Ep 349: Brazil’s X ban: What are the implications for the gaming and affiliate marketing industries?

Earlier this month, X, formerly Twiter, was banned in Brazil after failing to meet a deadline set by a Supreme Court judge to name a new legal representative in the country. The row between Brazil and X initially began in April when the platform, and its founder Elon Musk, refused to follow a judge’s ruling to suspend dozens of X accounts for allegedly spreading disinformation. 

And this will be the topic for the latest episode of iGaming Daily, supported by Optimove. Host Joe Streeter, Editor of Casinobeats, is joined by Fernando Noodt and Isadora Marcante from the SBC Noticias team to delve deeper into the implications of Brazil’s X prohibition.

The trio discuss the significance of the ban, X’s current role in gambling advertising and how this may change following the ban, as well as what this means for the future of social media marketing across other platforms.

Finally, they consider how the ban will impact the growth of the Brazilian gaming landscape given that we are now just months away from the opening of the regulated online gaming market in the country.

To read more about what was discussed in today's episode, click on the following links:

- https://sbcnews.co.uk/affiliatenews/2024/09/05/x-ex-channel-for-affiliates/

- https://casinobeats.com/2024/09/05/brazils-x-ban-branded-outrageous-as-warning-issued-to-gambling-sector/

- https://sbcnoticias.com/br/implicacoes-proibicao-do-twitter-marketing-esportivo-brasil/

Host: Joe Streeter
Guests: Isadora Marcante & Fernando Noodt
Producer: Anaya McDonald
Editor: James Ross

Remember to check out Optimove at https://hubs.la/Q02gLC5L0 or go to Optimove.com/sbc to get your first month free when buying the industry's leading customer-loyalty service.

Creators & Guests

Guest

Isadora Marcante

Sports Business Journalist & Founder of the Online Academy iGA ⚽️

Guest

Joe Streeter

Editor of Insider Sport and Payment Expert

What is iGaming Daily?

A daily podcast delving into the biggest stories of the day throughout the sports betting and igaming sector.

Good afternoon and welcome to the iGaming Daily
brought to you by Optimove, the number one

CRM solution for the iGaming market. And before
we get into today's episode, I want to pay

tribute to one of our speakers at the SBC Summit
who at the weekend captured UFC gold, Mirab

Daravishvili, beat Sugar Sean O'Malley in what
was just a crazy innovative event at the Sphere

in Las Vegas. Yeah, he defied the odds and he
will be coming to the SBC Summit in Lisbon.

as the king of the UFC's bantamweight division.
So very exciting as if the event couldn't get

any more prestigious and alluring UFC gold adds
to the card on next week in Lisbon. And I'm

joined today by Fernando and Isadora from our
Latin American team. Guys, how are you both

doing? Looking forward to next week, Fernando?
Yeah, yeah, very excited. I'll be looking from

the sidelines, unfortunately, but I'll be really,
really into the event and then all that develops

in Lisbon. So I hope everybody gets to enjoy
one of our or the biggest event the company

has done so far and the greatest show in gaming.
So make sure you go to Lisbon next week and

join everybody there. I'm really excited of
what the event is going to be. So yeah. Fantastic.

And Isadora making the journey over, right?
Yep. Yeah, I'm making it. I'm going to be traveling

on Saturday next week. So I'm really excited
to be there. It's my first time in Lisbon too.

So yeah, it will be like Fer said, it's going
to be like, from what we could see, like the

biggest event of the industry. So it's exciting.
It's a bit nervous as well because it was going

to be big, it's like 100,000 square meters and
more than 25 people. So it's a lot of people

and a lot of space. But yeah, I'm really happy
and excited to be there. Yeah. And it sets

a middle backdrop of a really beautiful city
in Lisbon as well. So yeah, very exciting.

But on to today's discussion is, yeah, the banning
of Twitter. It's a really interesting one.

You know, I spoke about it with on the affiliate
day two weeks ago last week. And yeah, really

has just caused a really emotive response this
one. Can you just give us an introduction of

how we got here? And yeah, what kind of who
made this decision and what led to the making

this decision? Okay, so like, just to make it
simple, because it's a bit complicated, but

like, just to make it simple. What happened
was that Alexandre Jimorais, or Supreme Court

Judge, determined that X should actually ban
some profiles in, I cannot say X, I'm going

to say Twitter, some profiles on Twitter from
people that were being investigated by our

Supreme Court judges. But they were all people
that were clearly against the current government.

So Elon Musk actually said that he wouldn't...
block these people because this is censorship.

This is not freedom of speech. And the reason
why he bought Twitter and turning it into X

was to, um, that's what he said, to, to protect
freedom of speech. So, because a lot of profilers

were being shut down in Brazil and, uh, Elon
Musk didn't, uh, no, Alixandro de Moraes really

didn't like that. So he said that he was going
to arrest the reps of Twitter in Brazil. Elon

Musk, in order to protect the employees decided
to shut down the office in Brazil. So Twitter

didn't have a legal representative in Brazil.
And then Elon Musk decided to... Elon Musk,

no. Javier Santos de Moraes decided to ban Twitter
in Brazil. That was basically what happened.

Am I correct in thinking Marais gave them the
company run by Elon Musk, an ultimatum that

they need to hire somebody for this role before
a certain day or Twitter will be outlawed in

Brazil and he didn't do that? Yeah, exactly.
They said that he needed to point out a person

to be the legal representative in Brazil. Elon
Musk didn't do it. So here we are right now,

no Twitter access. Wow, yeah, quite crazy, especially
when you give the scale of Twitter in Brazil.

And just really quickly, just to kind of, you
know, get some insight into something you just

said there, the profiles that were under investigation,
what were those investigations about? Well,

it's a bit weird because they say, look, what's
happening in Brazil right now, it's a bit complicated

because they say that they were being investigated
for sharing misinformation like fake news.

But we don't have this crime in Brazil. It's
not a crime to share fake news. It's not a

crime to lie. So we don't have a crime of opinion
as well. And we have some deputies that are

arrested until now are in jail because of a
crime of opinion. And they use the argument

that is a hate crime, actually. It's a hate
speech. Or it's a speech that leads to hate.

That's why they should be arrested or they should
be blocked. But when you see actually some

of the tweets, it's only their opinion about
certain things that, okay, it could be sometimes

it has like an aggressive tone, the message
when you read, but it's not like a hate speech.

It's not a speech that it's a hate or anything
like that. So it's just like, it's going crazy

because we don't actually know what they're
being accused of. Okay. I guess the other side

of that would be, and I haven't seen the tweets,
but the other side of that... maybe that type

of thing can incite actions of others, maybe,
would be the cause. There would be the potential

reasoning. It could. We don't actually know
because it's like a secret investigation, so

we don't have access to what they're saying.
We just know that they're being accused of

not complying with the rules or posting hate
speech. But again, we don't have a crime of

hate speech. We don't have a crime of opinion.
We don't have a crime for like sharing fake

news and all these people are down basically
for it. So that's our main concern. And I think

if they would go after people that shares misinformation
or makes an opinion based on something that

may not be entirely true to make it like, to
give it a little makeup, they should probably

like go after over half the people on Twitter.
So I think it's a bit ridiculous. Yeah. And

Fernando, Twitter in Brazil is not, you know,
it's not, it wasn't anyway, it wasn't, you

know, a small proportion. It wasn't a small
vertical. It has a huge market share in Brazil,

right? Like such a big percentage of Brazilians
used Twitter to, or X to kind of, you know,

share, share stories and to communicate on digital
platforms. As a marketing tool, In Brazil,

it's massive. Yeah. I think it's, uh, we're
talking in the hundreds of millions of users

here. And, uh, Twitter has become like a major
source of information and communication worldwide,

not only in Brazil. So companies have like going,
going after social media to market and they

are honking, uh, to make their way through.
And, uh, um, so it's really big that they go

after a platform like this and, and. straight
up ban the use of the platform and go after

the people that try to use it, use through VPNs
and stuff like that. They are already, they

said like they would find people with like 10,000
Reais. Is that so Issa? Actually, it's much

more 50,000 PRL. 50,000. So it's $10,000, right?
Yeah, $10,000. Yeah, per day. So it's, you're

real like Diego Maradona said once, they cut
my legs off, you know, when they kicked him

out of the World Cup in the 94. So they are
cutting, not only gambling companies, like

everything, every company, every business, they
are cutting the legs off. Well, yeah, that's

a kind of, is a good segue there really, I guess.
How does this kind of lead to the gambling

industry? Obviously there's gonna be a lot of
companies eyeing the Brazilian market now,

they're looking to move in there. How is this
going to impact their strategies when it comes

to engaging with players and acquiring new players?
Well, I see Twitter as the most interactive

platform out there, much more than Instagram,
much more than Facebook, or even threads that

I don't think it catch so well. Like a lot of,
I think a lot of people is there, but they're

not using it so much. And Twitter has a very
great form of interaction. So once you cut

that, you're not only cut the interaction between
the company and the players, but you cannot

do like ads anymore in Twitter that we know
it's a huge thing and we know they have a very

good rate conversion. You cannot promote anymore,
like, or share your bonuses or your tips for

players or. or share the exclusive news that
the company has or the new ambassador of the

brand. And when you cannot do that, you cannot
actually reach these customers, because especially

in Brazil, we have a lot of sports betting companies
on Twitter, on Instagram. But it's not the

same. You don't see the same interaction, the
same engagement that you see on Twitter. And

it's not only with gambling. It's with every
single store or brand that isn't on Twitter.

You have a very good rate conversion when you
promote your business there. Different than

when you do that on Instagram. Yeah, that's
really interesting. Fernando, I'll bring you

in there. This is going to affect gambling,
right? Yeah, definitely. Because you may think,

okay, so Twitter is out, let's go to Instagram,
let's go to TikTok or ChikChoki. as Brazilians

would call it. So, but not everyone, it's not
the same audience as, or not the same user

base as Twitter had. Like Twitter is more of
a broader audience. Like everyone is using

Twitter, like from the young people to the older
ones. And maybe TikTok is for like more of

a youth audience and Instagram is more of a
young or younger. mid-age audience. So they

really have to like balance things out and start
assessing how to target different types of

audiences through these platforms. Like let's
go to Instagram and try to do like advertise

for some crowds. And I don't think, I don't
see them going big on TikTok because like I

said, it's more of a, for the youngest side
of the audience probably. even though I am

a big advocate of TikTok. Yeah, I'm not even
sure if you're allowed to market gambling on

TikTok. I think regulations restrict gambling
operators from advertising on TikTok. Yeah,

because of the reasons you say it's used by
a much younger generation and also, yeah, I

think a much younger generation engaged with
TikTok. So I don't think you're allowed. And

yeah, the complexities around that from a compliance
point of view would be very difficult because

of the young audience. So you'd have to prove
that you don't, you aren't trying to appeal

to them. I guess the other side of the coin
for the gambling industry is kind of the principles

of it. When I was on the SBC Digital Affiliate
Marketing Day two weeks ago, we did discuss

this and Carlos Sanchez, the CEO at Tips to
Chat has kind of said that it may well act

as a warning for the industry that. If governments
can take this type of action, if they can be

restrictive with platforms, it's X today, Twitter
today, but what could it be tomorrow? There

will be nervousness that it could be other platforms
in the future if they aren't taking the exact

steps that the government wants. That's a very
dangerous game, right? I believe it is 100%.

As a journalist, 100% freedom of speech. fan.
So I think people should be allowed to say

anything they want. And if they commit a crime,
when they say something, then they will face

the consequences and, you know, do what they
can face what they have to face. But you cannot,

like, censorship someone before they give a
speech or a platform before. So nobody can

go there and say what they actually this is
like. a witch hunt, that's what we see, and

that's how we call it, because actually they
cannot do that. The Supreme Court in Brazil

cannot do these kinds of things. And what we
are seeing in the past few years is our Supreme

Court just throwing our Constitution in the
trash and not following Constitution rules.

So this, what's happening right now, it's not
legal, it's illegal, but nobody's doing anything.

We see that the Congress doesn't do anything.
We see, and it's the only, like, the Congress

has the only people that could actually do something
to stop this, and they're not doing it. So,

yeah, it's really dangerous because, like I
said, you don't know what's going to happen

tomorrow. Today's Twitter, tomorrow could be
Instagram, and then could be Facebook, and

then could, if you don't comply with or Supreme
Court desires, let's put it that way, because

it's not a law. that he's asking to be followed.
It's just like what he wants. So it's really

dangerous because it gives you a lot of like
legal insecurity because you don't know what's

gonna happen. And this actually could stop companies
from coming to Brazil. Like, okay, I'm not

gonna open an office in Brazil. I'm not gonna
set up everything, pay the license of 30 million

VRL and pay EGGR. and have a cash like five
million BRL in cash in a different account

that I need to have in order to pay prizes,
let's say, that I don't have this amount of

money. So I have this another bank account with
this money in case this happens. And I'm not

going to do that because I'm not going to know
what's going to happen next. So why am I, you

know, like investing all of this money in a
country that I don't know what's going to...

tell me to do next that could harm my businesses.
Yeah, it certainly adds a level of volatility

to the market. And one of the things that was
kind of said was that, you know, there had

been affiliates in the region that after this
and also similarly of a similar principle after,

you know, Telegram was banned in various, various
regions, not in Brazil, I don't believe, but

I could be wrong there. But Telegram, you know,
kind of suffered this regulatory clampdown.

Off the back of both of those decisions, affiliates
from a lot of areas and tipsters from a lot

of areas were lost. They didn't know where to
go. They kind of needed a new avenue. So it

certainly does create a level of volatility
in the market. Yeah, and Fernando, Elon Musk,

he's obviously, you know, he's a little bit
maverick. He's a little bit out there. He doesn't

mince his words. I'm sure he's not mincing his
words on this one, right? Yeah, he's a very,

of course there's a big political component
to this whole thing. Like Elon Musk has been

a big advocate for, for Donald Trump or for,
for a more of a right wing side of the polity

of the politic landscape in general, worldwide.
Like he's backed president Javier Millay from

Argentina. He's backed of course, Donald Trump's
campaign in the U S and he's been very vocal

against Lula da Silva. So. who is president
of Brazil, in case you don't know guys. But

yeah, I think that makes a very big component
to this whole thing because probably if Elon

Musk weren't the guy he is, like he didn't have
the personality he has, he wouldn't act like

he usually does and post everything he posts,
especially those messages against the Brazilian

government. Probably... there would be a different
approach to this whole process. Like, there

probably, like Isa said, probably the president
would urge the Congress to act if the Supreme

Court would go after X and he would try probably
to be more conciliatory, like to bring both

parties together. So probably- It is political.
Yeah, yeah, it's very political. Of course,

everything is political really in life. and
especially in business. But yeah, I think probably

Elon Musk and his personality and how he usually
acts on social media can bring this type of

things. But then of course, we are left to assess
each one of us can have their own opinion on

this, but it can have a very negative impact
of course in the... in freedom of speech, in

freedom of the usage of internet and a whole
lot of things. Elon Musk is posting some memes

regarding Lula, the relationship between Lula
the president and Alexandre the Supreme Court

judge and it's very offensive. So it's like,
but I mean, again, it's offensive but it's

freedom of speech. So like, it's funny to see
because when he started Morais, but Lula went

to his Instagram account and said that no billionaires
are above Brazilian law. But Alexandre de Morais

is not a billionaire and he is above the law
because he's doing things that are not contemplating

our constitution. So like Fer said, it was perfect.
It is 100% political. All the situation, it

is political. I guess the kind of political
back and forth, the fact it's being a kind

of uses a political football.

The tongue-in-cheek Elon Musk response, as you
mentioned there, which is only going to inflame

the situation. What really matters is the ripple
effect this is going to have on businesses

in Brazil. I want to bring it back to that because
there will be just a myriad, I think, was it,

114, 113 companies that registered. to be part
of the Brazilian framework, and it will be

more than that as well. They are currently right
now, they're having this blueprint for their

marketing strategy to go into the Brazilian
market and to tap into a Brazilian audience.

How much are they gonna have to change what
they do and change that marketing strategy,

knowing not just that X isn't there anymore,
that Twitter isn't there anymore? but also

knowing that there's kind of this level of volatility
that the government will take action like this.

I would say that they will have to change 100
percent because including like the focus of

each social media is different. Like Twitter
is text, basically. You focus on text and interation.

So it's like a big WhatsApp group and open WhatsApp
group where everybody can give their opinions

and talk through the threads. But Instagram,
for instance, the focus is image. So you'll

have to have a different approach because you
have to do an image for like anything you want

to promote or anything you want to share with
your audience. So definitely will have to be

somewhat so different. TikTok or Chikitalki
like Farewell pointed out. I mean, like we

said, we don't know if they're gonna allow this
to happen there, do it to the age that is allowed

to access TikTok, but again, it's video. and
it's short videos and it has to be fast and

engaging because if you don't like the video,
just scroll down to another one. It's much

faster actually and easier than Instagram. So
they would have to change everything because

each platform has a different approach and has
a different purpose as well. It's not the same

thing. Yeah, definitely. And Fernando, anything
to add there? Companies are really going to

have to change how they approach this, right?
Yeah. First thing I thought of when I heard

like they wouldn't be allowed to market on Twitter
because it's banned I was like, okay, so maybe

you get to know your do you get your brand known
by the Brazilians through sponsorship? Maybe

but that's a very saturated market right now
in Brazil like every football team probably

has by now bedding partner and betting companies
are looking like to sponsor all sorts of things

like rodeo or even markets in Brazil. So it's
a very saturated market. Like you said, there's

113 operators that have applied for a license
only in this stage of the process. Like it's

operators that want to get their license by
December. So we are sure, or probably we'll

see more companies coming into the market. Oh,
and a detail, just a detail there. Like you

said, in. like all of these companies and each
company can hold up to three brands. So I can

have one, like, I don't know, let's say Isadora
brand company, and then I can have up to three

brands under my name so I can have three different
sports betting sites operating, which is like,

it gives you already three times more than the
companies that already have applied. So it's

a lot of people. Sorry, Fiori. Yeah, so they're
going to make a very big marketing effort and

they're probably going to have to go to traditional
advertising. And that has become like a very

big focus in other regulated markets that are
saying, okay, so maybe betting companies are

being a bit too aggressive with their advertising,
with their marketing campaigns. So that may

bring a negative. uh, impact also on the industry
because there's like a fine line, uh, with

integrity and advertising of edging and everything.
So, um, that is also going to be a big challenge

if this, uh, whole ban on X doesn't go get overturned.
Yeah, you're absolutely right. We've seen that

in other markets, right? We've seen that in
North America where, you know, you've kind

of had the saturation of sports, sports sponsorships.
We've even seen it in the UK and obviously

a much more mature market where And it has led
to a lot of negative press. But things could

be actually more difficult as time goes by,
because this morning we just like heard the

news that a parliamentarian from the Labour's
party, which is the party of our president,

Lula, asked for to ban all the promotions and
marketing around sports betting. So this could

be even more difficult for us in the next couple
of months or next year. Oh wow. Yeah, but that

sounds a bit of a long shot, really. There's
a lot of initiatives like that in different

countries of Latin America, but no, not in Brazil,
but in general. Yeah, they presented the bill,

so it's just like, it's a matter of voting.
And I don't believe that it will win. Actually,

the Congress will vote in favor of it. I don't
believe that. But yeah, it's like it's just

to see that we have a lot of movements against
our industry. Yeah. And this is just another

one. Izzy, you're going to drop that bombshell
on us as I was about to wrap up. That's quite

the news story, quite the backdrop there at
the end of the show. Oh, we can do another

episode about that. Another episode, yeah. SQL,
cliffhanger. But yeah, so we should clear that

up though that it's unlikely that will get passed.
But the very fact that it's kind of circling

around the that type of regulation is being
mentioned, it's being put forward, is a sign

that the industry should probably take note
of. Definitely, 100%. Really interesting stuff.

And we could talk about this for a long period
of time. We have spoken about it for a while,

but we could continue this discussion. And one
thing for sure, I've been at a lot of SPC conferences

all over the world in the past couple of years,
and Brazil has been a hot topic. wherever you

go. So I'm sure next week in Lisbon, it's going
to be at the forefront of the agenda for many

discussions. And yeah, there's going to be a
lot of discussion around this and marketing

strategies in the Brazilian market. And I look
forward to seeing you there. And thank you

both for your insights today. And yeah, have
a great week.