With Brazil on cusp of introducing sports betting regulation, many international operators, local casinos and media brands today have a keen eye on what’s set to be one of the biggest markets in the world .
But scaling a sportsbook into a new territory like Brazil poses many challenges for C-suite and trading teams. How do you offer a localized sportsbook product while managing your company in the most profitable way, when Brazilian betting activity differs from other Latin American markets? And what sports and markets will require the most attention when you’ve got finite trading resource but thousands of sporting events to cover on a local or global scale?
For most operators, running a 24/7 sportsbook requires at least some degree of outsourcing. Yet localization of odds and risk management is essential to unlock the full potential of the Brazilian opportunity. So how do you the strike the balance?
Knowing Brazil
To begin, it’s important to understand exactly why regionalized trading matters. Launching a sportsbook or entering a new market is easier said than done. Especially when you’re competing for market share with local casino and media brands with existing recognition and international operators with big marketing budgets.
To win in the long-term, your sportsbook product needs to be highly localized and differentiated. In Brazil, pre-match betting on Brasileirão, Copa Do Brasil, Novo Basquete, English Premier league and NFL will be vital, with in-play a key growth area. But these Brazilian leagues won’t all be popular as popular in other Latin American countries.
These differences mean a homogenous trading strategy will restrict your growth and bottom-line revenues. To engage Brazilian bettors, you need to offer competitive odds and market-types on Brazilian leagues. This is only possible when you can configure odds strategy on singular sporting events and markets.
Meanwhile, bet limits must be customized. For example, U.S. operators need high bet limits on the NFL and college basketball, but these same limits might leave Brazilian operators open to losing profits. You also need modelled odds and reliable data on Brazilian sports. Many of our Latin American clients see value in customer-centric liability management to drive their odds movements, too.
It’s all about control
So when selecting a trading partner to support your Brazilian launch, flexibility of technology is a key requirement. Only then can you customise your odds, pricing, bet limits and player profiling to suit the local market.
How each operator organizes their trading strategy varies. If you employ a team of 30 traders, you will likely want to focus staff on major sports, including creating extra market-types and prop bets on Brazilian leagues, while outsourcing the remaining sports and fixtures that make up your 24/7 product.
However, operators with a smaller team will outsource all of their odds and some of their risk management, focusing on important functions like player segmentation and marketing.
Whichever model you choose, localization of strategy is essential, even when you’re aiming for operational efficiencies.
As an example, Betsul outsourced all of its risk management to Genius Sports when expanding last year, but outsourced its odds to multiple suppliers. It has a localized trading strategy for its individual player base and with Genius Sports increased football margins.
The Brazilian formula
One of the first steps to localization is working out what kind of brand you want to be. High bet limits? Unique market types? Low-margin odds? A strong accumulator product for recreational bettors?
This is important to consider when you outsource. For example, European operators want higher bet limits than many Latin American operators.
Meanwhile, in the U.S. a leading market-range on the major U.S. leagues is a key priority – with bets between $15k and $20k USD common. However for operators in Brazil, these leagues will not be the most important.
In LatAm, the average stake size is smaller than the U.S. - often between $3 and $5 USD. Accumulator betting is also vital (often upwards of 50% of total bets placed). These nuances show why localization is so important.
When launching a sportsbook in Brazil, regionalized odds and risk management will be extremely important. The winning operators in the early years will be the ones that consider this when choose their technology suppliers.
Guilherme Buso
Senior Business Development Manager Brazil, Genius Sports
Source: Exclusive GMB
