Published: 7 December, 2023

Boom time in Brazil

As the regulation of Latin America’s largest country edges towards reality, operators are vying for market position. This presents opportunities for affiliates, says 20Shots CEO and Co-Founder Jacob Kalms

 Over the past few years, interest in Brazil as a gaming market has intensified, even if progress from the sports betting law passed in 2018 has been slow until quite recently.
 Now that regulation of the market looks to be closer, multiple operators from around the world are trying to establish their brands in the country so that they are well-positioned in advance of a licensing regime coming into place. With everyone looking for a piece of the pie, Brazil has become a very competitive market.
 To me, this is unsurprising because Brazil has the potential to be a huge market and regulation will make it a stable and lucrative one for operators. This is especially true now the tax rate has been dropped to 12%.
 At 20Shots we have been interested in the Brazilian market for some time and in May we launched our first partnership in the country with operator PixBet. Since then, In2Bet, Samba Bet and BLZ Bet have all added our Fantasy5 game to their sites in a bid to attract and retain new players.
 As a free-to-play fantasy provider we follow a slightly different model to other affiliates, but we still compete with more traditional affiliates across our other markets and we expect this to be the same in Brazil. So far, however, we’ve yet to see the same level of competition among affiliates that we have seen among operators.

Brand play

 This means there is still a huge opportunity for affiliates of all types. This is because with operators trying to gain brand awareness in the country, they are looking to pick up traffic any way they can.
 Affiliates with an eye on Brazil need to do their research, however, as the market is currently geared more towards awareness than other jurisdictions. With the impending introduction of a licensing framework and new operators entering the market, there is a real focus on brand building, meaning there is currently less prominence placed on CRM and sign-up offers. However, as things progress, we expect the emphasis will move away from brand to CRM and player retention.
 In any case, conversion rates are already high and improving all the time. While in the UK our average player conversion rate from our free-to-play games might typically be 12-13%, in Brazil we’ve averaged 15% and last month even reached 18%.
 One thing we’ve noticed is that Brazilian players tend to be less price sensitive. In the UK, many operators might only expect to make around 10% from deposits, whereas in Brazil we are sometimes seeing percentages as high as 40-50%. One theory is that because it is new to many of them, players seem to value the entertainment element of betting more than the pursuit of financial return.
 One advantage we have as a fantasy games provider is that as is the case in the US, fantasy football has been popular for quite some time in Brazil, with games such as Cartola and Rei do Pitaco generally being well-known and understood among the general public.

Social strength

 One challenge for us has been continuing with the same focus on influencer marketing we have in other territories, as in this area we’ve faced intense competition from operators in Brazil.
 This is probably because in Brazil, player value seems to be highest when players come from socials, whereas in the UK Google Ads typically produces higher-value players.
 Gambling companies are therefore using influencers extensively in their marketing as they see them as having a strong sway with the general public. Moreover, compared with the UK for example, the influencer marketplace works very differently. Whereas in the UK influencers typically work with multiple partners, in Brazil influencers tend to get tied up to long-term, exclusive contracts with one party. We have therefore seen massive rises in pricing even among influencers who aren’t necessarily focused on sports betting.
 As is usually the case, moving into a new market presents both challenges and opportunities for affiliates, but for us, the opportunities outweigh the challenges.

Jacob Kalms is CEO and Co-Founder of 20Shots, a Gambling Commission-licensed company. Its main product is Fantasy5, a free-to-play fantasy football game that allows customers to win weekly jackpots and prizes. 20Shots has B2B partnerships with leading operators in the UK, Ireland and Brazil.