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A daily podcast delving into the biggest stories of the day throughout the sports betting and igaming sector.
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Hello, everyone. Before we start, I'd like to apologize for the noise you might hear on the back, but João Pessoa is quite busy today. But we are here to talk about Brazil, as you might have thought. So the 20th of August was the deadline set by the Secretariat of Prices and Betting of the Minister of Finance in Brazil for operators to submit their license applications to explore sports betting and online games in the country. and received authorization from the federal government until the end of this year. To discuss the new rules and the path the Brazilian market is taking, I, Isadora Marcanti, am joined by Antoinette Caruana, head of technical compliance at SportingTech. Hello, Antoinette, how are you? Hi, Issa, I'm good, how are you doing? I'm very good, we're very happy to have you here. Thank you, thank you for the invite. Very happy to be here. Yeah, of course. You're always welcome. You and Sporty Intak are always welcome at iGaming Daily Forkasts. But we can kick off this episode without telling you about or sponsor OptiMove, the number one CRM marketing solution for the iGaming market. And as a special offer to our listeners, OptiMove is offering new clients a free first month when they buy OptiMove. For more information and to claim the free month, go to optimove.com slash svc. So let's get started. Sporting tech assists operators in several departments within the industry, as well as in obtaining a sports betting license in different regions. How do you see the registration process in Brazil? Okay. So there is a comparison that we need to make. So essentially the current registration process is based on a dot-com business model. Okay. It's very easy. It's lightweight. It's basically there to make sure that we. We get some information from the players, we get the players on board it, and we have an initial step towards getting to know our clients. As we move into a more regulated Brazilian market, we are seeing a heavier registration flow, meaning that during the flow we're not only collecting information now, we're also doing some verifications in the background. Now, this process is obviously completely different to what players are used to in gaming websites in Brazil today. However, there will have to be some kind of education programs from the operators to show them and inform them about what is expected of them going forward in order for them to have, let's say, an account on a registered and regulated operator. One of the, let's say, advantages that we have already seen is that many other businesses outside of the gambling industry in Brazil already go through a very thorough registration or QYC process. So essentially, people in Brazil are very familiar with some of the processes that are going to be used to get them onboarded into new gaming websites, starting from 1st January 25. And well, with the law ordinance 722, which determines technical and with to obtain a license, such as players ID verification before or as soon as they register, how does this change the QIC process you are used to in other countries? Yes, that's very, very much related to the first question. So essentially today what we do is we collect some information during registration, we get the player set up with an account, they can start playing depositing and we will perform. KYC and the verifications of their details at a later stage, either on deposit or when there is a trigger or else when there is a withdrawal or any other trigger that the company might have set. Now, going forward, all of that process has to be performed during the registration process. So essentially, now the registration process is the full KYC process as well. So we collect the information. In the background, there are tools that will do verification of the data against whether a person is a politically exposed person or whether that person is on a blacklisted prohibited list, or whether that person is a sports person or a referee and they cannot play certain products. In the meantime, while we're doing all those checks in the background, we also need to kick off a face recognition process for the players. So essentially, you provide your ID details. And then we also confirm that the ID that you have, the physical ID and your face matches the ID and the details that you've given us match all of that. So it's quite a lengthy process. However, essentially all the KYC and the diligence process is almost completed during registration. Once that goes through successfully, we can create a player account. for the players and they can start logging in and playing. Obviously, this does not only provide more safeguard from an AMR perspective, but also for the players to make sure that no one can steal their identity because it's gonna be very hard for anyone to steal your identity if they have to perform face ID against that registration. The advantage again of these, let's say processes, is that in Brazil, many businesses that already perform or request these kinds of verifications, so people are already familiar with such processes. So let's say, although it's a transition for the gaming business, it won't be for the people on the ground. Apart from that, there's also confirmation of banking details, verification of banking details during the registration process, and also setup of multi-factor authentication. to be used at a later stage. So the registration and the QoS process are pretty robust for 2025 when Brazil regulated gaming kick-sauce. So since we're talking about robust measures to prevent fraud and to protect not only the players, but the platform providers, the payment providers, and the operators as well, according to law 14.790, which regulated the market in Brazil last year, no welcome bonuses can be offered to players. That's something that caught us, caught everyone by surprise. How does sporting tech see this role and how can this impact attracting new players? Yeah, so as you well said, this will impact, let's say the way that businesses and operators will attract players to that platform obviously, the way that... businesses will have to go about it is to make sure, first of all, that they have a stable platform, that they also offer a secure means of players logging into their account, not having leaks of data and stuff like that. And apart from that, to offer other, let's say loyalty programs later on during the player's journey. Apart from that, as we all know, it is also very important to have a very well... let's say design product, where basically you have very good game providers on your side. The sportsbook works perfectly. You have very, very good, let's say market set up and offers. So essentially you have to invest in other areas in order for, let's say, for players to be attractive to your platform without the use of welcome bonuses this time. Yeah, definitely. So talking about bonus letters. talk about responsible gambling as well, especially in Brazil. Right now is a very hot topic at the moment. And some of responsible gambling's best practices will be set in Brazil next year. Once the law 14.7 I know, and all the law ordinances will be valid, let's say like that, and the market will be solely operational. So how does Sporting Tech advise its clients on this matter, given the immaturity of the market? Okay, so just to start with a little bit of context on the existing situation. Today in the com model, you are required to offer some features on the website that will allow the players to set limits or self-exclusion. In very minor cases, there will be monitoring of what the players are doing and some interactions with the players. Most of this today is not fully regulated, so essentially every operator is very much left to do what they please and that will. Now going forward, this will change. The regulator will also impose some, let's say, requirements on the operators to monitor the player activity and not only to monitor, but also to place blocks on player account where they see that there is So essentially based on a player's deposits, withdrawals, the way they play, the way they log in, the operators will be able to determine whether this player is actually demonstrating potential risk gambling or whether, let's say, they are within their reason. And the regulator has also put forward suggestions on how to make this monitoring and how to... let's say, try to protect players as much as possible. Ultimately, when you protect your players, you're also protecting your business because if you have many players that end up bankrupt or even worse, it's bad reputation for the industry and for the company. So essentially this is also a very good step forward for gambling in Brazil in terms of reputation towards the industry. Yeah, that's right. And Just a curious question, actually, you as a compliance specialist. How do you see the compliance rules that we have set in Brazil now for the iGaming market? So in terms of compliance, there's quite a few requirements that have to be, let's say, adapted to the platforms. Some of them, we have seen them in other countries, and some of them we have not. One of them being, for example, the way that we have to process. withdrawals for players after they win. That is a new one. I have not seen a similar thing in the past. So there are a few other things that are specific to Brazil, basically the way they define a game session. Another huge, let's say, requirement that we've also seen in other countries is the prohibition of underage events. So essentially, if you have events, sporting events, where the majority of the players are under 18, those are not allowed for betting or to be added to the betting options. Well, thank you, Antoniette. Unfortunately, we have to let you go, but it was great to have you here. Thank you very much. It's been a pleasure. Thank you for this opportunity. Thank you. I hope to see you soon again. So that's all for today's episode, guys. Don't forget to subscribe to SPS Notícias Brasil newsletter on our LinkedIn page to stay up to date with all things Brazil. And thank you Antoinette again for joining us. It was great talking to you. It was a very enlightening episode. And thank you for being with us until now. See you next time.