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For so long, Brazil was the most hotly anticipated market in global iGaming. Now, more than one year on from the official Go Live date, we finally have data to tell us whether the hype was real or not. And on today's episode of iGaming Daily, we take a deep dive into the numbers recently published by the Secretariat of Prizes and Bets, and we ask, what next for Brazil as the framework undergoes its first round of amendments? So welcome back to iGaming Daily, this episode is brought to you by OptiMove, the creator of positionless marketing and the number one player engagement solution for iGaming and sports betting operators. Learn how OptiMove's positionless marketing is changing how iGaming teams operate. Discover how operators are using OptiMove's positionless marketing platform to launch personalized CRM campaigns, dynamically change casino lobbies and bet slips, and create engaging gamified experiences. You can learn more at OptiMove.com. Today, I'm joined by SBC's editor-at-large, Ted Menner, and Ana Maria Menezes of SBC Noticias Brazil, and more recently, named researcher for SBC Media. Ana, it's great to have you on the show. How's things? Hi, Charlie. uh Actually, it's been great. The new role is very fun. ah And it actually has given me some insight into what we're going to discuss today. uh So yeah, pretty excited. Thank you for having me again. No, thanks. And congrats on the new role. Thank you. Ted, how are you doing? How was your weekend post-ice? Nice R &R weekend, I hope. Yeah, predictably I had the post-ice flu. So to our audiences, solidarity and compassion to all those who are suffering. And what better way? recover from post-ice flu than to dig into some numbers. It's a real thing, It's real thing. It is a real thing, I promise you. But hey, Ted, I'm going to give you a little bit of respite because we have a researcher amongst us. Anna, could you give us a rundown of the numbers? How did Brazil perform during year one? Okay, so first of all, this was highly expected. We wanted to know the numbers, the actual numbers. because of course what we had so far were predictions and the numbers were pretty much following what we were expecting. So across the year, just speaking of GGR, the SBA, the secretary of prices, they told us they actually share the data that they reached around 7.4 billion dollars, we're talking dollars here, in GGR. So, and the federal revenue service had around out of that amount, Almost $2 billion. So this amount basically includes the federal taxes and the statutory allocation of the 12 % that we have now, which is around $900 million. And we're going to have, of course, this number a little bit higher around the next years because they just approved the increase of the taxes from 12 % to 15%. But so far we're working with 12 % here. So let's keep that in mind. ah And they also had the supervision and inspection fees amounted in around almost 20 million dollars. And this is all around 2025. So first year of the legalized market, we have some pretty good numbers as you can all see it. ah And we have taken some great number in Texas to the government, which is what they were looking for from the beginning. And they're going to get even more around the next years. Yeah, so we've got 79 licenses, more than 5 billion pounds, 5.8 billion euros in GGR throughout the year. eh Ted, em how do we interpret those numbers on a sort of expectations versus reality basis? Has Brazil been a booming market that we all thought it might be? Or do we have to say that it's flatter to deceive? What do you think? Okay, just to the top line, I think if you are in the government and if you are interested in the federal, the tax agency, you're very pleased with these numbers. I mean, this is an effective regime and the tax profile certainly is working. In terms of the competitive angle on the licenses, I think it's really a reality check on anyone who thought that there'd be an instant bet spoon. when the market was triggered in January. The reality is that, and I'm using euros here, at 5.8 billion euros, Brazil doesn't get into the global top 10, but I don't think that anyone kind of projected that it would on year one. It's been very much a year of regulatory transition. There are kind of elements that are still very hard for Brazilian bets to transcend. Number one. It's the application of no bonuses. That's really kind of impeding kind of players coming on board and also a very tough compliance to kind of on board, to be on board existing players from great regulated ah operators. It's going to take more than 12 months. ah But I think overall kind of that initial top metrics, it's something to be pleased at. again, what sells Brazil is that there's never been a market of this size. that's regulated and that's taken on this effort. you would say on a global basis, perhaps Ted, that a positive first year may be a sign of promise, but more to come. um Yeah. I've put it that simply. mean, I was never kind of in the kind of like high, highest of expectations for Brazil. I think some of it was ludicrous. Some of the projections that were put on for Brazil were ludicrous. And actually, think the real numbers actually do put across the potential for the market. how do you look at this from a Brazilian point of view? You'll be well connected with local operators. How do you think that the stakeholders in Brazil have reacted to this publication? First of all, it's good to have numbers to actually back what's going on here. So even to justify the amount of taxes that we're paying. So, okay, the government, they were saying that they needed the revenue. So look at what we're bringing to them. there's a lot of this feeling, something that I've seen across all the operators that I've talked to. uh Something that has been questioned is just, okay, the regulation right now, we're getting this amount and all of that good for the country and all of that. But what is it? being given in return in terms of fighting the black market. So, of course, we're going to talk a little bit more about that, but this is something that has been discussed. OK, we're OK with paying taxes as long as we know that they're doing whatever they can to actually keep this market healthy and that it can just can keep going, you know, because it doesn't matter if they're still paying taxes in a lot of taxes. And the numbers are good for the country because we're contributing and all of that. If in the end, they're still being sort of like, I don't know, asphyxiated by the black market in a way, because they're still offering, like Ted said, they cannot offer the welcome bonuses, but the black market can. So the revenue is going somewhere. Uh, so yeah, this is something that I've been listening a lot. People are saying a lot, uh, of this specific topic, you know? Well, let's take a look off the back of your concerns about the black market. Let's take a look at some of the demographic data because the secretary did publish some data about who is engaging with these products. Is the channelization rate positive in Brazil? This is the tricky part because of course it's been a year, so we still have the data. We have some data coming, but we still need comparison and we don't have comparison yet. We only have the first part of the bracket and then we need to just keep working through it. But licensed operators, of course we're talking about the regulated market, they said that over 25 million Brazilians are placed online, that's in 2025. And the majority of those people are men, almost 70%. Women are around 30 % of that. People between 31 to 40 years old, around almost 30 % are the largest group playing or placing bets. And then we have ages from 18 to 24, which is around 22 % of the bettors. And then not Leslie, but right after that, we have 25 to 30, around 22 % as well. And we have Leslie from 41 % to six years old. So, and the seniors after 60 years old account for only 2.7 % of the total. So we have this information, ah but at the same time, the information that we got from ah associations and all of that is that we have a 51 % size of the black market. So, okay, we have this data of people who are betting, ah but we still have 51 % so far because we don't have any new data of people betting, of the size of the black market in Brazil. So, okay, we have this persona. of people who are betting, how much is it actually true compared to the size of the black market of people who are actually placing bets on the black market. So yeah, something to actually think about of how trustworthy data can be when we cannot reach the full potential of the market. I think that kind of says it all. mean, where the of the regulatory battle is, you know, if you even face You if you start taking percentages off that black market and you go and see it to 60, 70%, you know, you're adding, you know, a lot more kind of, you know, billions onto your top lines and the outcomes just can be more positive for everyone. know, a regime that generates 900 million in its first year in taxes is a positive platform. And I think the other factor here is that, okay. I think the industry is down on so much talk of taxes, but in the case of Brazil, I think that it's a positive note because it takes it to a uh very divided house and says, look, this is a tax-effective industry and one that should be taken seriously by all parties. And I think that is a positive platform. Great. Well, Anna, Ted, we've been quite numbers heavy in this first half. Let's take a... A quick break, clear our heads and we'll come back and we'll talk a little bit more about this, shall we? Welcome back to iGaming Daily. Today we're dissecting the first data wave of Brazil's regulated iGaming market. We've had an excellent rundown of the numbers in the first half, but let's look ahead to 2026 and beyond. em Where do we see the biggest challenges facing Brazil's operators this year? Is it taxes? Is it... the black market that we've already mentioned or is it something else entirely? Anna, what do you think? ah I sort of gave it away in the first half, but I definitely think it's the black market because it actually brings taxes and revenue and it also brings publicity, all of that, into one thing, which is again the black market. But not only that, this is something, this is an actual challenge. that both the government and operators are going to face in 2026, is methods of payment, so payment methods and all of that, the financial institutions. Because something that is very clear, if those illegal companies are operating, is because people are actually paying for it, the money is being processed and taken somewhere, unless they actually have a way of stopping those financial institutions that are helping the illegal market and actually block them from operating. And with sanctions or whatever is needed, ah if you don't cut the money, it will just keep happening. So this is an actual challenge that Brazil is going to face in 2026. And I'm saying this as someone who has been talking to the payment providers, to the operators as well. And this is something that is very concerning to everyone. If the money is flowing, no one's going to stop. And this is where we ask the central bank to actually keep an eye on those payment providers because they're the ones who have the power to actually oversee it, to provide sanctions. And actually right now in Brazil, we have some scandals, if I can put it this way, some investigations with banks, Brazilian banks. that are involved with fraud and all of that, and they're actually being taken down. So we know that the central bank and the central bank is overseeing all of this. So we know that they have the power, they have the resources for that. So why are we not using it that way? What is stopping the central bank from actually doing this? Is it the lack of money? Is it the lack maybe of, of the feeling of importance for that? So yeah, I would say that this is definitely the biggest challenge, least in my opinion, but Teta would actually love to hear from you if you have any different pointers. No, no, look, I totally agree with you, Yes, you're right. The black market is a huge liability for the Brazilian regulator. But I also have to kind of give it a bit of leeway here because regulating and governing a brand new online gambling market is hard and it carries transitions with ZAC. And I think what regulators learn and what the Brazilian regulators are learning very early is that it's not just a case of policy development and looking after licenses. It's systemic. It's about creating a whole system and environment in which to govern IT, payment services providers, wallets. Everything has to be entwined and integrated. I'm going to kind of say that the tax exposure doubling up to 24 % is going to be huge this year. And I don't necessarily think that it's going to be, of course it's going be an impact on operators, but I think it's going to change the market condition here. And I think that six months into play, I think that this kind of sets, it sets the conditions for M &A plays. Then finally, and this is always the case with South American markets is can regulators stick the script for another year? and really just not touch the kind of overall framework. mean, can they just let a market settle? This is proved very hard in South America. Yeah. 100%, right? 100%. I don't think we've seen it sort of like just letting things be for a while and then decide what to do. There's just always the feeling of being exasperated to actually do something to... As if things don't take time. I agree with you on that. 100%. Yeah. Well, one thing that we've seen already since the market launch was the introduction of a central self-exclusion program. do we have any insights into how that rollout has been for maybe both operators and players? Yeah. So the self-exclusion platform that was actually launched in December last year. And they already had around over actually 200,000 requests for voluntary personal self-exclusion. That is quite a large number if you think about it. And the reasons for people to just exclude themselves from those platforms, the regulated platforms we're talking. The main reason was mental health concern. So they mentioned loss of control over gambling. And then we have after that data protection concerns as well. And then. Lastly, we also have them saying that they want to stay excluded from an indefinite period, which is over 70 % of people and a very much smaller share said that they wanted to be excluded from one year period. So that was around 19%. That shows that people are actually understanding what the government is offering them. So we're talking about in less over a little over a month. talking about over 200,000 people excluding themselves. So that means the government is reaching them somehow. Are they also reaching them in terms of safe, responsible gambling with the ads and all of that? Because this is something that the operators are also complaining about. So I think this is also something to consider when we talk about how much the government can reach out to people. that is only one change that we've we've seen since last January. But Ted, Lula still seems unhappy with the new bets framework. And considering that this is the president who actually signed off on the bill and established the market, what's he got against gambling? He seems like he's got a bit of a grudge. Yeah. I mean, read this in SPC Noticias, it appears that Lula is trying to kind of pass the buck on how the framework was set for the bets market and liabilities that the market carries. And again, I think this kind of points back to, you know, politicians being nervous of regulating online gaming regime, but also kind of not understanding kind of the intricacies of that go with it. That it's not just a case of just initiating the regulation, but actually just seeing it transition and getting it to a better place. Look, 236 is going to be. There's going be a general election in Brazil. And I think there's a kind of big kind of politicking on bets and in which direction it takes. What you see in Brazil is that you've got a very, you know, just such a divided house in between kind of what economic and social direction Brazil takes. Not only in terms, you know, in terms of for its society, but also for its overall economy. there's a lot at risk in 2026. Ted, you mentioned there the election that could be huge. Anna, it's often the case that gambling doesn't influence the elections, but the elections can certainly influence gambling. How do you look at the elections this year? How big could they be and how could they impact the regulated sector? Okay, so first of all, the elections, this topic has been something I've been talking about for a couple of months now, because I do believe that what we're going to have this year is going to define a lot of the ways that politicians are talking about sports betting and just high gaming in general. What I mean by this is using gambling as a tool to get elected is very common. So what we're seeing, just an example, Lula, a couple of days ago, he went on stand and he said, I blame the Bolsonaro government for this crisis of betting. He said that with all the words. This is already a political uh way of seeing things and we're not here to take any sides, but it is a political tool. And other politicians are going to do the same this year. We are actually electing deputies and senators and governors. Those people are very keen to using whatever tool they can to speak to the public. And if the public is highly against batting, that's what they're going to use. So this is something that we have to take into consideration and to also take things with a pinch of salt when we hear the most ludicrous sort of like statements. Yeah, we should ban bats completely and all of that. We know that this is not going to happen. But maybe the regular public, people who are not actually part of the industry don't know that. They don't know that. All they hear is that, this person is saying that they want to eliminate all gambling addictions and all of that. We know it doesn't work this way, but it doesn't matter. It's a political promise that doesn't have to be actually followed through after that. And it's very sad to actually say this, but it's a pretty normal behavior in sort of like political ah environments overall. all around the world. not something that is specifically related to Brazil. But another topic and that I think our listeners should take into consideration, religion plays a big part in Brazilian politics. So when Lula also said that he was against it, he started with saying, I'm Catholic. And so our evangelicals against betting and all of that. And it has gotten into our houses. He said that. So it connects to an audience that is also deeply rooted. politicians, in politics, sorry. So yeah, a lot to think about with all of that, but we're going to have to ask for another says hashtag winning C. Yeah. mean, Brazil, big market, big drama. Yeah. It's true. that's, And we can all place our financial predictions on everyone's favorite prediction markets app. So we'll be keeping an eye on that. Oh yeah. But for now, Ana Maria, thank you very much for joining us. Ted, thanks again as always. And to our listeners, if you want to read more about the reports coming out of Brazil, we'll leave links in both Brazilian Portuguese and English for you to read. But for now, thank you and tune into tomorrow's episode of iGaming Daily to keep up to date with all the latest global gambling news.