Brazil: Is esports the key to the country? – Esports

Brazil’s efforts to regulate sports betting have drawn significant attention, particularly with the inclusion of esports betting in recent legislation. This burgeoning sector promises to be a pivotal component of the country’s gaming landscape. Marese O’Hagan speaks with Oskar Fröberg, founder and CEO of esports operator Abios, about the reception of esports betting in Brazil and the potential impact of its legalization.

The discourse surrounding sports betting in Brazil has intensified, especially since the introduction of Provisional Measure 846/10 in December 2018. This measure initiated a two-year window for the government to formulate comprehensive sports betting regulations, which has since been extended for an additional two years.

As we conclude 2022, the anticipation surrounding these regulations is palpable. With published guidelines earlier this year, operators are increasingly looking toward Brazil’s passion for sports like football. However, the Brazilian esports market is another area ripe with potential.

Fröberg highlights Brazil’s vibrant esports scene as a focal point for Abios since its establishment nearly a decade ago. He explains the country’s rich esports heritage, underscored by its robust League of Legends communities.

“Brazil came onto my radar in terms of esports when we launched Abios almost 10 years ago,” Fröberg recounts. “In 2013, Brazil was already a significant player in the League of Legends community, with active and engaging discussions across various platforms, particularly on Facebook.”

“From my understanding, the intent is to legalize sports betting and esports betting by the end of 2022. We closely monitor these developments, as we provide odds products across multiple licensed regions,” he adds.

Fröberg posits that Brazil’s strong sporting culture naturally translates into a keen interest in sports-themed gaming, such as FIFA.

“In South America, we see immense popularity for FIFA and esports. Brazil, being a nation deeply rooted in soccer, is highly likely to embrace FIFA and esports concepts,” he affirms.

“The Brazilian populace is incredibly passionate about sports and is evidently drawn to esports as well.”

Navigating Regulatory Landscapes

Esports will be integrated into Brazil’s upcoming sports betting regulations, which include critical aspects announced in May—the most significant being the BRL22.2 million (£3.6 million/€4.2 million/$4.4 million) licensing fee.

Fröberg notes a crucial regulatory stipulation: operators must establish a local subsidiary to offer legal betting, which could reshape the competitive landscape.

“The requirement for operators to have a Brazilian subsidiary will increase operational costs, potentially dampening competition,” Fröberg explains. “While this could benefit established esports operators, it may pose challenges for newcomers in the market.”

Despite the uncertainties surrounding regulations, Fröberg asserts that Brazil’s esports ecosystem is vibrant and ready for expansion. For traditional sportsbooks, however, leveraging this growing interest in esports could be challenging.

Nonetheless, Fröberg expresses confidence in the existing demand for esports betting, indicating that the focus should be on converting esports enthusiasts into bettors. “In regions where esports thrives, betting has emerged as a natural extension. Take the CS:GO community, for example—skin trading has been prevalent, even in its regulatory gray areas,” he elaborates.

“Viewers of competitive esports events are inclined to place bets, enhancing their overall experience.”

Yet, potential marketing restrictions remain a concern. Drawing parallels with the Netherlands’ recent re-regulation, Fröberg highlights the need for operators to navigate strict advertising guidelines carefully post-launch.

“Marketing regulations differ significantly across jurisdictions,” Fröberg points out. “For instance, the recent Dutch re-regulation imposed rigorous advertising limitations, and we must remain vigilant in avoiding similar backlash in Brazil.”

Focusing on Latin America

While Brazil stands out as a critical market, Fröberg maintains that the broader Latin American region holds immense potential.

Fröberg views Latin America as a dynamic investment landscape, bolstered by numerous operators eager to establish a foothold in this emerging sector. “Given its substantial population and a growing economy, particularly with increasing disposable incomes, Brazil is poised to be a leading hub for growth in both esports and traditional sports,” he asserts.

“This optimism is evident, as numerous global companies are heavily investing in Brazil and the Latin American market overall, reflecting a belief in its positive trajectory.”

Brazil occupies a unique position within the betting framework, characterized by enthusiastic audiences and robust interest from operators eager to capitalize on emerging trends. This dynamic environment could serve as an essential testing ground for esports-led strategies, setting the stage for a transformative era in the gambling industry.