Opportunities for Operators and the Role of Geolocation in Brazil
The regulated online gambling market in Brazil is set to be an exciting new market for operators as regulatory changes pave the way for legal and accessible online betting and gaming. This evolving landscape presents substantial opportunities for operators looking to enter or expand within the Brazilian market.
A crucial aspect of this development is the role of geolocation technology in ensuring compliance and enhancing the user experience. Let's explore the current state of the online gambling market in Brazil, the opportunities it offers, and the critical importance of geolocation as the market opens up.
The Current State of the Online Gaming Market in Brazil
Brazil has a long history of gambling, but for many years, most forms of gambling have been heavily restricted or illegal. However, recent legislative changes are transforming the landscape. The Brazilian government passed Law No. 13,756, which laid the groundwork for the regulation of sports betting. This move has been a significant step towards broader legalisation and regulation of online gambling in the country.
The growing appeal of this emerging market is clear, with 113 operators having applied for licences, expressing a desire to participate in the regulated market. Despite the previous regulatory constraints, Brazilians have shown a keen interest in online gambling, although through a grey market, but this demand indicates a robust market potential once operators can legally enter the scene.
Opportunities for Operators
Growing Market Demand:
The Brazilian population is over 210 million, with a significant portion being young and tech-savvy. According to Statista, the number of internet users in Brazil reached 165.3 million in 2023, with a penetration rate of approximately 78%. This demographic is likely to embrace online gambling, creating a large user base for operators.
Regulatory Advancements:
The progressive regulatory environment is expected to continue evolving, offering more clarity and stability for operators. According to Vixio’s Brazil Outlook Report, the country’s online sports betting and gaming market could reach just under US$5bn in annual revenue within five years. This would make the regulated market one of the largest in the world and surpassing the likes of Australia, France and the states of New Jersey.
Diverse Gaming Preferences:
Brazilians enjoy a variety of gambling activities, from sports betting and lotteries to poker and casino games. Operators can tap into this diverse interest by offering a wide range of gaming options to cater to different preferences. The National Federation of Banks (Febraban) reports that approximately 20 million Brazilians bet on the lottery at least once a month.
Regulations and the Importance of Geolocation Technology
The initial regulatory framework for Brazil’s gambling market clearly indicates that entering this space will involve a high barrier to entry. Operators must pay an upfront fee of approximately US$6m for a five-year licence, along with meeting high minimum capital thresholds. With the market set to launch on January 1 2025, operators were given a 90-day deadline to apply for gambling licences before 20 August.
Now that all technical documentation standards and regulatory expectations have since been released, operators know what to address when it comes to complaince elements such as ID verification, data centres, geolocation technology, and more.
For now, let’s look at the role of geolocation technology when it comes to the Brazilian market, as we know this will be a crucial entry requirement. Below are 5 reasons why.
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Regulatory Compliance:
Geolocation technology ensures that operators comply with regional regulations by verifying the location of users. This is vital in a country as large and diverse as Brazil, where different states may have varying regulations regarding online gambling.
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Fraud Prevention:
Accurate geolocation data helps operators detect and prevent fraudulent activities. By verifying the location of users, operators can identify and block suspicious activities, ensuring a safer gambling environment.
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Responsible Gambling:
Geolocation can be used to enforce self-exclusion programs and other responsible gambling measures. Operators can track users’ locations to ensure they are not accessing gambling services from restricted areas or beyond set time limits. It is an area we’ve seen Ontario focus more on this year, particularly.
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Enhanced User Experience:
By leveraging geolocation data, operators can provide personalised content and promotions based on users’ locations. This enhances the overall user experience, making the operator's platform more engaging and relevant to individual users.
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Market Insights:
Geolocation data offers valuable insights into user behaviour and preferences across different regions. Operators can use this information to tailor their offerings and marketing strategies to better suit the local market.
Why GeoLocs is Best Placed to Support Operators
GeoLocs stands out as the best-placed geolocation compliance provider for operators looking to enter new markets, including Brazil, thanks to its:
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Proven Track Record:
GeoLocs was the first geolocation provider to go live in Ontario, supporting over a dozen operators in successfully entering the market and performing over 18 million look-ups per day. This experience has equipped us with the knowledge and expertise to navigate the complexities of new market entries.
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Dedicated Compliance Team:
Our dedicated compliance team ensures that all services adhere to local regulations, providing operators with peace of mind and reducing the risk of non-compliance.
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Improved ROI:
GeoLocs offers a low cost-per-player per month for compliance checks. The platform can be configured to make checks based on distance to border, meaning if a player is far away from borders checks are less frequent. Not only that, the self-service and low-code platform minimises operational costs without compromising on quality, privacy or compliance.
As Brazil's online gambling market opens up, operators who partner with GeoLocs will benefit from our proven track record, compliance expertise, and robust support infrastructure. Our geolocation technology not only ensures regulatory compliance and fraud prevention but also enhances the user experience and provides valuable market insights. With GeoLocs, operators can confidently navigate the exciting opportunities that the Brazilian market presents.
For more information on the GeoLocs platform and its capabilities, contact us at hello@geolocs.io