This is a continuation of an I.M. round table on sports betting in Latin America with Maximiliano De Muro, chief executive and founder of Latin Interactive Gaming Ltd., and Almir Ribeiro, owner of Betboo.com. To read the first part, click here.
Ms. Kozlowski:
What's something you'd wish you'd known either about sports betting or the Latin American market prior to your business involvement in the region?
Mr. Ribeiro:
Again it involves a local offering. For example, now it is time for the regional soccer leagues in Brazil. We are offering 21 different regional leagues: We offer rugby in Argentina, volleyball in Brazil, futsal (an indoor version of soccer) in Brazil and all first division soccer in all South America.
They love to bet in European matches, too, but if you do not offer the local leagues, they will miss it. If you offer local sports and local leagues, they will feel "at home."
Mr. De Muro:
The Latin audience has a lot of passion when they play for money, especially in sports betting.
Ms. Kozlowski:
Mr. Ribeiro:
It is a process. It is very easy for some companies to say that they are global, but it is very difficult to do that. So, our target is to be "global" in Latin America. For us, it is a big challenge.
Of course, we have customers from Europe (U.K., Germany, etc.) and Asia. We also have customer service in English, and our focus is Latin America.
Mr. De Muro:
In my case, I have a lot of experience getting gaming traffic. It is not difficult to do it from Latin America, but the value (or player value) is lower than other regions. Also, there are some differences inside Latin America . . . traffic from Brazil is better than traffic from Venezuela or Ecuador.
Ms. Kozlowski:
Mr. Ribeiro:
Mr. De Muro:
There are difficulties to deposit and difficulties to get the "right product" because of localization. Also, the economy factors into the matter.
Mr. Ribeiro:
A baby in England at birth will know how to bet in soccer, a baby born here . . . his father does not know how to bet. So they are learning; you have to teach them. This makes them to spend less money.
We have some examples of people who want to bet in the sportsbook, but they do not understand the odds. So then we have to explain all the tips.
Ms. Kozlowski:
So, how popular is sports betting in Latin America compared to other forms of gambling?
Mr. De Muro:
Mr. Ribeiro:
Ms. Kozlowski:
What's the most popular form of gambling in the region, in your opinion?
Mr. De Muro:
In this order: 1.) Sports betting; 2.) Casino; 3.) Poker; 4.) Bingo. But bingo is growing like hell. And poker is too.
Mr. Ribeiro:
It is an unexplored culture that some operators are now realizing. People in South America love to gamble . . . love sports . . . love to bet. What you have to do is offer them the best you can.
And in Brazil this order would change. Bingo is probably No. 2.
Ms. Kozlowski:
Mr. Ribeiro:
Casinos have not been allowed in Brazil since the 1940s, and bingo was allowed. So let’s say that bingo took the place of casino for the people who love gambling.
For example, in Europe, 90 percent of bingo is played by women. In Brazil, it is more of a fifty-fifty split because it was the only land-based game allowed some time ago. Nowadays it is not allowed in land-based as well, but there are many projects going on to get the government to allow it again. It is just a question of time.
Ms. Kozlowski:
Getting back to sports betting, do you see more people betting via land-based shops or remotely?
Mr. De Muro:
Mr. Ribeiro:
In Peru they can do land-based betting. I’ve heard that it will be possible in Argentina, too.
Ms. Kozlowski:
In Peru, land-based betting is big?
Mr. Ribeiro:
It is not big in Peru, but it is growing. Mobile will be big, I think.
Ms. Kozlowski:
Besides soccer, what sports are likely to attract the most punters? Which are the most popular and in which countries?
Mr. Ribeiro:
In Brazil: Tennis, American sports, Formula One and volleyball. They do not bet on golf, cricket, rugby and winter sports.
In Argentina: Tennis, American sports, Formula One and local rugby. And like Brazil, they don’t care for cricket, golf or winter sports.
All the rest of the countries are pretty much the same, except in Venezuela and Mexico you can probably put American sports and local baseball as No. 1. because those are their favorite sports.
Mr. De Muro:
In my opinion, it’s tennis, basketball and formula one . . . boxing and American sports as well.
Ms. Kozlowski:
Do countries in the region recognize various forms of gambling, skill gaming or casual gaming as a social pastime?
Mr. De Muro:
Yes, but that type of gaming is very low in net revenues for the operators. At least for now.
There are a lot of people playing skill games like chess, but they need more business development.
Mr. Ribeiro:
Yes! Let´s say that poker is huge in Brazil and Argentina . . . many people play poker with friends in their home -- for money or for fun.
Mr. De Muro:
Oh, I’m not talking about poker. I can't consider poker as a skill game. Sorry. I was talking about chess, checkers, monopoly . . . sites like Pogo.com.
Mr. Ribeiro:
Yes and many also consider sportsbook as skill game. In fact, if you look at customer behavior poker players have a lot in common with those who place bets on sports and vice versa.
Ms. Kozlowski:
Getting back to localized products, what products are there a market for that have yet to be developed?
Mr. De Muro:
Mr. Ribeiro:
The 10 million euro question. Ha! Should I answer?
I believe a lot in a simple game like scratch. It may reach the people with lower incomes and it would be very cheap to play.
For example, in Japan they have the pachinko. Betboo did a video bingo machine called pachinko. The bonus area is like a pachinko game and it was a tremendous success here! You have always to innovate.
Mr. De Muro:
Ms. Kozlowski:
Mr. De Muro:
Yes, some countries have an explicit law against all type of gambling, even online.
The case of Venezuela is a good example. If a Venezuelan player wants to make a deposit in a foreign site, he needs to go to his bank, sign some papers, and in most cases, he will get a negative response from his bank because that deposit will be made on a "suspicious site.” This goes against the instant-play feeling that a player could have.
In other countries, you must have some offline connections (land-based casinos, offline marketing agencies, etc.) in order to run successful marketing campaigns. This may apply for all countries, in fact.
Mr. Ribeiro:
It is not easy to enter in some areas because of low internet penetration. In my opinion, in areas like Mexico, it is important that you have some connection with a big land-based operators. If you do not, it can be a waste of time.
Ms. Kozlowski:
What have been some major technology developments in the region, and how have they impacted the remote betting industry?
Mr. De Muro:
The mobile industry is growing quickly. Everyone (regardless of his social condition) has a mobile. This will impact directly in the remote betting industry focused in the mobile area. From simple to complex games in terms of technology, all is possible with a mobile phone. Last but not least, it is important to have resolved all issues related with payment processing by mobile.
In the other hand, we have a strong development of the broadband access (ADSL, cable) in the major countries of Latin America, giving this more opportunities to get connected to a wide number of "new potential players."
Mr. Ribeiro:
Internet penetration is very big. One interesting thing -- Brazilians are the No. 1 in the world with more time connected in the Internet. A Brazilian spends more time in Internet than Americans or the Japanese. Some countries still have low internet penetration, but it is just a question of time.
It is growing very fast -- very, very fast. Internet is faster and cheaper in Brazil, Argentina and many other countries. More people can have access to it. Also there is a big increase in mobile services. In Brazil mobile is a fever, everyone has it -- even poor people have it. It is cheap and easy to get one.
Ms. Kozlowski:
Does the current regulatory environment across Latin America for Internet gambling predominantly favor government-run lotteries/monopolies over commercial operators?
Mr. De Muro:
Online gaming is a truly new tendency in Latin America. Governments are reluctant to “understand” this new wave, and they prefer to “delay decisions” The main reason is to have a grey area or to avoid forbidding 100 percent of all activities related with online gaming. There are not countries with legalized online gaming (yet).
Mr. Ribeiro:
Yes, I think that Latin American countries did not wake up to this reality . . . it is a new thing here. It is completely different from the battle in Europe between state interest monopolies and operators.
Ms. Kozlowski:
How are operators using celebrities from the sports world to promote their brands? Why is this so popular in Latin America? Why might we not see this elsewhere in the world?
Mr. De Muro:
Countries like Argentina and Brazil have a lot of stars around the world in soccer, basketball, tennis and other sports, but they are in Europe mostly. And a lot of fans follow them.
For now, it is not popular to use celebrities to promote their brands in Latin America because all that stars are already in Europe, and they are using them for local campaigns in some countries in Europe. Maybe in the near future those operators will replicate the success all over Latin America!