As regulators race to complete a framework that they hope will work for all, operators in Brazil are preparing for its implementation. Sportingtech’s Chief Legal and Compliance, Simona Camilleri, believes there is much that can be done in readiness for the finishing line.
Things have moved fast in Brazil since its chamber of deputies approved the regulation of sports betting and iGaming in December. It appears to stakeholders that legislators seem keen to work at pace, with initial forecasts suggesting we could have eyes on a pretty clear regulatory framework within six months. That in turn would see the submission, review and issuing of licences in around a year to eighteen months according to my estimates. Regulators appear to be striking the right chord in terms of responsible gaming, managing payments systems to the regulated industry, enforcements against the black market, and boosting player protection capabilities up to now, though there may be some roadblocks in the way. Only time will tell what a future Brazilian market will look like, but there are several ways operators can ensure they’re primed for success when licence applications open.
Unlocking the market
To get one step ahead operators and suppliers can familiarise themselves with what is already clear in the bill and take steps to ensure they are broadly compliant. For example, its clear that facial recognition and verification of the existing player databases is going to be one of the major issues, as well as beefing up responsible gaming practices and operators commitment to the prevention of the manipulation of sports. The details of self-exclusion rules have yet to be shared, and whether they will be implemented on a per licence, brand, or platform basis and further details around this. An audit of existing tools, capabilities and processes is a must in preparation for the more detailed regulation. .
An increasingly important topic is compliance with data protection laws, particularly given the fact that data controllers and processors will be processing sensitive data (being biometric data and facial recognition), and this will have important considerations under applicable legal and security considerations for many. . Other key considerations are efficient channels for compliance, customer interaction (social responsibility measures and checks), anti-money laundering and fraud defences, and the ability to take localised payments seamlessly. When this housekeeping is in place, the product offering itself is also something that needs evaluation along with how aspects of games will be regulated or restricted, such as bonuses (sign-up or retention) and jackpots.
Tax and compliance: a balancing act
Players would prefer not to pay tax on winnings, but a 15% annual has been included in the Bill. More information will become available when ordinances are issued, as there is some uncertainty about what reporting will be required in this case, and by which party, at what juncture. It is not yet clear whether this will be the responsibility of the player, the software platform, or the operator, and whether it is levied on a withdrawal, on a winning amount, the winnings calculated at the end of a specific period, and furthermore whether amendments to income tax are rightly placed within this Bill on the regulation of gambling. Provisions which are too onerous to the player may channel them to the black market so balance is as ever, key.
Another key aspect of compliance is preventing the manipulation of sports. Operators have a part to play in stamping out match-fixing and it is incredibly important for the sustainable future of sports betting in general, and for Brazilian sports lovers. Brazilians hold their sports in high regard and are knowledgeable, and operators can help avoid issues by collaborating with the various stakeholders involved and adopting a vigilant stance to suspicious player behaviour and collusion.
Staying ahead of the curve
The differentiating factor between successes and failures in Brazil is having the ‘Brazilian touch’. Operators can ensure they are in line with regulation, but there must be attractive to customers. Brazilian customers have specific tastes, with different ways of promoting brands and sports, and celebrating their victories. A homogenous approach to Brazil will not work. The country is large and diverse, and a far more nuanced and localised approach will be required.
Operators should spend the coming months ensuring they know the Brazilian player, gain brand visibility and use local means of doing so, such as the rise of social influencers, the special Brazilian flair for living and enjoying life, and brand activation. This of course will evolve as legislation is finalised, and yet success is likely to be found within a mix of excellent marketing, a strong product with seamless UX, and local flavour, that will set operators apart from competitors in what is set to be one of the most exciting market openings in years.
