Last week, the Hilton Buenos Aires Hotel and Convention Center hosted SAGSE Latam 2024, which was held on March 20 and 21 and received suppliers, operators, and regulators from all over the region.
As part of SAGSE X, the cycle of conferences prepared for the occasion, André Vinícius de Alencar Alves, commercial director of Control F5, took the microphone to address the gaming regulation process Brazil is going through, as well as the expansion expectations of this promising market.
After the talk, Yogonet spoke with Alves, who analyzed some of the pending regulations in his country. The executive of the firm, which specializes in marketing solutions for online gambling companies, also highlighted the important development of the sector that was achieved in 2023 and the points that the Brazilian market should promote to further exploit this growth potential.
How do you think the recent sanctioning of the online gambling regulation will impact the Brazilian market and your company in particular?
We are at a point of regulation that is not very good because, although we already have a signed regulation, we still do not have the ordinances on how the law is going to be applied. We are still waiting.
We know that for Control F5 this is an important moment. We love working with a regulated market because we can provide much more professionalism to the operators and, in this way, we can create a market that is increasingly transparent and secure, and that operates in a professional manner.
We are still waiting for a couple of definitions and points that are pending. One of the issues being discussed with the Brazilian Ministry of Finance is the partner that a foreign operation in Brazil must have to launch. That is to say, an outside company must have a local partner with 20% of the participation to start up in the Brazilian market, but it is still not clear whether it must be a natural person, a company, or a group.
In this sense, we are preparing solutions to help international operators who want to enter the Brazilian market. We want to help them by creating solutions, services, and support in a professional manner so that they can comply with the regulations. We are still awaiting definitions from the government.
Control F5 has been operating in Brazil for some time now. How has the experience been so far?
Control F5 has been in the gaming market since 2015. One difference that I always tell my clients is that we are not a service company that entered the gaming market, but a company in the gaming sector that started providing services to operators.
That is why I believe that our strongest point is the specialization and knowledge we have of the gaming market and not only of the services we provide.
After the passing of the law, everyone is talking about Brazil and how, once it is up and running and 100% regulated, it is going to develop a lot more. What does Control F5 think of all these expectations and the potential that stakeholders see in the market?
Expectations still seem low to me. I think the Brazilian market is going to amaze everyone because it is bigger than we thought. In my presentation, I talked a lot about this. The Brazilian market until 2023 had a penetration of 29%, which was the year it grew the most.
This means that we have 130 million Brazilians who are individuals over 18 years of age and have access to the Internet and that, of this total, less than 29 million people gamble on gambling sites. Therefore, there is a lot of room to work in the Brazilian market.
But the Brazilian gambler’s mentality must be changed. We have to promote security, transparency, and professionalism so that users start to trust the games and play more and more. Once this is achieved, I know that the market will open up in a fantastic way. That is why I believe that the numbers we can achieve are much higher than what we projected and that the Brazilian market can be much bigger than we thought.
On the other hand, we also have a law that is being evaluated to mark the return of land casinos in Brazil. If that were to happen, I think the results would be monstrous. So the potential we have is gigantic.
Why do you think it is so difficult to move forward with the issue of retail casinos?
It is because of a historical issue in Brazil. We had casinos before, they were banned, then they were authorized, then they were banned again. It is a very controversial issue in Brazil. For Brazilians, gambling casinos are still a taboo.
That is why we have to promote education and create a professional market to overcome all the difficulties of the local market. Imagine having casinos like Ceasars Palace in the middle of a Brazilian tourist beach. Who would not want to visit it?
If the gaming market opens up, it will not only change this industry, but all of Brazil, with benefits for the economy, job creation, and health, among others. All this will change drastically in Brazil.
There is a lot of potential and I think now the Brazilian government is realizing what this market can be. But they don’t know it yet, because even for us who work in this, it is difficult to imagine the potential. Every time we produce a growth estimate, we are always surprised by a higher growth. So I have the feeling that the numbers we project will always be very small compared to what the Brazilian market can generate.
Do you have any plans to expand your operations outside Brazil?
Yes, we always had a plan. We are always in events like this and in different places in Latin America. We love working in Latam, but the Brazilian market is trending now, so we have to focus on this one.
For now, we already know that we are going to spend at least more than two or three years focused on regulation in Brazil. Then yes, we are going to explore new markets in Latam, because it is the profile we love, the work we love and we want to grow in South America. It seems to us that the market is very wonderful and the players, in some way, have a similarity in the way they play, that is why we are focused on being able to grow in Latin America.