulated market, just like Brazil. On the tax front, they are taking a more operator and investor friendly approach in Peru. They revised the tax base of their consumption tax, and in that sense have listened to the industry of the potential repercussions to the market.
“In contrast, in Brazil, which already has a high tax burden in place, a potential GGR increase to 18% is on the table.”
On responsible gambling, which is in the spotlight in Brazil, if it had to take an approach more akin to some European markets in terms of blanket approaches like capped financial and time limits for players is that a good thing?
“To me, it is one of those where it reads like a good policy approach, on paper. But we are all different as individuals, and rather than treating all players the same, today we can better use data and technology. In that sense, utilising behavioural analytics solutions.
Actually, Brazil’s gambling legislation caters for this, and that is a good thing. Importantly, this has to be rolled out efficiently, and that’s probably in the interest of operators to be more than just borderline compliance.
“If Brazil opted for draconian measures, I am pretty sure that other neighbouring countries could get inspired” Whether already regulated or looking to regulate the online sector.
