Constructing a Long-Term Sports Wagering Marketplace in Brazil
## Constructing a Long-Term Sports Wagering Marketplace in Brazil
Brazil possesses a vast football enthusiast base, making its market a possible contender for one of the biggest worldwide. In a discussion with iGB, Playtech’s Head of Policy, Francesco Rodano, highlighted the significance of operators guaranteeing a secure and enduring launch of the market, exploring how they can manage the initial phase of intricate rules.
Following four years of preparation, the Brazilian sports wagering market is anticipated to officially open later this year. Durability is vital.
Francesco Rodano, Playtech’s Head of Policy, believes the market holds enormous potential. “The size of the unregulated gambling market is substantial, and Brazilians’ enthusiasm for sports is intense, suggesting it has the potential to become one of the largest regulated markets globally,” he stated.
Playtech is prepared to contribute, whether it’s forming strategic alliances or joint ventures with leading operators in local markets, as they have done in Mexico with Caliente and in Colombia with Wplay, or providing their products and services to local and international licensees of any size.
Responsible Gambling
However, new opportunities also bring new hazards, and Rodano believes that incorporating sustainability into Brazilian sports betting from the start is vital.
He believes that the market opening will encourage operators to prioritize customer protection, aligning with broader industry trends. Sustainable gaming emphasizes maintaining a balance between finances and play to avoid continued gambling after losses.
Operators now need to not only identify potential risks but also take action by setting limits to prevent harm to players’ mental and financial well-being.
“Even if only a small percentage of players may be affected by gambling, identifying them early is crucial and a moral obligation,” he explained.
“There are many ways to engage with at-risk players, from generic emails to personalized interviews conducted by safe gambling experts or even psychologists. All operators should be able to activate the most appropriate intervention measures based on each player’s risk level. At Playtech, they have developed a first-level interaction tool that is proving to be very valuable.”
In our tests, AI-driven personalized interventions were 21 times more successful in stimulating responsible gambling habits, such as establishing deposit limits, compared to conventional generic email responsible gambling campaigns.
Artificial intelligence technology is gaining significance in the gambling sector.
Historically, gambling operators have utilized straightforward scoring systems based on basic thresholds, such as deposit or wager sums and time spent gaming. This uniform approach has a fundamental flaw: it tends to treat all players equally, while at Playtech, they acknowledge that “human behavior is far more intricate and varied.”
“Online gambling provides us with access to a wealth of personal data that was previously unavailable,” stated Rodano. “And it’s not just gambling data, which is already very detailed. Considering how ‘connected’ we are, there are numerous other sources. I am aware that VIP managers examine players’ activity on social media platforms, for instance, if they suspect something is happening.”
“Machine learning presents a valuable opportunity to ‘interpret’ people’s behavior. For example, in 2019, an AI poker bot developed by Facebook and Carnegie Mellon University defeated some of the world’s top professional players. Utilizing AI, the software’s comprehension of human behavior surpassed the players.”
Playtech is adopting this technology through its safer gambling analytics platform BetBuddy.
This program intends to “interpret” player conduct to pinpoint players at risk early on. It relies on machine learning algorithms that examine each player, offering up to 70 behavioral indicators to align them with patterns of known affected players (e.g., players who frequently wager but eventually choose to self-exclude or declare they’ve been negatively impacted).
Rodano clarified, “These models are bolstered by ‘expert guidelines’ to further refine the data-driven method, and most importantly, these models are entirely transparent. The list of individual indicators driving risk allows operators to customize interventions as mentioned previously, which is more effective than conventional generic interactions.”
“To our astonishment, our research revealed that 76% of Brazilians support the use of AI by gambling companies to detect potential at-risk players.”
Potential Hazards
Playtech recently conducted a tailored consumer survey in four Latin American nations, including Brazil, to explore key issues related to responsible gaming in each region. In Brazil, 56% of respondents stated they had already gambled, despite the absence of regulation. Most of them argued for improved local regulations and more information about responsible and sustainable gaming tools.
The survey uncovered that Brazilians’ primary concern when gambling is losing all their funds due to addiction.
In addition to these, there are also dangers of deception, game tampering, missed bonus payouts, privacy infringements, and a growing risk of funding illicit activities.
Rodano points out that since the lawful market has not yet opened, many of the betting companies that local players interact with are from overseas and tax-free regions, where no consumer protection measures are in place.
Brazil’s ruling legalized sports betting, but online gambling remains uncontrolled. Rodano stresses that other forms of gambling need to follow suit.
Thus, he emphasizes that the regulatory framework needs to encompass casino games and the popular forms of sports betting that consumers are seeking, otherwise, there will be little motivation to move to the legal side of the country.
“This is a potential risk factor for Brazil, as Law 846/2018 only provides for the regulation of sports betting, while casino games (which account for almost half of global gambling revenue) will remain prohibited for now, which will leave Brazilian players without a legal alternative to their offshore counterparts.”
Collaborating, not competing
“We believe that a gambling regulatory framework can only function when all three parties – the government, the players, and the gambling industry – achieve their respective objectives,” Rodano states.
He continues by saying that suppliers play a neutral role.
We work together with numerous consumer-focused businesses, who frequently engage in intense rivalry. However, this hasn’t hindered our capacity to commit time and resources to safer gambling exploration and advancement.
We have a twofold obligation. On one side, we aim to create safer and more enduring gambling solutions that are grounded in evidence and thoroughly tested. These solutions should prioritize the well-being of individual players, rather than applying a one-size-fits-all approach, as we are all unique.
On the other side, we must educate decision-makers and industry colleagues about the potential of this strategy.
To ensure the success of this endeavor, he stated, increased cooperation throughout the industry is essential. Rodano recognized that for a market to thrive, operators need to focus not only on competition, but on collaboration across the entire gambling sector.
“Numerous machine learning programs and trials are being undertaken by various operators, but the findings are often not shared with others,” he explained. “Safeguarding everyone’s health and enhancing well-being should be a collective, industry-wide endeavor, not a means to gain a potential competitive edge.
“By sharing our achievements, particularly our setbacks, we can learn together and contribute to the long-term sustainability of the gambling industry.”
Playtech is dedicated to prioritizing responsible gaming in Brazil, mirroring their commitment in established European markets. They firmly believe that safe gambling is essential for the long-term well-being of the industry.
Playtech has been actively collaborating with regulatory bodies worldwide and has witnessed the implementation of behavioral analysis and personalized interventions in nations such as the Netherlands, France, Spain, Germany, and Sweden. Playtech is enthusiastic about partnering with Brazilian policymakers to guarantee the responsible and sustainable development of the legal gambling sector in Brazil.
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