Back to news Mar 25, 2024
Articles

IGaming In Brazil: Is It A Good Idea To Start A Business?

All iGaming businesses compete. Is Brazil ripe for entrepreneurship? Let's talk about the market dynamics, business models, marketing tactics and find out.
IGaming In Brazil: Is It A Good Idea To Start A Business?

Globally, 21% of all online gambling traffic comes from Brazil, says Mitek. The country is a significant player that brands consider when launching a business. With the largest economy in Latin America and many entertainment opportunities to explore, Brazil certainly presents a unique landscape for iGaming companies.

The increasing regulations in the gaming sector signalled a promising era, and it presents a wealth of prospects for startups and brands looking to monetise local traffic in different ways.

Keep reading to learn how your business can successfully take advantage of this scene. In this article, we will explore the current state of the Brazilian gaming market, analyse the opportunities and challenges, and more.

Market Overview: Exploring the iGaming Industry in Brazil

According to KPMG, the estimated size of the Brazilian iGaming market is $2.1 billion, projected to grow to $2.6 billion by 2026. Fixed-odds betting has been recognised as a legitimate lottery activity since 2018.

While most gambling activities were previously forbidden, recent shifts in the regulatory process have paved the way for the iGaming business to grow fully. These new regulations on the horizon promise that the country will become a global leader in iGaming.

Brazil's Congress is discussing legislation to legalise most other types of gambling nationwide. Predictions indicate that Brazil's Ministry of Economy has until the end of 2022 to create a competitive online and land-based sports betting market.

The Regulatory Breakthrough

The country aims to create a thriving iGaming ecosystem and is starting to attract more local and international operators. With its recent regulatory framework, the government has taken significant steps toward becoming a global leader in iGaming.

The new regulatory framework for sports betting and iGaming signed Bill 3,626/2023 into law on December 30, 2023. Operators now in Brazil will be taxed at 12% of gross gaming revenue, with a significant portion allocated to sports development.

Fixed-odds bets will be allowed, and the Ministry of Finance will regulate operators. Companies can obtain five-year licences, paying R$30 million for up to three brands (two fewer than initially expected).

When discussing requirements, operators must offer customers self-exclusion windows ranging from 24 hours to six weeks. Also, betters' identities need to be verified using facial recognition technology, ensuring they are over 18 years old.

Operators and brands should wait to hear the regulatory guidelines until the next steps are taken. A regulated market is expected to operate in the second half of 2024. Over 130 businesses have expressed interest in applying for licences.

pexels-caio-45917
Source: Pexels

Starting an iGaming Business in Brazil: Opportunities and Challenges

As an aspiring gaming entrepreneur, consider the following opportunities in Brazil's large population and increasing digital connectivity, creating an untapped market ripe for exploration.

Another essential factor to consider is that the public's perception of gambling gradually shifts as people discuss the topic and its form of entertainment. Overall, this evolving attitude creates a receptive environment for iGaming businesses.

Furthermore, Brazil is now a hotspot for sports enthusiasts with the upcoming FIFA World Cup. These global events provide a golden opportunity for market entry and engagement with passionate fans.

On the other hand, the primary challenge for iGaming Brands is competition, as it represents so many booming opportunities. Expect fierce competition from both established players and new entrants. Your business must offer unique value, exceptional user experiences, and innovative features to stand out.

In this scene, understanding local preferences to resonate with Brazilian players is crucial for business stability. Following the regulatory rules to navigate Brazil's legal framework complexity is also vital. Businesses will need to look at the upcoming updates to understand the regulations better.

Entering the Brazilian iGaming Market: Business Models to Consider

As regulations evolve and public attitudes shift, let's now look at strategic approaches, business models, and the cosmic mysteries awaiting those who venture into Brazil's iGaming landscape:

Partnerships

Collaborating with local entities can be a smart move. Partnering with established Brazilian companies allows you to access their expertise, networks, and understanding of the local market.

Strategic alliances allow you to navigate regulatory complexities and cultural nuances effectively. Look for partners who share your vision and can complement your strengths.

Acquisitions

In the iGaming world, acquiring existing iGaming platforms or operators provides a shortcut to market entry. Identify successful platforms that align with your business goals.

Acquisitions allow you to tap into an existing customer base, technology infrastructure, and operational know-how. However, thorough due diligence is crucial—evaluate financial health, compliance records, and growth potential before moving.

Greenfield Investments

Building from scratch gives you complete control over your iGaming venture. Consider this approach if you have a unique vision or want to tailor your offerings to the Brazilian audience.

Develop your platform, create localised content, and design user experiences that resonate with Brazilian players. While greenfield investments require more time and resources, they offer long-term flexibility and customisation.

Player Preferences

Speaking of game preferences, about 74 million people surveyed said they engage in sports betting, 46 million choose lottery or bingo, and 23 million are fans of online casinos. See it below:

Brazilian Real-Money Player Pool and Basic
Source: Env Media

Technical and Technological Requirements in the Brazilian iGaming Industry

Why Brazil?

Brazil’s marked advantages make it an attractive market for iGaming operators and supporting tech startups:

Regarding demographics, Brazil boasts a young, digitally engaged population interested in online gaming.

When it comes to growth potential, the Brazilian iGaming market holds significant untapped potential.

Changes in iGaming regulations open new opportunities. One more point in pro-Brazilian market potential is the solid historical and cultural affinity for gaming.

Also, a well-regulated iGaming industry could boost Brazil’s economy and benefit all stakeholders.

Niche competencies such as content localisation, sound design, monetisation, and gamification play vital roles in creating engaging game-related content that attracts millions daily.

As Brazil strives for legitimacy through proper regulation, transparent funding, and clear rules, the iGaming sector awaits further growth. The country’s technological adaptability and evolving regulatory environment position it as fertile ground for the burgeoning iGaming industry.

Marketing an iGaming Business in Brazil: Strategies for Success

Promoting an iGaming business in Brazil is consistent with regular marketing tactics but also calls for particular strategies to match the country's unique legal and cultural landscape.

Firstly, it's essential to create localised content in Portuguese that resonates with Brazilian audiences, including website content, social media posts, and email marketing campaigns.

This content should reflect Brazilian culture and language to engage with potential players effectively. Additionally, leveraging popular social media platforms and partnering with local businesses or events can help increase brand visibility and credibility among the target audience.

Offering localised payment options and providing customer support in Portuguese are crucial steps to enhancing user experience and building trust with Brazilian players. Furthermore, staying compliant with Brazilian gambling laws and regulations is essential to ensuring the legality and legitimacy of the iGaming business.

Creating informative and engaging content related to online gambling and casino games will attract and retain players while offering enticing promotions and bonuses that can incentivise new sign-ups and encourage customer loyalty.

If the business heavily relies on the online environment, ensuring mobile optimisation is very important, as a significant portion of internet users in Brazil access the internet primarily through mobile devices.

Affiliate programs can be particularly effective due to the country's large online population and growing interest in iGaming. To maximise their effectiveness, iGaming businesses should carefully select and manage their affiliate partners. This involves identifying affiliates with relevant audiences, providing them with marketing materials and support, and monitoring their performance to ensure compliance with regulations and quality standards.

It should be noted that not all iGaming businesses immediately generate a positive return on investment. Unfortunately, new brands on a tight budget often don't have the luxury of learning from their mistakes, as that would effectively kill the business. Instead, they should look to the competition and study it—both for what works and what doesn't.

Combining these marketing strategies and staying informed about regulatory changes, any iGaming business can effectively promote its offerings and establish a strong presence in the Brazilian market. Here's a rundown:

  • Start by creating localised content
  • Leverage content marketing, social media and SEO (basics and local)
  • Create and market promotional offers & bonuses
  • Establish partnerships and look for sponsors
  • Mobile optimisation is a must
  • Carefully select affiliate partners
  • Always be compliant and up-to-date with regulations
  • Customer support in Brazilian Portuguese
  • Study the competition and do better

Conclusion: Is Starting an iGaming Business in Brazil a Good Idea? A Summary of Key Considerations

Considering Brazil's rapidly expanding iGaming industry, marked by regulatory advancements and a growing digital market, starting an iGaming business in the country holds significant promise.

Projections of market size expansion and recent regulatory breakthroughs that facilitate market entry further reinforce the conclusion that Brazil will, in the near future, be a fertile ground for entrepreneurs.

However, the landscape poses challenges, including fierce competition and regulatory complexities. Success hinges on strategic approaches like localised content, partnerships, and regulation compliance. By leveraging tailored marketing strategies and embracing innovation, iGaming businesses can capitalise on Brazil's untapped market potential and establish a strong presence in this dynamic industry.

Library of sources

Brazilian real-money gaming market: a complete overview

Brazil iGaming report: waiting for the boom

Unveiling the Brazilian Real-Money Gaming Market

Brazilian president approves regulatory framework for sports betting, igaming - Legal & compliance - iGB

"Mitek Identity Verification will be an ideal solution for Brazilian betting operators" - Games Magazine Brasil

Brazil approves regulatory framework for sports betting - Sportcal iGaming market entry in Brazil | Mitek

B2B Lead Generation: Unleashing Innovation and Technology for Success - ProWebHill

Unlocking Dubai's Entrepreneurial Potential: Business Opportunity

Get in touch

If you are interested in finding out more about our offering, please complete the form below and a member of our team will be in touch shortly

Solution

Optional

Contact us

We are always on the lookout for passionate clients and new talents to join us.

Thank you
for contacting us

We appreciate that you’ve taken the time to write us.
We’ll get back to you very soon.

Close window

Follow us in social media

Apply for the job

Or email us at Careers@gamingtec.com