Spotlight on Booming Brazil: With Betsson’s Andre Gelfi

From sleeping giant to giant awakened, Brazil, the largest addressable market in Latin America, continues to evoke both fear and fantasy in the world of iGaming and wider gambling.

After labyrinthine political scheming, online sports betting, for so long a nefarious off-shore activity in this vast sports-mad nation of 217.6 million people, has finally been legalised and regulated. But retail casino gambling remains outside the law and exact terms of payments, licences and taxes for iGaming are still to be accurately determined.

So when we turn the spotlight on Brazil, who better to talk to than Andre Gelfi – “the man with two hats”, and both of them worn with style.

For Andre is both the Founder and current President of the Brazilian Institute for Responsible Gambling and the Betsson Group’s Managing Partner for Brazil.

Andre was delighted to take us through his recent starring gig on the Panel of the SBC Rio summit and discuss the prospects and challenges of a super-charged Brazilian gambling market, surging at nine percent growth and tipped to be worth in the region of US$2 billion this year 2024.

We began by asking him:
You attended the SBC Summit Rio. With so many different gaming industry shows happening throughout the year, why was it so important for you to participate in this one?

“SBC Rio concentrates specifically on the Brazilian market, which we are all keenly focused on. Being at SBC Rio is very effective for meeting stakeholders and regulators. As the sole focus is Brazil, it brings together all the key components to discuss how the market will develop post-regulation.

“The timing of the summit was also very convenient, as we’re expecting the details of the infra regulation in the upcoming weeks. Some issues are still to be decided and the whole regulation structure must be defined for the businesses and investments to be properly drafted.

“At SBC, we raised attention to these matters, so it was very productive.”

Everybody is excited about Brazil and the expansion opportunities that it offers. What are the true growth drivers for this market? What aspects of the industry are showing the most promise?

“Brazil’s demographics, penetration, sports scene, entertainment and culture are unquestionable. Plus, no established land-based competition exists, and the payments industry is super well-developed. Transacting on betting is a seamless experience. All of this is conducive to the operators’ value proposition.

“We already have a market, and the data confirms it. I don’t know if you’ve had the chance to look at the latest study from IBIA. Brazil’s market is number three, and the US is number two. In reality, Brazil’s market probably places fourth, based just on the offshore market, which is already in operation.

“Onshoring is the challenge, and we’re making great progress.

“From a regulatory stance, we still have some points to address, such as the taxes on winnings and the games that will be available in this market. These are still to be defined and critical matters regarding the market’s channelling potential. We are pretty much following the daily discussions on what implementation is going to look like. This is critical to the entire process at the end of the day.

“The potential reflected in the report is not a potential. It’s a reality.

“As I said, this study ratifies fresh numbers from H2 Gambling Capital. The market is already established, and Brazil has achieved it without regulation. With regulation, we’ll see proper conditions and big changes with more visibility on the regulatory front.”

You participated in a panel session at the SBC Summit Rio conference. What did you and your panel discuss, and what did your attendees learn?

“During the panel discussion at SBC, we discussed the challenges and the next steps on the regulatory front. The discussion emphasised the critical importance of having clear tax definitions.

“In Brazil, the meanings of taxes are still undefined and must be clarified. We also need clarity on the gains from fixed thoughts termination that will be allowed, as well as the shareholding structure and the 20 percent Brazilian requirement in the law. We are expecting to hear from the regulators sooner rather than later.

“We also explored the challenges regarding Responsible Gaming and responsible advertising. Ensuring the market is sustainable and balanced with society’s and the government’s needs is important. This will make everyone happy and comfortable.”

What does the future hold for Betsson in Brazil? How do you plan to get enough exposure for your brand to outperform your competitors?

“Well, this is a very good question – the secret sauce. I’m afraid I won’t be able to share it with you.

“But conceptually, what we can tell you is that we see this market somehow hyped at this moment, and we should not go crazy because I think the regulation’s going to be a new scenario; we need to understand it and build it from the bottom upwards.

“The biggest challenge lies in quickly understanding the market and setting up operations locally while building a strong value proposition, including the brand.

“This is a major challenge today as marketing assets, such as properties, are overpriced. It will be difficult for any operator, including us, to position ourselves reasonably and sensibly.”

Editor’s Note:

Under Andre Gelfi’s strong leadership, Betsson is gearing up to take on Brazil’s iGaming market.

But the market, argues Gelfi in this fascinating conversation with iGF and its readers, may very well be over-hyped – and over-priced.

Nevertheless, because of its size, wealth and history, Brazil remains an essential territory for any iGaming company looking to establish and expand in Latin America.

The main opportunity is to offer seamless onshoring strategies to consumers who are already spending, argues Andre.

But just be aware of the ongoing lack of legal clarity, and still greatly undefined regulatory infrastructure.