Why Brazil can be the biggest gambling market in the world

Why Brazil can be the biggest gambling market in the world

Miguel Quesada, business development and reactivation manager at online casino brand Mr Green, says Brazil has the potential to be the biggest regulated market in the world by tapping into its rich demographics and learning from the experiences of other jurisdictions.

Despite the fact that the internet has been with us for over two decades, but it is still evolving quickly and transforming our communications, our jobs, and our lives.

The internet is fast creating a new ecosystem in the world; a digital revolution. Economic sectors are changing dramatically and going digital, with many sectors turned on their heads, such as tourism (online booking), retail (e-commerce), and media (online news and video).

One of the big areas to be transformed by the internet is entertainment and it has also changed how people consume the product. They now require interactive and on-demand activity and those that don’t provide it will struggle.

Online gaming is part of interactive entertainment, and is one of the fastest growing and dynamic industries which is why it fits so well into the Brazilian mindset. I believe Brazil can be the biggest regulated country in the world; a developed community of +200 million inhabitants with a great future.

The coming of the Millennials

Imagine what the digital landscape will look like when the first digitally native generation, which grew up with access to the online world and to mobile devices, make their own digital revolution. The Brazilian young generation is participating intensively in this process. For example according to wearesocial.sg, in the Latin American region social media has one of the world’s highest penetration, including daily time spent on Facebook and other social networks.

Marketing is developing fast on the digital platform and there are new tools that allow this continuous evolution, such as big data, programmatic, retargeting, platforms, CRM systems, etc.

For the internet industry, the classic structure of borders and jurisdictions are becoming less and less important. Instead, the profiling of different cohorts and the tracking of activities are being made globally, regardless the country or residence of the users. Brazil is collaborating in this, as millions of Brazilians are being profiled and tracked by global companies using internet tools. Localisation is less important; technology is the key factor.

The digital revolution is also creating a digital economy. Nowadays, it is possible for companies with just 80 employees to reach a higher capitalisation and market value than old large multinational companies. There is a new knowledge and new technology that makes this possible.

The word economy has been defined as the science of expectations. Investors view knowledge as the main asset to ensure the future of a company. Brazil has a unique opportunity to collaborate in this process. Online gaming can provide some of the keys.

The advantages of taking regulatory advice

Brazil has the opportunity the produce the best modern regulation, taking advantage of learning and successful experiences in the world. Extracting knowhow from other jurisdictions, such as Malta, could provide it with a leap-frog of years of experience and fine tuning.

I believe the advantages to this approach are clear:

  1. It is much quicker to get up and running
  2. Law makers can avoid mistakes that the industry has gone through already
  3. Making it easier for already established gaming operators to work in Brazil, because they can re-use their existing compliance processes and systems. This in turn will maximize tax revenues.

We can increase the possibilities of the new regulation to succeed, by introducing the concept: “The Rule of ONE”. This means ‘keep it simple to make it happen’.

It also means having clear, structured and effective regulation. Therefore:

  • ONE Jurisdiction at a national level (Brazil… not the estados, or the munícipes)
  • ONE Regulator (One single institute, One single office)
  • ONE Licence (for all online games, not a windows system)
  • ONE Tax Model (for all online games)

Any initiative of regulation should aim at avoiding the most common risks. This includes things such as a high level of tax on remote gaming – we’ve seen elsewhere that any figure higher than 15-20% on net game win is not affordable for online operators.

Regulators need to be mindful not to impose ineffectual restrictions on operators to protect players because they’ve not correctly understood how to protect players. Other unnecessary restrictions would also need to be avoided, such as any obligation of local hosting of servers in the country; this is against all online industry, and goes against new cloud based systems and technology. Also requiring each new game to have a new individual licence would likely kill any innovation – the bureaucracy caused by a ‘windows licensing system' would be just impossible.

Since launching in 2008, Mr Green has proven that one operator can be successful by specialising in one single game category, be it a casino-only operator or bingo-only operations. In the wider industry there are different strategies and experiences when it comes to game types, which can all be right and successful despite their differences. Operators are offering different combinations of games and different vertical options, some more successfully than others.

But it shouldn’t be down to the laws to dictate what approach companies take by restricting game types. In fact, this decision is more related to the business and marketing strategy of the operator, and should not be not dependent on the regulation model.

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