iGaming Daily

Fernando Noodt (00:02.243)
2025 is here and so is the new Brazilian iGaming and sports betting market, but the trail continues to be rough, as Lotergi, the regulator of Rio de Janeiro, remains in dispute with the federal government. They've got problems, and they will try to solve them, but maybe, like Taylor Swift, they've got bad blood. Welcome to iGaming Daily, I am Fernando Nott, senior business journalist for SBC Noticias and your host for today's episode.

discuss the latest about the country. I'd like to give a warm welcome to relationships manager Brazil Isadora Marcanti. Issa, how are you today?

Isadora (00:42.254)
I'm really happy and excited for this year. It's just like our, what we were saying last year, like we didn't see, we didn't see. Right now we're like actually seeing things happening. Obviously we still have to, we didn't see some other stuff, but I'm really happy to be here and to be joining the podcast once again.

Fernando Noodt (01:03.383)
Yeah, we are waiting and seeing but also seeing at the same time. So not too bad at all. But also to discuss all of this is SBC News Brasil editor Ricardo Diasis. Ricardo, how are you today?

Ricardo Assis (01:17.102)
Hello Fernando, first of all, happy new year for everybody and I'm very happy to be here again to discuss a major point here in the industry in Brazil. So let's go for it.

Fernando Noodt (01:20.387)
Happy New Year.

Isadora (01:22.894)
Happy New Year!

Fernando Noodt (01:32.727)
Yeah, let's go for it like we went after those holiday leftovers. Did you guys finish yours already? just, just yesterday finished my leftovers from New Year's parties. Did you guys had any leftovers from their dinners and suppers and everything?

Isadora (01:49.622)
Mine last only a day after Christmas and New Year's. Yeah, so I love Christmas food and New Year's food, so it's just, they don't last long here at my house.

Fernando Noodt (01:51.627)
All day.

Fernando Noodt (01:58.613)
That's great. That's great.

Ricardo Assis (01:59.02)
Yeah, here we had a lot because we are on the beach and here in Brazil the beach that I was on had an outbreak of virus and everybody got sick and so a lot of food came back to the house so we did a barbecue yesterday.

Fernando Noodt (02:16.235)
Nice. It's a-

Isadora (02:19.607)
Hahaha!

Fernando Noodt (02:21.347)
Yeah, I don't know if I should say too bad or so good, but let's just get out of here by thanking our sponsor OptiMove, the number one CRM marketing solution for the iGaming market and sponsor of iGaming Daily. As a special offer, OptiMove are offering new clients a free first month when they buy OptiMove. For more information and claim the free month, go to OptiMove.com slash SBC and we will leave the links down

Isadora (02:25.603)
Hahaha!

Fernando Noodt (02:48.949)
in the podcast episode description so you can find that more easily. But we were speaking about Brazil, we were speaking about the new market and the new problems this new market is bringing with them. there are not so much new problems, but we have already discussed this for some time already because companies licensed by the Secretariat for Prices and Betting have

of course, joyfully started operating this January 1st. But those licensed by Loterchi, by the regulator of gaming embedding in the state of Rio de Janeiro, are now in the spotlight. So Ricardo, why don't you break down for our listeners what happened over the last few days?

Ricardo Assis (03:36.004)
So, in the last day of the year, the Secretariat of Price Embedding has released the sole-weighted list. So now we have 66 companies that are legal to operate in Brazil. 14 of them have the definitive license and 52, right? 52 have the provisional license because they have to...

send some documents and finalize the procedures. But from now we have 66 legal companies, but it's a low number because we had like 106, if I'm not wrong, companies that were operating under the provisional license. so 40 that were not approved. In the middle of these 40, we have some big names like Sports da Sorte, PIXBatch.

that are the sponsors of Flamengo and Corinthians that were relying on the Loterge license that now has been revoked by André Maigonza, the minister of the Supreme Court. And this is going to be judged the full scenario... Sorry, I will start again. And this is going to be judged by the Supreme Court in the beginning of the next month. It's going in the middle...

And this is going to be judged by the Supreme Court in the middle of the next month. So it's going to be really swiftly. It's going to be really, they are going to go right for it. So we are supposed to get a decision really quickly. And Lotej has already recorded and we have to wait and see what's going to happen next. But I think we're going to have a decision really quickly because it's something that...

the union really wants to end now because it's something that is going to hurt them.

Fernando Noodt (05:35.383)
Cool, so of course we're waiting and seeing for what happens, but if you want to see what happens, be sure to subscribe to SBC Noticias Brasil newsletter, where all this information will be available as soon as things start happening. Of course, you can read all about what we are talking about in this podcast and what we are about to continue to discuss on SBC Noticias Brasil, as well as SBC Noticias in Spanish.

So make sure you subscribe to both newsletters. But Ricardo, you were saying the Supreme Court moved very, very swiftly to advance with this issue, with this matter. So Isa, how did the industry react to this very swift movement by the Supreme Court?

Isadora (06:25.486)
Obviously the operators that got the federal license are quite happy with this because especially like when you have to pay 30 million BRL and a DGR of 12 % and some other companies are paying a paid five million BRL for a license and are paying 5 % of DGR, the companies that pay more obviously are happier and engaged with the situation.

But some other people, especially lawyers, are quite surprised with this move from the Supreme Court. It was really fast. I remember that during our SPC Digital Day, a Brazil Digital event, we were discussing how long it will take for the Supreme Court to judge the situation and to give the final word.

And we were predicting like 2026, maybe because 2025, wouldn't see like a very big, like big major changes in that scenario. And actually what's happening is like the opposite, we just got the first decision and then they will give the final, the final word in mid February. So obviously the Lotteria's licensees are not very happy with that because the law said that they could do what they're doing actually like.

The law 13756 from 2018 allowed the state lotteries to offer sports betting in their territories, yes, but this would be, this was also going to be done only after the provisional measure and lotteries license, lotteries procedures and rules were set before the provisional measure. So actually, lotteries is not doing anything wrong. They're just following the law.

We understand that and everybody in the industry understand that this is a clash and there is a clash between like the federal government and the state government. This cannot happen. But it's really weird what's going on in the industry. It's like I said in the previous podcast that I took part in, it's really 50-50. Some people are saying, yeah, that's correct. Obviously, like the federal government should prevail over the state government and the state rules.

Isadora (08:45.484)
But other people are saying that, this is not right what's being done because Lotez is just following the rules that were previously set for this market.

Ricardo Assis (08:56.77)
Yeah, it's a matter of a moral versus morality and legality because the legality is on the side of loterge but the morality is on the side of the union because the loterge is doing the thing about the gel blocking, right? They're not offering the gel blocking that was something that was an infralegal measurement that was done after the loterge bid. So they could...

do that, but in the moral sense I understand why the Yunnan is so pissed about.

Isadora (09:32.802)
Exactly.

Fernando Noodt (09:33.155)
Yeah, and of course, geo blocking, geo localization tools are often a problem for many Latin American jurisdictions. For example, in Argentina, where the gaming industry and the online gaming industry is regulated by each province, like there's no federal regulation. There are some issues regarding geo localization where I think this tool is...

having some errors and so people in close to the border of a province can experience some issues by trying to access a license operator in their province. For example, let's say the city of Buenos Aires, if you live close to the border to the province of Buenos Aires, you might have issues accessing license websites by the lottery of the city of Buenos Aires. So it's definitely an issue to

to pay attention to the geolocalization. And of course, given it's an infralegal rule in Brazil, it's of course more and more delicate and intricate to consider. And that's why Luterte is saying, okay, we are just taking people's statements for granted. That's our measure to control. are not...

betting on websites authorized outside Rio, right? So, but how does this affect marketing? Let's say, for example, international operators are looking to enter Brazil. They want to take part of what's said to become the third largest market in gaming in the entire world. So how do they factor this in their marketing plans? Should they remain confident in their federal licenses or what should they do Ricardo?

Ricardo Assis (11:29.828)
I think in the federal license, they should remain pretty confident because there is not going to be major changes in it. At least we expect that. We hope, but even the EJBR, that's a major association here in Brazil that has a lot of big names of the industry here, like Batson, Batson and Bat365 and other big players.

Isadora (11:38.626)
We hope that.

Ricardo Assis (11:58.958)
They have issued a statement giving props for the STF for going after the lotteries license. So I don't think that's going to a lot in the international operators that have already applied for a license and already operating here.

Isadora (12:20.116)
I think the main problem is for the state licensed operators by Loterge because what would happen, what will happen with them if, and we know that this is what's most probably going to happen, but when the Supreme Court decides in favor of the federal government, will they lose all the money that they paid already to Loterge, how Loterge will be affected by that economically speaking.

Fernando Noodt (12:20.355)
And of course, yes.

Isadora (12:45.794)
how the Rio de Janeiro state will be affected economically speaking as well. So I think the concern is more for those operators that got licensed by Loterge or are in process of getting licensed, especially the ones that are already paid for the license fee. And yeah, it's going to be interesting to see what's going to happen.

Fernando Noodt (13:08.097)
And of course, with the market being just regulated, of course, it has been regulated for some months already, but now the full regulation is coming into force. How does this make the Brazilian market look,

Isadora (13:24.558)
Personally, I would say it makes us look like a joke, honestly, because we change the rules over the months all the time. So we have the previous law from 2018 that Michelle Timber signed, and then we had the regulation in 2023 signed by Lula. And then we have the law ordinances that came after that are these infralegal laws that Ricardo mentioned. And then we have the lotters.

Voltaire's problem and then we have Voltaire's licensees added to the list of the provisional license, but then right now they're not added to this provisional license. Then before you could actually promote bonuses and right now you cannot promote bonuses anymore. So it's just like, it shows to the world that we don't know what we are doing and we are learning as we do instead of like having a board of people.

I would say, and I'm sorry for this, we're like competent people regulating a such important market and a market that requires a lot of responsibility because it is a market that we know that has its own problems. it's for people like internally, some people are really happy and confident with the federal government. Some other people are like, what are we doing here?

Do we know what we're doing? Like our government is showing that they can actually do what they are saying that they are doing with all these changes and problems that we are facing in the meantime. So it's starts the 2025 with the regulation enforced by the federal government with already with this clash between Boteish and the federal government is already a very big problem, I would say, from what I've been seeing and talking to other people.

Ricardo Assis (15:16.204)
Yeah, and I think the problem is the timing, because if they'd it before the license, before the regulation go live, it would be better, and if they did it like after a year or after a year and a half, we would have some time to prepare. But they're doing it after two or three days after the regulation go live, it's a terrible timing, it's a terrible message for everybody that's involved in it.

Isadora (15:39.266)
And it's something that we discussed as well, like during the SPC Brazil Digital event, it's just like we had six years of like lack of regulation and people now had like six months to adjust and adapt to all these new rules and the rules that were coming out in the middle of the process. Like we had like a law ordinance published like, don't know, like two months ago, three months ago, like right just before the...

Ricardo Assis (16:03.49)
No, we have law ordinances published in December. We have law... Yeah?

Isadora (16:06.774)
In December, exactly, we had one. That's true. So it's just like, it's really complicated. It's really complicated. It's not a good message at all.

Fernando Noodt (16:15.329)
And speaking of complications, what impact will the decision of the Supreme Court have on sports betting sponsorships in Brazil? I know there's some that are directly affected by this ruling.

Ricardo Assis (16:29.344)
Yeah, in Brazil, are the two biggest teams in Brazil in terms of supporters are Flamengo and Corinthians, and they are both sponsored by brands that are not... Let's start again. Yeah, there are the two major... The two biggest teams in Brazil in terms of... Sorry, there's a message here.

Sorry, I'll start again. The two biggest teams here in Brazil in regards of supporters, in the numbers of supporters, are Flamengo and Corinthians, and they are both sponsored by brands that did not receive the federal license, Sports Dassault and Picsbet. And they were relying on the Lotteria's license, and the Lotteria's license was being recognized by CBF, by the Confederation of Football here in Brazil.

Fernando Noodt (16:58.957)
don't worry about it.

Ricardo Assis (17:28.606)
and by now it's still valid by the confederation because they don't have to do anything until we have a final word by the STF but we have to wait and see what's going to happen because if the Supreme Court does what we expect they are going to do and revoke this national license from Lotege that they offer

it's going to be a major impact in this in these two teams because they their sponsorship is going to be only going to be able to do in the state of the Rio de Janeiro. So maybe it's going to be maybe the company will rip the contract. I don't know. We have to wait and see because it's it's it's major. It's a it's a lot of money involved. Corinthians received I think it's around 110 million and Flamengo it's 105 million or something.

that numbers. It's a lot of money to just be able to sponsor in one state of the country.

Fernando Noodt (18:29.385)
It looks like Corinthians doesn't have much luck with their sponsors lately, but hopefully they can solve this soon enough as well as of course the Loterge and federal government. Hopefully they can sort this whole issue as swift as it has begun in this 2025. But let's go back to what is next for the case after Loterge appealed last week and what's the timeline we can expect for the case. What's next now?

Isadora (18:33.902)
No.

Isadora (18:59.81)
Well, like Ricardo mentioned before, the plenary of the Supreme Court will vote on this matter in between the 14th of February and 21st of February, something like that. That's the prediction. So we might have a final solution on that date. But like I said before, what concerns me the most and concerns the industry is not only the decision, but what's going to happen to these operators after that?

How will they gonna be just like that? Like, okay, you cannot operate outside the Rio territories anymore. You cannot, let's say, sponsor Corinthians anymore. You cannot sponsor, I don't know, San Paulo, because you're licensing Rio and not in the federal government. What's going to happen with these operators and all the money invested in that these operators actually trust on the law that they said they could?

do what they were doing. obviously, like, Luterte appealed to the decision. We have to hashtag wait and see. But it's really, I would say, it's a cloudy. It's really cloudy, what's happening. Yeah.

Fernando Noodt (20:22.307)
Okay, if you want to stay tuned to what's going to happen, whether it's cloudy, rainy, or if the sun eventually comes out for Brazil, for Luters, for the Union, and for everyone involved, be sure to subscribe to SBC Noticias Brasil newsletter, of course, as well as every other SBC media newsletter, because we all cover this major, major news. So be sure to stay up to date with this information and more. Subscribing to all SBC media newsletters and specifically.

the SBC Noticias Brasil newsletter. But that has been all for today's episode of iGaming Daily. Thank you very much, Ricardo, Isa. Thank you very much, James Ross, for producing this episode. To all our listeners out there, Happy New Year and we'll catch you in the next one.