Building a Sustainable Sports Betting Market in Brazil

## Cultivating a Sustainable Sports Wagering Marketplace in Brazil

Brazil flaunts a colossal soccer fan base, making its market a potential candidate for one of the largest globally. Francesco Rodano, Chief Policy Officer at Playtech, underscores the significance of operators guaranteeing a secure and sustainable launch, sharing with iGB how they’re addressing the initial hurdles presented by intricate regulations.

Following four years of labor, the execution and opening of the Brazilian sports wagering marketplace is anticipated to occur later this year, with sustainability being of paramount importance.

Francesco Rodano, Playtech’s Chief Policy Officer, believes the market possesses immense potential. “The magnitude of the extensive unregulated gambling market and the Brazilians’ fervor for sports suggest it could become one of the largest regulated marketplaces worldwide,” he declared.

At Playtech, we are prepared to contribute, whether it’s forging strategic partnerships or joint ventures with top operators in regional markets, as we have done in Mexico with Caliente and in Colombia with Wplay, or supplying our products and services to local and international licensees of any size.

Responsible gaming is vital, and Rodano believes that incorporating sustainability into Brazilian sports betting from the beginning is essential, as new opportunities also bring new hazards.

He believes that the market opening will make operators highly conscious of how to safeguard customers, which aligns with broader industry trends. Sustainable gambling focuses on maintaining a balance between finances and gaming to avoid continuing to participate after losses.

Operators now need to not only recognize potential risks but also take action by setting limits to prevent harm to players’ mental and financial well-being.

“Even if only a small percentage of players may be affected by gambling, it is crucial to identify them early on, and it is a moral duty,” he explained.

“There are numerous ways to interact with at-risk players, from generic emails to personal interviews conducted by safe gambling specialists or even psychologists. All operators should be able to activate the most appropriate intervention measures based on each player’s risk level. At Playtech, we have developed a first-level interaction tool that has proven to be very valuable.”

Our research shows that AI-driven personalized interventions are significantly more successful in encouraging responsible gambling habits, like setting financial limits, compared to traditional mass email campaigns.

Artificial intelligence has completely changed the gambling industry, giving operators a much deeper understanding of player actions and the ability to promote responsible gaming. Previously, gambling companies relied on basic scoring systems based on things like how much money players deposited or wagered, and how long they played. This approach treats everyone the same, but at Playtech, they understand that people are very different.

“The internet has given us access to a huge amount of personal information that was impossible to get before,” said Rodano. “And it’s not just about gambling, which is already very detailed. There’s information from many other sources because of how connected we are. I know VIP managers look at players’ social media activity, for example, if they think something is happening.”

“Machine learning gives us a great opportunity to understand people’s actions. For example, in 2019, an AI poker program created by Facebook and Carnegie Mellon University beat some of the best professional players in the world. The software’s understanding of human behavior, thanks to AI, was better than the players themselves.”

Playtech is using this technology in its safer gambling analytics platform, BetBuddy.

This program endeavors to “interpret” player conduct to recognize players in jeopardy at an early stage. It depends on machine learning algorithms that analyze data for each player, yielding up to 70 behavioral indicators to align them with patterns of known affected players (for instance, players who frequently wager but ultimately choose to self-exclude or declare harm).

These models are enhanced by “expert regulations” to further refine the data-driven strategy, and most significantly, they are entirely transparent. The catalog of individual indicators driving risk enables operators to tailor interventions as previously mentioned, which is more effective than conventional generic interactions,” Rodano clarified.

“We are delighted to observe that our research indicates 76% of Brazilians support gambling enterprises utilizing AI to identify potential at-risk players.

Potential Perils
Playtech recently executed a customized consumer poll in four Latin American nations, including Brazil, to examine key matters related to responsible gaming in each region. In Brazil, 56% of respondents declared they had already gambled, despite the absence of regulation. The majority of them argued for improved local regulations and more information regarding responsible and sustainable gaming tools.

The poll disclosed that Brazilians’ primary concern when gambling is losing all their funds due to addiction.

In addition to these concerns, there’s a mounting risk of deception, game tampering, missed payouts, privacy violations, and even financing criminal activities.

Rodano points out that since the legal market is not yet operational, many Brazilian players participate in betting companies from overseas and tax-free zones, where no consumer safeguards are in place.

With Brazil’s ruling, sports betting is regulated, but online gambling remains unregulated. Rodano stresses that other forms of gambling need to follow suit.

Therefore, he emphasizes that the regulatory framework needs to encompass casino games and popular forms of sports betting that consumers enjoy, otherwise players have little motivation to transition to the licensed side of the country.

“This poses a potential risk factor for Brazil, as Law 846/2018 only provides for the regulation of sports betting, while casino games (which account for nearly half of global gambling revenue) will remain illegal in the near future, leaving Brazilian players with no legal option to their offshore counterparts.”

Collaboration, not opposition
“We believe that a gambling regulatory framework can only succeed when the government, players, and the gambling industry all achieve their respective objectives,” says Rodano.

He continues, stating that suppliers play a neutral role.

We partner with numerous consumer-facing operators, who frequently engage in intense rivalry. Nonetheless, this hasn’t deterred us from dedicating time and resources to safer gambling research and development.

Our duty is fundamentally twofold. On the one hand, we aim to create safer, more sustainable gambling solutions that are grounded in evidence and rigorously evaluated. These solutions prioritize the well-being of individual players, rather than a standardized approach, as we are all unique.

Conversely, we must educate policymakers and industry colleagues about the potential of this strategy.

For this endeavor to be successful, increased cooperation across the industry is essential. Rodano recognizes that for a market to thrive, it’s not solely competition that operators need to concentrate on – it requires collaboration across the entire gambling sector to prosper.

“Numerous machine learning programs and trials are being conducted by various operators, but frequently these findings are not disseminated to others,” he clarifies. “Safeguarding everyone’s health and enhancing well-being should be a collective, industry-wide endeavor, not a means to gain a potential competitive edge.

“By sharing our triumphs, particularly our setbacks, we can learn collectively and assist the gambling industry in achieving long-term sustainability.”

Playtech envisions a straightforward route for Brazil’s gaming sector: responsible gaming should be a top priority, just as it is in established European markets.

“We’ve been engaging with regulatory bodies globally for an extended period, and many are now enacting regulations aimed at comprehending individuals’ gambling patterns and intervening when necessary. This trend is evident in locations such as the Netherlands, France, Spain, Germany, and Sweden.

“We’re certainly receptive to collaborating with Brazilian authorities to ensure the legal gambling industry in Brazil flourishes in a secure, sustainable, and enduring manner.”

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