The future of online gambling in Brazil

Brazil has a long tradition of sporting superiority and this will be illustrated no more so than later this week when Rio plays host to the Olympics. Pride in this sporting pre-eminence was made evidently clear to me when I attended the Brazilian Gaming Congress (BGC) in Brasilia earlier this year.

And as well as this passion for sport, I was struck by the country’s ingrained fondness for gambling. Indeed it is a fondness that is currently sustaining a vibrant ‘grey’ market with an enthusiasm and resilience that has resisted all attempts to keep it off the stature books.

Looking around industry events in Brazil, all the names and companies you expect to see within the existing regulated markets are here. It’s not that surprising. For us in the online world, Brazil has all the attributes required for us to sit up and take notice as we search for new areas to develop.

It is a nation of 200 million people, 45% of whom have internet connectivity, and they absolutely love to wager on sports. If you do the flimsiest bit of research on their game of choice, ‘Jogo Do Bicho’, then you will realise that Brazilians like to bet.

Betting barriers

What you might not know is that in 1946, the Government banned the vast majority of gambling. However, just as their love of football does not disappear with a rare humbling defeat, Brazilian’s love of a ‘punt’ did not stop just because the Government of the day dictated it so. As history has proven time and time again, if you introduce prohibition then the activity simply moves elsewhere.

To prove that point, recent figures show that approximately 200,000 Brazilian punters leave their borders each month to mix a bit of gambling into their leisure-time activities.

Many of the headlines around gambling from Brazil show that regulators are keen to talk about the casinos and the revenues building an integrated resort can bring, but there is also a recognition that the online world needs to be brought into the fold.

Why is that? Well, the Government has calculated that 100 overseas operators are currently taking $3bn from the Brazilian economy, and with a regulated market valued at $16.8bn, there is clearly an issue to address.

Time to take action

Understandably, the Government has had enough of potential tax revenues disappearing into someone else’s pocket, and with an economy in need of an injection of support, it looks like gambling is firmly back on the agenda. Even with the country’s long history of political volatility – note the recent impeachment of their president on a charge of creative accountancy – there seems to be broad consensus towards acting sooner rather than later.

Bills are on the table, and Government officials from all sides seem to be demonstrating a willingness to cooperate to get a result. Whatever form of regulation does materialise however, there’s one thing that’s clear: player protection and anti-fraud measures are top of the agenda.

Governmental distrust of the sector is based on a well-founded perception that gambling was previously a hub for illegal money laundering, so addressing these concerns whilst ensuring players are protected will be fundamental to any laws finally coming onto the statute books.

As with all regulation it will not be straight-forward but for those recognised online operators who currently accommodate Brazilian players, it may be time to sit up and take notice.

With regulation looming, now might be the time to prepare for the future and to look at the landscape post regulation, addressing likely requirements when it comes to player verification and protection, both online and offline.

Once this is a success, the next step is to evaluate whether the wider region will take Brazil’s lead. With so much change in store, it’s a safe bet to assume Latin America is one of the markets to keep an eye on.

Peter Murray is head of gaming at identity data intelligence firm GBG