Brazil’s Budding Sports Betting Market: A Race to the Top
After years of delays, Brazil officially launched its legal sports betting sector on January 1st, and operators are eager to tap into what is projected to become one of the world’s top three markets. For companies that have already secured licensing approval, this first-mover advantage presents a significant opportunity.
The legal betting market in Brazil debuted with 14 companies initially receiving full licenses, alongside 52 operators granted provisional authorization.
Provisional licenses were issued to companies facing setbacks with their applications, such as certification delays. Extensive certification requirements, coupled with a high volume of applications submitted to the Secretariat of Prizes and Betting (SPA), have led to delays for the certifiers responsible for conducting evaluations.
These provisional licenses allow recipient companies to remain active for an initial 30-day period, with a possible 30-day extension if operators receive support from certifying entities, clarifying that more time is needed for complete certification.
Stake was among the companies to receive a provisional license. The company, primarily a cryptocurrency operator, is eyeing regulated markets like Brazil as its next strategic move. Stake has also recently expanded into neighboring Latin American nations, Colombia and Peru.
Stake appointed Thomas Carvalhaes as its country manager in Brazil in November 2024 to spearhead its market entry. While the operator is currently only provisionally authorized, Carvalhaes anticipates securing a full license in the near future.
“Regarding the provisional license, we are working on a few documents, mainly related to certifications,” Carvalhaes stated.
“It’s literally a matter of time. I am confident that in less than a month, if not before the end of this month, we will have the final license confirmed.”
How Will the First-Mover Advantage Manifest in Brazil?
As a sports-loving nation with a population exceeding 200 million, the legalization of online betting in Brazil is sure to attract numerous international operators interested in establishing a presence.
However, this interest is accompanied by competition, making it even more crucial for operators to formalize their activities and tailor their offerings to the Brazilian population.
Being at the forefront is crucial, and operators like Stake and Carvalhaes are aware of the need to capitalize on their position.
“I think it’s really important because the market has changed a lot,” Carvalhaes continues. “We are talking about a gigantic market. It is for a reason, of course, that all the big operators are here pushing so hard.”
“I think getting ahead, when it comes to acquiring a license, and receiving permission to continue operating here is a great competitive advantage.”
Credibility Approval for KTO
KTO, on the other hand, was one of the 14 companies to receive a full license on January 1st, allowing it to launch alongside brands like BetMGM and Rei do Pitaco.
For a company with plans to achieve a 10% share of the Brazilian market, obtaining full license approval demonstrates KTO’s commitment, according to the company’s founder and CEO, Andreas Bardun.
“It’s like a stamp of approval for how disciplined we are as an organization,” Bardun says about obtaining one of the first licenses. “I think it brings confidence to the customer base as well, seeing that KTO is a very serious company that is at the forefront. Because internally we have this goal of being the leading brand in Brazil, that is, showing a better way of doing things. And I think we convey that message.”
“We have always said that we entered Brazil with long-term goals. Everyone knows for sure that KTO is here to stay and be very important for the future of the Brazilian iGaming market.”
Licensing in Brazil: A Learning Process
Brazil’s path to gambling legalization has been far from simple. Five years passed between the National Congress’s initial approval of online betting legislation in November 2018 and the Chamber of Deputies’ final approval of regulations in December 2023.
Even the licensing process has been challenging for operators. Bardun highlights issues regarding communication with the SPA and the gambling application portal, although he expresses sympathy for the regulatory body, which he says is still organizing itself.
“Actually, it was very stressful, and there are many reasons for that,” Bardun says about the application process. “This was also new for the regulatory body, so it kind of needed to adapt. Every time we thought we were ready and had done everything [necessary], they asked for more documents or new requirements at the last minute, making us scramble.”
“It was very stressful, I would say. It wasn’t the most organized licensing process. But I understand a little, because it’s something completely new for the Brazilian government. And, to be fair, they worked throughout Christmas and New Year to help operators.”
Faith in the Regulation
Carvalhaes also sympathizes with the regulatory body, which he says drew inspiration from more mature markets, such as the UK, to combine the best regulatory practices from around the world.
“Look, I think it was a [process of] mutual learning,” Carvalhaes adds. “Of course, regulations or licensing processes are not developed perfectly from the start. There hasn’t been a single jurisdiction with a perfectly functioning and well-established process from day zero.”
“I think that, for governments, we must remember that these guys are not gambling experts, we are. Therefore, it is very important that operators and associations use common sense and find opportunities to exchange information and educate the government.”
“I can say that I believe that Brazil has a great, decent, fair, and regulated market, both for operators and for users,” he insists.
Big Plans for KTO
With KTO fully licensed and Stake on the right track, the companies’ attention can now turn to their pursuit of success in the lucrative Brazilian market.
Betano has garnered attention with its sponsorship-prioritizing approach in Brazil, while the presence of other international giants, such as Bet365, will further increase market competitiveness.
Bardun is not bothered by the size of KTO’s competitors and is confident that the company will take the top spot.
“I have always believed that KTO will be a major competitor in Brazil,” Bardun declares. “I want KTO to be among the top three brands. That’s where we need to be.”
Stake and the Pursuit of Excellence
Stake is also targeting a large slice of the market pie. And Carvalhaes believes that a strong start is necessary for the operator to achieve its goals.
“In terms of market share, this year we are moving forward and want to position ourselves at least in the top 10,” Carvalhaes says. “I think we have what it takes in terms of product, knowledge, people, and experience to be in the top five.”
“In five years in Brazil, if things continue the way they are going, if we continue to make the right choices when it comes to sponsorships, ambassadors, responsible gaming, and continue to comply with the regulatory body, I think we have what it takes to be the leading gambling and sports betting operator in Brazil. I feel very confident in saying that. Let’s be as ambitious as that,” he concludes.
Perhaps the most talked-about story in gambling, the launch of the legal market in Brazil, is certainly on the minds of many operators, who are striving to be part of the sector. Bardun believes that “the race has begun,” and for early licensees, like Stake and KTO, they are looking to get ahead and set the standard for others to follow in what is sure to be a fiercely competitive market.
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