Latam traffic analysis: Sports betting and casino

Latam traffic analysis: Sports betting and casino

Martin Calvert from leading search marketing agency Blueclaw analyses the traffic, regulation and potential in LatAm’s highest-profile markets of Brazil and Colombia for iGB Affiliate. 

Published 6th September 2017

The betting and gaming opportunity in Latin America is extremely significant, with rapid growth leading to multi-billion dollar revenues in the industry.

This is a part of the world where passion for sport of course runs deep, but lottery and casino sites are also experiencing high interest.

Part of this upsurge in interest across Latin America is fuelled by leaps in technology, bringing mobile gaming to new swathes of the population each year.

Some of the largest current opportunities can be seen in Brazil and Colombia, and it is those countries that we’ll discuss here in terms of their traffic, regulation and potential.

For those looking to capitalise on these dynamic and energetic markets, it’s important to do so based on solid insight. For those new to the region, we hope this short article provides a useful first step. 

Brazil trends and market opportunity

The Brazilian market opportunity is defined by scale, with a population of 207 million and mobile penetration hitting new highs all the time.

According to the Mobile Marketing Association, over 90% of mobile internet users in Brazil aged 34 and younger now have a smartphone, with older demographics not far behind.

Of late, internet use via mobile has recorded double-digit growth year-on-year, and the growing young population of sports and gaming fans is keen to explore online betting opportunities.

This is evidenced in the traffic growth of key sports betting sites targeting the country – some of which will be very familiar to European readers.

Although the road has been rockier for some than others, across the board web traffic is on the up, with plenty of scope for smaller challengers in sports betting to make their mark.

In casino and games of chance, the explosion in traffic is even more evident, coming as a result in part of sites  becoming more effective at serving the needs of the market with more fitting offers, compelling odds and language targeting.

While gambling as a niche still comprises approximately 0.4% of Brazil’s web traffic, those looking to capitalise on the market would be wise to look closely at what this consists of – sports remains the biggest sector by volume, but many may be surprised at the passion for lottery terms, as well as the growth trajectory of search traffic for sites that focus on games of chance.

As technology and supporting infrastructure continues to develop, we can expect further growth in the market, especially as customer experience becomes a wider part of the competitive strategy of operators and affiliates.

‘New’ markets often suffer as established operators move in, without a clear focus on the local language, culture, habits and preferences. As the market heats up and more local challengers emerge, player experience will become an essential aspect of winning players and maximising FTDs.

As regulations become more friendly to the industry, new scope for growth will emerge.

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Law and regulations in Brazil

As in other Latin American states, the legal status of different betting activities is a little bit mixed. Officially, betting remains illegal across the board, however prosecutions are practically non-existent and there are hints the government is softening, aware of the revenue potential in terms of tax.

As it stands, the main opportunity is for firms outside of the country to make it easy for Brazilian players to participate, and as we have seen, international operators have clearly embraced the potential of the country.

For operators outside of Brazil and those readers not aware of the regulations there, it may come as a bit of a surprise to see the volume of web traffic arriving from Brazil to offshore sites, the main reason being the lack of options for official betting within the country.

If your site is one that is picking up traffic from Brazil and other Latin American nations, looking at ways to accommodate players and payments from these parts of the world can unlock new revenue opportunities. 

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Colombia trends and market opportunity

Though Colombia only has a population of 48 million, the scope for growth in the sector is significant, and betting is established as a popular pastime.

In physical locations throughout the country, slot machines are a regular sight with huge multi-million dollar revenues achieved from small stake bets. 

As technology and online payment options advance in Colombia, we can expect to see this passion for gaming translate into online success for the operators best able to target the country.

In terms of traffic volume for the major sites attracting visits from the country, there are some interesting trends.

Search volumes are stable and rising in most cases (with the exception of 888, right), with significant reach for names that are less familiar to European betting and gaming professionals.

Likewise, in casino operations, we see more home-grown names – which is to be expected given the comparatively more open regulatory framework, in comparison with Brazil.

The potential for casino and lotto companies to do well in the country has been well noted – games are popular, legal and often defined by a strong local, regional-level identity.

It’s not just operators which are looking into the market potential of the country – businesses providing underlying technology that will help to specifically maximise Colombian customer experience – and value – have been talking up the potential of the region.

Speaking ahead of the Fadja gaming event in Colombian capital Bogoto, the chairman of betting software company BtoBet was enthusiastic about the market’s potential; “We firmly believe our platform and software – based on artificial intelligence – can perfectly assist all operators of South American emerging gaming countries to drive their business, easily.”

Although there is significant scope for operators to capitalise on promising growth in visitors and searches, those entering the market shouldn’t expect an easy ride.

With major operators poised to invest more in Colombia and other

Latin American nations, and technology providers emphasising the need to provide differentiated, high quality player experiences, those enterting the market can expect competition to build visibility and capture market share.

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Regulations in Colombia

In contrast to Brazil, there are fewer official restrictions on betting and gaming in Colombia.

According to Frixo, there are no laws to deter Colombians from betting at virtual casinos and online bookies – at present approximately 462 offshore sportsbooks accept Colombian players, including at least 92 with Spanish- language site support.

Increasingly European in its approach to gambling regulatory approaches, games are largely taxed according to a 2015 law that places gambling activities under the definition of ‘novelty games’.

While sports betting is legal in Colombia, it is currently operated entirely by Intralot which won the associated government tender. However, the company does not offer online sports betting – meaning that there is no completely legal way to bet on sports online through a domestic company.

However, with licensing procedures and technical standards in place, there is increasing scope for operators to be recognised as official, in contrast to the slightly ambiguous nature of the industry in Brazil, and there are no practical restrictions on Colombian players betting on international sites.

Though there is much to be optimistic about in terms of the growth of the sector, Colombian regulators stated at the 2017 Ibero-American Gaming Summit that they will aim to work more closely with colleagues from other Latin American nations on regulatory issues.

There is good reason to be optimistic and think that this cooperation might result in for a more standardised (and simplified) approach to regulation across the entire region, though operators should be watchful in case new regulation affects their operations or ability to enter the market.

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The future view

While Brazil looks to open up more significantly in the near future, some commentators are cautious about a potential increase in regulation in Colombia. Official regulator Coljuegos recently delivered a blacklist of 325 online gambling sites to the Ministry of Information and Communications Technology, requesting that associated ISPs be blocked from Colombians trying to access them.

However, as ever, money matters and the tax windfall potential for Latin American governments which properly embrace the industry is compelling. For operators, the time to prepare is now, as massive audiences of potential players with a clear passion for gaming already exist.

The combination of technological reach and a more tailored customer experience, meeting the needs, passions and expectations of Latin American audiences, will lead to great results for the companies which are prepared to compete – and win – in this most exciting of markets. 

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