Entering the LatAm market is a tricky path to navigate for operators despite its hidden gem status. The region’s territories are still at different stages of regulation in their gambling lifespan. Whilst the sector in Argentina has been regulated for a number of years, the likes of Colombia and Peru are still relative newcomers, with Brazil regulating sports betting only.
Enter Playtech’s Report: The big five in LatAm
Covering 21 different countries and territories, Playtech’s Responsible Gambling Report focuses on five of the six biggest markets by population in a region that’s home to more than 680 million people. Playtech’s team of regional commercial, regulatory and safer gambling experts, Francesco Rodano, chief policy officer, Charmaine Hogan, head of regulatory affairs and Pedro Extremera, regional director, believe this report can act as a blueprint for operators looking to break into the space.
Gambling in Latin America: taking the market by storm
The LatAm market has long been considered the next big thing in igaming with online gambling now legal in varying forms in most of the region’s countries. Despite widespread growth, however, there’s still a confusing mix of regulations from country to country, and in the case of Argentina, from state to state.
LatAm is seen as an area with a huge potential for growth for several reasons. With a huge population, a smartphone adoption rate of 73%, and a fierce passion for sports, it’s easy to see why it’s a ready-made haven for operators.
Take the region’s long-lasting love affair with football as an example. Brazil and eventual winners Argentina were both at the head of the betting when it came to ante-post markets for the 2022 World Cup held in Qatar. Their passion for the sport is also evident in betting – a reported 67% of bets placed in LatAm are on football.
As with any growing market in the gambling industry, the challenge to keep players safe is always at the forefront of operators’ strategy. Playtech’s report highlights the need for operators to not only educate players on what responsible gambling looks like, but also the player protection tools available to them. Fines or even losing their licence are two potential penalties should operators fail to provide proof of responsible gambling practices, seen before in Europe with regulators wielding multimillion dollar fines for social responsibility and AML breaches.
Covid-19 pandemic: A spike in harmful gambling
Identifying trends in player behaviour is imperative to understanding how to tackle potentially harmful behaviours. Problem gambling increased across LatAm during the Covid-19 pandemic, which could be due to a number of factors such as more time spent at home and online and there being fewer opportunities to socialise. In Chile alone one study estimated the number of problem gamblers had risen from 2.2% to 8.3% when comparing numbers in 2018 to 2022. So how can operators bring this spike down?
Diversity in gambling behaviours across LatAm
Despite the similarities when it comes to gambling preferences, the Playtech Responsible Gambling Report shows clear differences in patterns of gambling from players in the five different countries across LatAm. For example, when asked if they’d gambled online in the last six months, 53% of respondents in Argentina said they had. This is the lowest figure from all five countries; Brazil was next lowest with 60%, followed by Chile (68%), Colombia (75%) and Peru (82%). It’s data like this that makes the report such a valuable tool, explains Rodano.
“The Responsible Gambling Report’s findings offer valuable insights that can help industry bodies and operators design and strengthen its responsible gambling and customer experience strategies throughout LatAm,” he says. “The insights also provide a country-by-country view of perceptions in each market, which can prove to be vital when operators are trying to penetrate the region as a whole.”
Identifying gambling experiences in LatAm
The report shows that player experiences and the repercussions of these experiences differ from country to country. For example, 52% of respondents from Brazil said they’d received a warning about how much money they were gambling; in Argentina only 16% had experienced the same. Cultural nuances play a role in both the patterns of gambling and the perceptions of what responsible gambling means – so much so that 60% of respondents in Brazil would class gambling on legal websites as responsible gambling, whereas only 29% in Argentina think the same.
These contrasts in opinion between residents could be due to the two countries’ differing approaches to gambling: Argentina has a long history of regulated, legal gambling whereas Brazil has only recently regulated online sports betting.
“These differences highlight that gambling companies should not take a standardised, one-size-fits-all responsible gambling approach across Latin America,” Extremera explains.
“Operators can utilise country and consumer segment data to shape highly customised responsible gambling programmes, marketing approaches, and product offerings that align with each jurisdiction’s distinct needs and behaviours.”
The diversity of market behaviours was one of the most interesting findings of the Responsible Gambling Report.
“The wide variation in perceptions and behaviours among the five countries was an interesting insight,” Extremera continues. “This can be primarily explained by the fact that each country is in a different stage of regulatory maturity.
“It should also be noted that Latin America is far from being a homogenous region, with many differences in culture, history, economics and politics. This is also reflected in the variety of perceptions captured in the answers, like the ones above, recorded in the report.”
Identifying harmful behaviours online
The report highlights the need for more stringent regulations as well as a commitment from operators to prioritise player protection. For operators, there are lessons that can be learnt from other countries that have tried and tested methods for putting responsible gambling at the forefront of the industry. Take the UK as an example with the release of the anticipated Gambling White Paper this year. The proposed changes that are currently in consultation highlighted the need for mandatory data sharing by operators for high-risk customers, and maximum stakes for 18-24 year olds when betting on online slots.
With these key learnings as well as the findings in the Playtech report, Hogan feels that operators have some clear guidance for when they enter the Brazilian market as well as the wider LatAm market.
“As the market matures in Brazil and other Latin American markets, we believe that regulation can play an important role in setting a consistent framework for protecting players under local regulation.
“At the same time, operators are responsible, especially in the newly regulated markets, for going above and beyond minimum regulatory requirements and continuously improving ways to advance player protection”
Brazil: A challenging market for igaming operators?
With the arrival of a new era of gaming and the forecasted growth for gambling in the country, Brazil has the potential to be one of the most lucrative opportunities for operators.
Penetrating this new market comes with its own challenges, however, especially since the report shows that respondents from Brazil had received the highest number of gambling warnings. Interestingly, only 13% considered that not spending money they can’t afford to lose on betting is linked to responsible gambling compared to 53% in Argentina and Colombia, 50% in Peru and 56% in Chile.
Another key indicator that highlights the need for operators to opt for an enhanced responsible gambling strategy is the “time spent gambling” figures in the report. Only one in three (32%) of Brazilian respondents claimed to play for a limited amount of time each day. The figure is higher in all four other countries with Peru the highest at 56%, followed by Colombia (51%), Chile (50%) and in Argentina (41%).
These results showcase the need for operators to have responsible gambling strategies in place, like trigger-led behavioural warning messages, or imposed deposit limits, before entering the market. But operators aren’t the only ones that have a huge part to play in helping to tackle this problem, regulation is key to educating players on harmful gambling, similar to how this has been handled in Europe.
Responsible gambling: Utilising preventative measures
4% of respondents across LatAm think their gambling habit is becoming a problem, while 1% in each of the five countries are certain that gambling is harming them, figures that are bound to be a cause for concern.
Rodano explains how operators can combat this challenge. “Operators can leverage advanced data analytics and technology solutions to effectively identify at-risk players across Latin America,” he says.
“For example, behavioural analytics tools can be specifically trained to recognise and flag patterns and signs of problematic behaviour, not just in every single country but also for each operator active in that country.”
Player protection messages
One in three respondents across LatAm say they have received a warning about their level of gambling activity, with the biggest percentage residing in Brazil.
The warnings come varying forms, depending on how the recipients wish to receive them. According to the Playtech report, the most popular way is through pop-up messages with 38% of respondents choosing to receive them via an on-screen message. E-mail and text are also chosen over screen freezes or phone calls suggesting players want a less intrusive form of message.
Despite the many forms of messaging, only 8% of respondents say that receiving a warning made them stop playing immediately, though a further 31% claimed they paused or reduced their gambling as a result of being contacted. With 26% of LatAm respondents still suggesting the warnings did not encourage them to change their approach, operators need to think about further measures they should take to enforce responsible gambling.
Rodano explains, “One of the benefits of marrying both analytics and messaging is that operators can utilise the insights from analytics to understand what is driving risk for individual players and then tailor the messaging to the level of risk.
“Personalised messages and nudging are much more likely to be adopted and relevant as compared to generic messaging, and thus are more effective in positively shaping player decisions about gambling.”
Technology in igaming: A key role to play
Technology in the gambling industry is continuously developing to help with safer gambling requirements, and Playtech’s report highlights how important these products are to identify dangerous player patterns.
Timeouts or cooling-off periods, self-exclusions and deposit limits are just some of the options available to players. However, despite the tools at their disposal, uptake is relatively low across the industry, reinforcing the need for operators to identify these players and engage with them, as Rodano explains.
“Technology and data analytics can be helpful to assess risk factors in a large population. Additionally, ongoing behavioural tracking, paired with analytics, can detect emerging problems and risky trajectories. This can help operators meaningfully and effectively interact with the affected players before they escalate out of control.”
Playtech and BetBuddy
Playtech believes that technology is the key to helping identify these trends and recognises the importance of investing in protection technologies, specifically its BetBuddy platform.
“Our BetBuddy platform utilises advanced player analytics and machine learning to identify at-risk patterns,” says Rodano. “Our offering can help inform early, personalised interventions and can accurately detect risky trajectories based on a wide range of behavioural characteristics.
“What is unique about BetBuddy is that it offers explanations about individual risk factors that are driving the player assessment. This enables operators to respond with tailored interactions, supporting the protection of players.”
Government involvement in safer gambling
While technology can definitely help the industry to enforce responsible gambling behaviours among players, there’s also the question of regulation and more government involvement. So much so that 36% of respondents across the five countries believe their government should do more when it comes to reducing the potential risks related to gambling. This was highest in Colombia where 40% of respondents felt that way, with 41% saying the government needs to not only do more but be much better.
Only a small proportion (10%) across the region feel their government is doing enough to reduce the potential risks of harmful gambling, something that presents a clear challenge for officials and governing bodies alike. Instilling confidence in players and ensuring they feel safe online will improve the player experience, benefiting both players and operators, and is something Playtech feels very strongly about. It’s intent on helping policymakers, trade bodies and operators develop tailored market strategies that foster responsible growth across Latin America, Hogan explains.
“Each country is different, so a customised approach will play an important role in addressing country and consumer segment-specific characteristics while leveraging the opportunities through sustainable business practices.
“While respecting regional differences and catering to them, the industry should ensure it adopts a sustainable and long-term view that balances profitability with the importance of safety, consumer protection and responsible gambling.”
The future of responsible gambling in LatAm
The report shows how the industry is continuing to grow at a rapid rate. Almost 70% of respondents placed bets in a six-month period, up from 53% in the previous report. With such a spotlight on know your customer (KYC) in other areas of the world such as Europe, it won’t be long before this will be needed for Latin America’s players.
As more countries in the region become regulated, scrutiny of and interest in how the industry is safeguarding players will certainly be in the spotlight. The Responsible Gambling Report offers useful insights to help operators understand the current and emerging issues and risks and opportunities as as they consider how to successfully enter and compete in Latin America.