The betting market has never been as strong as it has been seen in recent years
“The betting industry has taken the whole of the Brazilian territory by storm, and it doesn’t take much effort to see its presence everywhere. From advertising panels in football to social media ads, where online casino companies show their faces and confirm the relevant conquest of the markets in the national territory”, said Journalist and technology and games expert Igor Shimabukuro, who has analysed growth of activity in Brazil.
Let justice be done. Gambling is not something relatively new in Brazil, where, for instance, the popular illegal numbers game, Jogo do bicho was created in 1892. Also, there were brief periods of time in the last century, the 10s, 30s, and 40s, when casinos could operate freely on national soil. However, the Federal Lottery remains more alive than ever and turns exactly 60 years old in 2022.
But while this practice is rooted in Brazil’s history, it is inevitable to note that the betting market in the country – specifically with regard to online betting services – has never been as strong as it has been seen in recent years, and to understand better about the recent betting boom, legal issues, the industry behind the scenes and the risks behind new practices, TecMasters has dived into this controversial segment to talk to market experts about the betting boom to demystify the ins and outs of this up-and-coming sector.
The betting market is one of the best market bets
Before understanding the reasons for recent high, it should be noted that the global gambling market has been growing for some time. Since 2009, the segment has shown year after year advances around the world, which reveals a massive interest from players.
According to a Statista survey, the global market for the segment has more than doubled in 10 years, with a market value of US$20.51 billion in 2009 to US$55.10 billion in 2019, and by 2020, the segment was already closing on to US$60 billion.
However, the curious thing is that this ascent didn’t not stop there, as the segment observed a “boom” mainly from 2020, when the planet was affected by an unprecedented health crisis. And since then, as several industry areas fall, the betting industry has managed to increase.
From 2020 to 2021, growth in market value was 26%. However, according to Polaris Market Research Analysis, the gambling market is expected to continue to grow over the next eight years with revenues expected to reach US$205.60 billion by 2030. Needless to say, the data encompass the entire global scenario, but in Brazil, the situation has not been much different.
Brazilian interest also on the rise
If out there the betting scenery is high, around here, in Brazil, it’s no different. However, in the country, the most popular betting segment covers the sports industry, which is slightly different from online casinos or popular gambling games, because it requires a study of the chosen sport beyond the luck factor.
Speaking of numbers, Keyword Planner, Google’s search engine, found that about 35,700 searches related to the topic are made monthly by the Brazilian public. This makes local interest in the sports betting market the largest in South America, well ahead of other countries such as Colombia, Peru and Argentina.
Cool down a bit, but is this legal in Brazil?
“But are these practices not prohibited in Brazil?” some may be wondering. After all, much is said about the growth of the market, but little is said about the legal issues in the country, and in this sense, the betting practice still generates several doubts.
Many are based on Decree 9,215 banning gambling in the country in 1946. It turns out, however, that that decree did not take into account the arrival of online betting services – not least because there was no internet at that time – but with contemporary changes, some legal items have been recently revised.
In December 2018, then President, Michel Temer passed Law 13,756/2018 that now allows fixed quota bets – or sports betting – practices in which the conditions of a winning bet and the multiplication factor of his bet that will result in a predefined prize, to so speak. And Sports betting is in this king of betting dance is the only modality allowed in Brazil, as put by Marcelo Mattoso Ferreira, partner of the law firm Barcellos e Tucunduva Advogados, and active in the games and esports market.
“The concept of gambling, defined in Article 50, §3 of the Criminal Misdemeanour Act, may end up encompassing numerous activities involving “luck/randomness” and the “gain/loss” binomial. The only modality currently allowed in Brazil is fixed-quota sports betting,” added Ferreira.
The proposal to regulate online betting is still stuck in the Senate and needs to be voted on by December 12 this year, and while this does not happen, companies in the sector benefit from this to offer their services in Brazil with headquarters and operations from overseas.
With lack of regulations in Brazil, all actions by these operators take place without taxation or fees — and perhaps this explains, in part, the emergence of so many companies in this segment in recent years. I all, these modalities are not considered illegal, but it is the Brazilian country that is the loser as lack of legislation stops the country from benefiting from taxes which could be reversed in several areas.
And how to explain this betting boom in Brazil?
“On the matter of legal issues, the law passed in 2018 may be one of the main factors for the warming up of this market in the country. But of course, other factors also come on the agenda”, points out Leonardo Baptista, CEO of online payment platform Pay4Fun.
“The “boom” in the betting segment can be attributed to the law passed in 2018, which brought more visibility to this industry, but other factors have also contributed, such as the pandemic, which kept people isolated in their homes and contributed to the search for online entertainment, greater exposure of sports betting sites via advertising and, of course, the fact that gambling is in the Brazilian’s DNA” added Baptista.
It is almost a domino effect, with the possibility of offering services in Brazil without fees or taxation, as it attracts more and more gringo companies, with increase in their profit margins and investment more and more in advertising and sports sponsorship in the country.
It takes just a quick analysis of the teams taking part in the Brazilian premiership, the Serie A, to understand the size of this, with all 20 clubs enjoying bookmakers sponsorships: América-MG (PixBet), Athletico-PR (Betsson), Atlético-GO (AmuletoBet), Atlético-MG (Betano), Avaí (PixBet), Botafogo (Blaze), Bragantino (NetBet), Ceará (Betcris), Corinthians (galera.bet), Coritiba (Dafabet), Cuiabá (Luck Sports), Flamengo (Pixbet), Fluminense (Betano), Fortaleza (Betcris), Goiás (Pixbet), Internacional (EstrelaBet), Juventude (Pixbet), Palmeiras (Betfair), Santos (Pixbet) e São Paulo (Sportsbet.io).
No matter what means of communication is there, there will be some advertisement of some “betting company”, and as a result, more advertising tends to result in more consumption. And the more consumption, the more attractive the Brazilian market will be for other players to enter the betting game.
Not least, it is possible to attribute the rise of the betting market in Brazil to the economic crisis experienced in the country. Many are driven by the idea that the activity is a form of easy money, with leading daily Globo’s survey which found that 52% of respondents entered the sports betting segment to increase income.
