GMB - Once again Brazil is the focus of attention of international players, this time at SBC Miami. I would like you to evaluate what the market expectations are for Brazil.
Andre Gelfi - It's my first experience here at SBC LatAm. I had never been to Miami for this event and it was a pleasant surprise the size of the fair, the convenience of staying here at the hotel and the exhibition part and the panels, very convenient. We feel very welcomed in this structure and it makes interaction easier. Going straight to your question, you can already understand that expectations are high regarding the future of our market. We have just left a panel that spoke in its title of "sleeping giant", an expression that we know well and that has been recurring for a long time. That's what we put there on the panel, together with Alexandre, that this giant is already awake, and now we need to try to organize it. Regulation is essential so that we can actually ensure that this giant moves forward in a healthy manner from now on.
There is great expectation regarding regulation. We hope that in the first half of November we will have positive news in the Senate. We made it clear [to Parliament] that we have some apprehension regarding the economic issue, tax issues in general, especially the issue of gamblers, which is the most sensitive. And I think we managed to raise awareness and did our part. What was within our power to sensitize and raise awareness among the parties involved, both in the Government and in Congress, regarding this issue. Let's see how it turns out in the end. We are very optimistic about the attitude and receptivity we have found in the discussions. Now, let's wait and see the concrete facts.
Do sector players have the same vision and good expectations regarding this no longer sleeping giant?
You have more optimists and less optimists, a lot of apprehension and expectations, because the issue is fundamental and determining the favorable or unfavorable outcome of the market. As it is not a fait accompli, each person has a way of reacting to future events. Regardless of optimism or skepticism, there is great expectation, as Brazil is a market that attracts attention not only internally, but abroad. We are in Miami and there is attention from the American market. We are close to regulation and I see that there is another channel of interest that was not so visible on our radar that is opening up in relation to American investors. I leave here optimistic about our coming years.
Regarding “our next few years”, what will happen to small operators? Do you believe in mergers, do you believe in large international players taking over other business? How do you envision this future?
I think there will be relevant changes regarding small operators. The rules will be in place and the investment requirement is no less. Depending on the characteristics of each player, the path will be one or the other. From merger to incorporation, or just database and, less likely, technology. Ultimately, there will be a lot of movement and adjustment once the market is regulated. Today, what we see in Brazil is a sui generis situation, not sustainable. This is a much higher than reasonable number of brands and operators. The market is very concentrated, despite being very large, in the hands of less than two dozen operators. The rest of the operators are competing for a place in this market, but hardly in a sustainable way.
So, we understand that this consolidation, based on regulation, will be inexorable. Lots of changes for small operators. I hope that the government becomes aware of the reality of these operators and that there is a treatment there that can make their formalization possible through the publication of the regulations in the Senate and, therefore, through the ordinances of the Ministry of Finance.
You mentioned technology. Is the best of global technology already in Brazil?
Look, I believe we are only seeing the tip of the iceberg. In my mind, based on regulation with legal certainty, we will see projects with another level of ambition, as they mature. I think we will start to see longer-term movements, new technologies appearing and sophistication on another level. I think we only saw the tip of the iceberg. There is a lot going on and just look at the fair and the level of the big suppliers. I understand that the innovation part has a chapter to be written in the Brazilian market based on regulation.
Source: Exclusive GMB
