SCCG Research presents exciting investment opportunities in Brazil’s iGaming and traditional brick-and-mortar operations.
Please note that certain aspects, such as the current tax haven situation, may potentially change in the future. However, these changes are more likely to happen in the short to medium term for industries like sports betting, while others such as casinos, Esports, and poker seem to have a more stable outlook.
It is important to mention that marketing practices have undergone significant transformations. The IBJR has voluntarily adopted regulations similar to those implemented by CONAR, the leading institution in the marketing industry for self-regulation. Incorporating an “ethics layer” into the industry’s marketing activities is crucial for building a collective reputation and managing public relations in Brazil and throughout the wider Latin American region.
Opportunities for long-term marketing flexibility in Brazil are abundant. In recent years, certain brands, even prominent ones, have embraced less sophisticated and sometimes vulgar marketing strategies. This was driven by the belief that there were no limits from a legal standpoint. It’s important to note that these rules were voluntarily adopted by brands affiliated with the IBJR. While some marketing regulations may be implemented in the future, it’s crucial to recognize that Brazilian society remains open-minded and tolerant towards humor, nudity, and potentially controversial marketing approaches. This acceptance often contrasts with countries like the UK and specific regions in the US.
Furthermore, discussions with the public sector have not yet included game certifications, including online and physical slot games. Certification entities in our industry, such as GLI and BMM, are not well-known outside the industry. To enhance the industry’s reputation, integrating this aspect in line with international standards could be beneficial.
Living costs in Brazil are considerably more attractive compared to first-world countries, especially with the exchange rate of the Brazilian Real (BRL) at 5 to 1 against the USD. It’s not expected that iGaming developers specializing in slot games or live casinos will face the same strict certification requirements in Brazil as they do internationally, at least not initially. While operators still rely on licenses from jurisdictions like Malta and the UK, game licensing might be a regulatory requirement. Brazil’s main focus is on taxation and marketing, with less emphasis on understanding the technical aspects of the industry, such as certification. This could lead to more cost-effective operations in the country, as long as the taxation rates in the region are reasonable.
Considering the potential for establishing regional offices for gaming operations targeting Brazil and other Latin American and global markets is worthwhile. Many companies in the region employ staff with a focus on the Brazilian market, making Brazil a viable choice for office locations. Living in Brazil remains cost-effective, even if the BRL were to strengthen against the USD. It is a more affordable option than established industry office hubs like Malta, Gibraltar, Portugal, and London.