How has the performance of the Colombian market compared with your expectations when it opened?
As the first major market in the LatAm region to enact regulation, there were always going to be high expectations for success, and we’re glad we proved ourselves correct. We provided the platform for BetPlay, the first operator to go live in the Colombian market following regulation, and the initial growth figures exceeded all forecasts.
In my view, one of the key factors for the market’s outstanding performance has been the stellar work of Coljuegos, the regulatory body. Sensible legislation which protects consumers while allowing opportunities for growth has worked wonders for the market’s development, and we hope to see other regions follow the example set.
Were there any misconceptions about the market when it opened? Has anything surprised you about the market?
The LatAm market is a dynamic and complex region where regulatory changes depend on political decisions which are sometimes subordinated to economic circumstances – many of which are outside the industry’s control. I believe for many, there was an element of hesitancy as to how keen regulators would be to work with international operators.
In reality, that couldn’t be further from the truth. Currently, around four fifths of online gaming revenue in LatAm is offshore and unlicensed. As national and regional governments begin to enact regulatory frameworks to allow international operators to enter, they’re more than aware of the windfall in revenue which will no doubt greatly benefit local economies – which means regulators are taking an increasingly open-minded approach to online gaming.
To what extent does football dominate Colombia's online sports betting market?
There is no questioning the popularity of football in the Colombian market. It is almost part of the Colombian identity. The potential for growth in the gaming market should never be underestimated however, while we’re still in the growth stage. More and more Colombian bettors are becoming accustomed to new betting markets and alternatives to the national past-time, which we expect to continue seeing a growing interest in.
Where does Colombia rank for you, in terms of its importance versus other markets?
Since pledging to block illegal gambling websites in November 2015, Coljuegos has introduced a robust regulatory framework, and issued the country’s first sports betting licenses. Several other licences have been issued since, as the market continues to develop.
As LatAm’s first market to introduce a European-style licensing framework, it is a logical entry point for the majority of operators – which ranks it high in terms of importance.
But there are also other opportunities on the horizon; Brazil remains the biggest potential prize, and lawmakers continue to discuss the possibility of regulating the sector. This process will not happen overnight, but nonetheless, operators will already be laying the ground work for market entries.
Elsewhere in the region, other jurisdictions are emerging as viable online propositions, particularly Mexico and Peru.
Have you had to tailor your offering to Colombian players?
Of course. The most important thing to remember about LatAm is that it isn’t one homogenous region. Just as operators tailor their products to Spain or Italy, they also need to do so for regulated markets in Latin America.
While it may sound simple, tailored offerings for any operator looking to enter the markets here are essential. For instance, sportsbooks need to ensure local events are at the top of the page and easy for customers to access. This may sound simple, but legacy platforms can struggle to implement this degree of flexibility.
What are the chances we will see some of the biggest international operators enter the market in the coming years?
As various LatAm markets begin to mature, there will be space for a range of approaches, but all must be grounded in an understanding these markets need bespoke and tailored solutions.
We have seen many operators learn this lesson the hard way in Europe. When Spain regulated its online market in 2012, those operators that tried to roll out products that had only been tested in mature markets such as the UK and the Nordics quickly saw this would not be enough to power sustainable growth. Instead, it is those operators who were flexible – particularly from a regulatory and marketing perspective – that drove the market forward and grabbed a significant share.
There will also be other technical considerations where a local approach is key. Without a wide range of local payment provisions for example, operators will struggle to gain traction in LatAm’s emerging markets.
How do you see the market developing over the next few years?
We expect growth across the regional markets to be ramped up in the coming years, with figures forecast by H2 Capital estimating online gaming gross win to almost double to €1.4bn by 2024 – with Brazil likely a significant driver of this growth.
With such potential, the battle for supremacy for operators in these territories will be determined by an ever-changing dynamic. While the most successful gaming operators in the world are becoming more and more international in their approach, at the same time, we are seeing smaller, more agile operators with local expertise carve out a niche in key markets.
On the marketing side, delivering engaging, personalised communications in real-time will be critical. Make no mistake, while the region has huge growth potential, it will mature swiftly. Operators will be keen to build market share early, or otherwise require large marketing budgets to catch up.