Brazil has officially opened its doors to international gaming operators under new regulations set to become one of the most lucrative markets in the industry.
At the backbone of the payments aspect of the country’s gaming infrastructure is PIX, the peer-to-peer payment method that has become the predominant payment method, and it is essential for incoming operators to recognise this.
Sean Telford, Head of Operations at KTO Group, has felt this licence, regulatory and payment process first-hand. He spoke to Payment Expert before SBC Summit Rio (25-27 February) on the state-of-play of the Brazilian market in its first month and why the relationship between gaming operator and payment provider is vital for any company’s growth in the country.
Payment Expert: How important is it for operators to understand that payment trends are regional in Brazil. How might the payment needs of Rio de Janeiro natives differ from those who live in Curitiba or São Paulo?
Sean Telford: Payment trends can differ across the country, but we have definitely seen a slimming down in the amount of payment methods used since the introduction of PIX in November 2020.
This is not exclusive to online gambling, with PIX being used from everything to making donations, to buying petrol and everything in between. Whilst historically, cash and boleto were significantly more prominent in some states, we now see in Brazil that 75% of the population uses PIX, with 45 % payees identifying it as their most frequent payment method.
In December 2024, PIX became the most widely used payment method across the country. The regulation created limitations on the variety of payment methods available, however, most companies are unaffected due to the ubiquity of using PIX online.
PE: How will KTO’s partnership with Kambi look to streamline betting for a true best-in-class experience?
ST: KTO has a deep understanding of the Brazilian market and has always placed our customers at the center of everything we do. Our partnership with Kambi strengthens this commitment, enabling us to further enhance the sports betting experience for Brazilians with solutions tailored specifically to their needs and preferences.
One immediate highlight will be the improved Bet Builder, a tool that makes it easier and more intuitive for our users to create personalised bets that reflect their unique style. Additionally, our customers will benefit from a faster, more engaging live betting experience with seamless navigation and real-time updates.
By combining KTO’s local expertise with Kambi’s advanced technology, we are ensuring that our users get the best possible sportsbook experience – one that is distinctly Brazilian and designed with them in mind.
PE: How important is the relationship between a payments operator and gaming operator, particularly when it comes to a new betting market like Brazil?
ST: It’s exceptionally important, new market or not. The trust element of the relationship is huge. They trust us to follow our regulations and provide customers, and we trust them to abide by BACENs regulations and ensure payments are made in a timely manner to our users.
On the new market aspect, there was a condition pertaining to pre-registered bank accounts, which meant development and changes to APIs on both sides. The regulation, whilst fair, did increase the amount of friction users experience, introducing a more complex process in which customers need to register a payment method before using it. Only by working together with the payments operator, are we able to streamline and optimise our payments journeys.
PE: Will there be a strong focus from KTO on diversifying its offerings, whether that be odds, payments, etc., in order to consolidate its position in Brazil in the early stages?
ST: KTO will continue to focus on what it does best, providing a best-in-class product. We will be aiming to expand our payment offerings, there are some appealing products on the market that can definitely help us increase conversion and draw players in.
We have had success with our KTOHORA campaigns, which will continue, and we will further drive our expansion in Brazil. We were one of only 14 companies granted a definitive licence to operate before the regulation came into force on 1 January, which we’re immensely proud of, and it gives us an excellent spring board from which to work from.
PE: Once the Brazil betting market matures over 2025, do you anticipate any long-term changes to occur throughout the market that will shape it over the next several years?
ST: Of course, it’s still early doors, and predicting regulators is a difficult task. I do believe we’ll have a consolidation of the market to fewer and fewer brands within the first couple of years. Those who struggle to compete could potentially exit the space.
It’s an exceptionally competitive market. We’ve already seen it; we had 100+ companies apply for the licence, and 50% of them falling away or deciding not to commit to the market when 1 January arrived. There were also several brands that missed the deadline, and it’s still to be seen whether these brands will risk late entry. M&A has been strong over the last 12 months, and I don’t see this changing at any time in the near future.
PE: Lastly Sean, and thank you for your time, what are you looking forward to being discussed at SBC Summit Rio and what are some of the themes you believe are essential for Brazil’s newly regulated sports betting market to be discussed?
ST: With the summit being the first major LatAM (Brazil-focused) summit after regulation coming into force, I think it’s going to be an excellent conference. With the regulation being so fresh, it’s interesting to see what our competitors are doing, and how everyone’s interpretation of the regulation is slightly different on a product front.
Having worked within the Brazilian market for five years now, it’s always an opportunity to catch-up with friends within the industry. I’m particularly interested in the ‘from insta-fame to insta-compliance’ panel as we’ve seen a growing trend of influencer marketing in the market over the last couple of years, and I’m also looking forward to the ‘room for one more’ panel.
It’s interesting to see what other businesses are doing to carve out their niche and remember that a one-size-fits-all approach is bad for the market.
Looking to attend SBC Summit Rio? For groups of three or more, you can purchase the ‘Group Pass Ticket’ which gives you access to all three days of SBC Summit Rio for the discounted price of R$2500 per person.
Additionally, you can purchase our ‘Expo+ Pass’ for R$500. This pass grants you access to the conference and exhibition only.
You can attend the event free of charge with our ‘Expo Pass’. This pass gains you access to the exhibition and Influencer Academy workshops only.
Operators and affiliates can apply for complimentary passes.
