Why a clear-eyed analysis is the best approach for Latam
Despite Latin America being a huge region full of potential, Nicolás Campano, Latam sales director for Soft2Bet, highlights why it’s important to assess commercial prospects across the area’s different markets with clear foresight
How does an igaming company approach a territory like Latam? The region includes major markets like Mexico and Brazil; two giants that are also very different markets when it comes to how consumers enjoy wagering on sporting events and casino games.
Brazil is the regional giant and the potential there is substantial. It has the seventh largest economy in the world, 215 million inhabitants and its soon-to-come-into-force regulations. But, while all eyes are fixed on the country and eagerly awaiting the announcement of regulations so that licensed operators can schedule their launches, it’s worth remembering that gaming licences will cost close to BRL30m.
There will also be a raft of regulatory updates to comply with from individual states such as Paraná and Rio de Janeiro. For example:
Once the licence applications are available, operators will be granted a six-month ‘grace period’ to understand and comply with the new regulations and ensure a smooth transition to the regulated market.
The number of certification laboratories will not be limited, and the list of gaming products and technology to be tested will be effective immediately upon publication by the authorities. When it comes to payments, all financial transactions must be conducted via electronic transfers between registered accounts and the operator’s transactional account. Cash, payment slips, cheques, virtual assets, cryptocurrencies and
credit cards are not permitted, but deposits can be made using Pix (the instant payment system from the Central Bank of Brazil) and debit cards.
Operators are prohibited from offering credit to players, and are required to maintain a financial reserve of BRL5m as well as maintain separation between customers’ accounts and operational funds.
In addition to these, a number of technical and security standards were passed in May 2024 relating to the certification and compliance of operators’ systems and platforms, the location of data centres, domain names, geolocation monitoring, ID verification, bonuses, live casino games and other areas of compliance.
A 15% tax will also be applied to annual net winnings above the general income tax threshold of BRL2,259.20 instead of on each individual winning bet or net winnings per session, as planned originally.
Meanwhile, questions remain about whether interstate licences from states such as Rio or Paraná are effective throughout the whole country, while federal lawmakers will have to resolve the issue of state versus federal law coverage.
From a purely commercial perspective, it is also important to note that online sportsbooks, casinos and poker sites have been active in the market for many years already and have built up major customer databases and brand awareness, which they will leverage to the maximum in a regulated and highly competitive setting.
Mexico promise
While Brazil is attracting so much industry attention, at Soft2Bet we also feel Mexico is one of the most promising markets we have identified and are confident Mexican players will respond to the products we will provide them through our B2B partnerships. Our Motivational Engineering Gaming
Nicolás Campano
Latam sales director Soft2Bet
Nicolás Campano has eight years of experience in igaming sales and account management, with a solid track record of closing complex international deals. At Soft2Bet, he builds and develops relationships with C-level buyers, negotiates and drives sales activity, manages current territory plans and explores new markets. Campano leads the company’s B2B turnkey solutions in Latam.
Application (MEGA) gamification solution will provide players with high-quality gamified content that will see them log in to their personalised dashboards as they seek to build loyalty points through city and stadium builder features and progress through the levels to unlock rewards. These features have enabled our B2B partners to grow their monthly revenue significantly across all markets in which they operate.
MEGA has won numerous industry awards that highlight its quality and originality but, just as importantly, the product generates high engagement and drives revenue in regulated markets thanks to truly innovative features.
As the only content-led gamification engine in the market, we feel confident players will enjoy spending time engaging with the missions and challenges that will drive their rewards as they progress through the sports betting and casino loyalty levels.
With a population of 130 million, a massive football following and demand for highly localised and tailored gaming offerings, Mexico ticks all the right boxes and many of our prospective partners view the market in the same way.
Recent research from Statista reveals the market is expected to generate $2.7bn in turnover in 2024, split between online sports betting at $1.2bn and $1.5bn for online casino, and grow 7.4% per annum to $3.9bn by 2029. The Statista data also shows average revenue per user will reach $331 per player in 2024,
but one of the most interesting statistics is that the penetration of online gambling among the general population is just 6.3% currently, which suggests ample room for growth in the market.
Speed to market
At the time of writing, Soft2Bet is in conversations with a number of prospects with regard to launching in Mexico in the next few months, and with speed to market being such an important issue for operators, we are glad we can execute these rollouts within optimal timeframes. For all the promise that Latam represents, it is also important to be clear eyed in one’s approach to individual markets.
That’s how we assess our commercial goals and why we have obtained licences in more than 10 countries in the past 18 months. Our growth shows the strategy is paying off and we believe we can achieve the same strong results in Latam in the coming months.
About Soft2Bet
Soft2Bet is a leading igaming turnkey solutions provider that delivers high-quality products and services for online gambling operators. The company is known for its Motivational Engineering Gaming Application (MEGA), proven to enhance retention and engagement. Soft2Bet has deployed numerous successful igaming brands and holds more than 11 global licences.