GMB – What can Apajo contribute with information to the regulated Brazilian market, which will effectively start operating in January 2025?
Bernardo Neves – We have already spoken with Brazilian authorities in the pre-law phase that the Portuguese case contributes in the same way as any other licensed market. What is fundamental are a few key things, such as allowing advertising for operators, because it helps consumers identify who is a regulated operator versus an unregulated one, as the media acts as a good filter. The consumer perceives it.
It is essential to properly combat illegal gambling, especially through payment methods and influencers. This is a task we have seen as requiring both depth and modernity. Brazil seems to be giving very positive signs in this regard.
It’s important to ensure there’s room for flexibility in the sector’s evolution, meaning that as challenges arise in product offerings, operational challenges, and so on, the dialogue remains positive and open between regulatory, legislative entities, and operators so that the market can evolve naturally.
With this, in general, all jurisdictions aim for the same main regulatory objectives: always protect the consumer; and channel an activity that has existed for thousands of years into the formal economy. Since the beginning of human organization, gambling has existed and will continue to exist.
Therefore, it's great that it's in a formal, regulated, and safe environment for the consumer.
The start of a regulated market brings about the need for immediate changes. How do you evaluate this?
The start of a regulated market – from my experience launching the first licensed operator in Portugal – is an exciting moment for the sector. I would say it will be for everyone involved, as it will be for the new Brazilian regulator and legislators. It’s a time when many atypical things happen.
In the first months and years, the number of players registering and starting to play stabilizes, with slight percentage increases here and there in the early days. But initially, there’s a surge of people entering these operators.
Challenges will arise, such as websites underperforming, possibly going down temporarily due to these challenges, and gradually there will be that typical confrontation with reality. Operators will learn what really happens in terms of complying with established rules, and regulators will observe from a supervisory perspective.
Therefore, it’s good to have a reassessment relatively early to understand the next steps. I would say that after the first six months, it’s wise to take a look at how things are unfolding and whether any aspects need quick adjustments. After the first year, for sure, and then from there, things will start to stabilize.
In Brazil, 120 companies have applied to the Ministry of Finance to start regulated operations. Do you think this is an appropriate number for the Brazilian market?
I am not deeply familiar with the Brazilian market. What I’ve heard is that there will be a filtering process for these 120 candidates once it comes time to pay for the license, so that number may decrease.
The Brazilian market has a scale that is not comparable to the Portuguese market, so 120 seems like a high number at the start.
There are smaller jurisdictions in terms of population than Brazil that have roughly this number of operators or even more. I would say that the Brazilian market can likely accommodate this number of operators, but over time, it’s natural that there will be a concentration process. A group will lead user preference, others will have a smaller but profitable presence, and still others will wait for an opportunity.
Again, the Brazilian market is very different from the Portuguese one. Portugal has several very defined trends, while the Brazilian market is much more diversified in terms of consumer preferences.
In Portugal, for instance, there is no initiative where clubs have brands directly associated with them in terms of online gambling.
Large global players have already expressed interest in operating in the Brazilian market. Is this a global trend?
Without a doubt. During the initial phases of online gaming expansion, many of the large groups looked at licensing and evaluated which countries they wanted to enter. As the global map became filled with regulated jurisdictions, the natural progression was to gradually choose which regulations seemed most interesting to participate in.
Some Apajo members have already applied for licenses and are quite significant in this initial pre-licensed phase. During SBC, I heard about interest from Brazilian players not directly involved in online gaming, but who are now looking at the market and thinking, “Well, if we’re going to do this in Brazil, it’s worth looking at Portugal.” And, of course, there are international and even Portuguese players looking at the Brazilian market with great interest.
Do you see the Brazilian market as moving toward becoming one of the world’s leading markets? What’s your expectation about that?
I think it’s very possible. It will depend on how the practical reality unfolds. In terms of population, interest in gambling, and the novelty factor, I’ve heard statistics suggesting that Brazil, within 12 to 18 months, could take a leadership role internationally.
Now, we need to see how the practical reality plays out, whether the regulations will work, whether the rules will be implemented, and whether operators will offer a good user experience and meet the demand. That’s one of the main challenges in regulated markets.
Players tend to gamble anyway, but they’ll choose regulated operators if the offering and experience are good, and if there’s a strong role from authorities in informing the public about regulated operators and fighting against illegal ones.
Brazilian operators have been working hard to promote responsible gaming as entertainment. Is this the right approach to stabilize the activity in an appropriate and socially accepted way?
I think this is a fundamental cornerstone. In many jurisdictions, the sector has realized this and thought, “We have an appropriate foundation, and now we need to see how to project consumer protection.”
In some cases, actions were taken with good intentions but not as well-suited to the situation. The sector, with its knowledge of how players behave and what the indicators are, should take the lead on what responsible gaming is today and what it will be tomorrow.
How can we combat irresponsible influencers who don’t know what they’re talking about and educate them properly to present the activity as leisure and entertainment?
Without a doubt, through information. I think it’s essential that both operators and public entities approach the influencer marketing sector and provide all the necessary information.
In Portugal, as Apajo was combating influencers, we received many communications from them saying, “I have to admit that I promoted illegal operators, but it was out of ignorance; I didn’t know.” These were influencers we didn’t even know.
Therefore, it’s crucial to have comprehensive awareness campaigns, for licensed operators, who will likely have close commercial relationships with several influencers, to engage in education campaigns, and for influencers themselves to propagate responsible behavior. It’s in their best interest to have their peers behave appropriately.
Everyone involved—state entities, operators, and influencers—should take the lead.
The incentive system heavily favors those who promote illegal operators because they pay more. Authorities need to be aware of this since they target audiences that regulated operators do not, such as players with gambling problems who have already self-excluded from the regulated market, or minors who, when identified during registration, are not allowed to play. Not only are these operators benefiting from an activity they shouldn’t be involved in because they don’t have a license, but they are also targeting audiences who shouldn’t be gambling.
Does Apajo only represent regulated and licensed operators? How many members do you have?
Apajo represents eight licensed operators in Portugal that are authorized to operate in the Portuguese market. That’s our space, and we believe it’s relevant to represent. There are other associations that defend different interests. In Apajo’s case, we work with eight operators, who represent the majority of the business, surely over 80% of the sector.
Source: Exclusive GMB
