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Prediction markets, a hot topic from North America to Brazil. No longer is it only a topic discussed in the United States, but it has expanded broadly through the Americas. Earlier this year, Calchis founder Luana Lopes Lara expressed interest in entering the Brazilian market, drawing parallels with how the company expanded in the United States. But is this model viable in a newly regulated market like Brazil? Welcome to the Road to Rio series, I'm Fernando, not Media Manager for SVC and your host for today's episode of iGaming Daily, which is, as always, brought to you by OptiMove, the creator of positionless marketing and number one player engagement solution for iGaming and sports betting operators. Learn how OptiMove's positionless marketing is changing how iGaming teams operate. Discover how operators are using OptiMove's positionless marketing platform to launch personalized CRM campaigns, dynamically change casino lobbies, and bed slips and create engaging gamified experiences. Let's learn more at OptiMove.com. Actually, before we have the intro for today's episode's guest, we have some breaking news for you, listener. Brazil's stock exchange, B3, is actually expected to roll all its prediction market products as early as March or April this year. So this was said by the CEO, Gilson Fiuca-Stan. on the 5th and this episode was recorded on the 3rd. The products that are going to be offered involve the Bovespa, which is the Brazilian stock market, the US dollar, and also Bitcoin. The products, as the CEO said, will follow a binary structure, meaning the participants will take a position on whether a specific outcome will occur or not. So investors could actually bet on whether the dollar will exceed a predetermined level by the end of a given period or not. B3 is currently in discussions with regulators to define the restrictions or to understand who the target audience is, all of that part. The CEO also mentioned that many global exchanges are seeking to generate between 30 and 35 % of their revenue from data analytics. In this case, B3 is said to believe that they can have a competitive. advantage by expanding the traditional capital markets into areas such as oh sports betting and gaming event. Hugo, how are you today? Thanks for joining us on iGaming Daily. Thank you so much for the invitation. Very glad to be with you today here at this episode. And thank you again for the invitation. I'm very good. How about yourself guys? I'm very good. I'm very, very hot here in the southern hemisphere. But of course, Hugo said guys, because we are also joined by Ana Maria Menezes. Ana, how are you today? Yes, hi Fer, hi Hugo. Well, I'm pretty excited to talk about prediction markets today. I think it's a topic that it sort of caught my interest uh months ago and actually we have some stuff to talk about. So yeah, I'm pretty excited. All right, then let's just crack on Hugo. First of all, do you think it's really possible to consider the prediction markets in Brazil right now? Because the US experience shows that prediction markets bypass state rules. and rely on federal regulation for operation. Do you see this same path as plausible in Brazil or does the country's institutional environment tend to block this kind of movement? Well, guys, that's a very uh not easy question. It never is. never is. I understand it 100 percent. I mean, we just have 12 months of regulation right now in Brazil with the uh fixed odds, uh betting. uh And I think that's pretty uh early to discuss predictions marketing Brazil. Of course, we all know that is already a reality. ah have been we have we have seen movements and people from Brazil involved in those markets in the US ah trying to uh at some point get into the Brazilian market as well. But I think. knowing Brazil, knowing our legislation, knowing about our market, now knowing local people. uh I think that's too early to try to get into this. Again, legally in Brazil, of course, at some point we can we can see. And I was talking to some friends and. There are already some websites working in Brazil uh through prediction markets. To be honest, I don't know how successful they are. ah But legally, I can see the market. I understand the market is a reality and I see Brazil getting into very soon. But ah I don't see it as a uh legal uh or or regulated, let's say that way, uh marketing Brazil at the moment. think honestly, and I don't know what you think of it, Hugo, but ah do you think that maybe we can be pushed into this by because we know that how she the the the founder, Luana, she said we want to get to Brazil this year. So do you think that this could actually pressure us into dealing with this earlier? Because it's the biggest. uh one of the biggest companies that we have in the world doing that. So I'm actually curious to hear what you could think about that. think that as I don't know her, but I think that she as a Brazilian, of course, everybody wants to get into this market as an opportunity. ah As she knows, of course, that Brazil is already uh regulated for sports betting and for fixed odds and all. or all other verticals. I understand that she wants to, but of course, I understand as well that she will not topordise her business in the US because of getting into the Brazilian market, which is still not regulated. So I can see that maybe there will be some push uh not only from her, but from her competitors as well. ah As Brazil is always a hot topic, it's always a hot destination, a hot market. Everybody's talking about Brazil at the moment. So I can see that maybe it can push it. ah But again, not illegal or regulated yet. I think that's still very early to talk about a regulated market for that. what do you expect the prediction markets to look like in Brazil? This market, of course, has a very has very unique characteristics and we are already seeing that in the US market but of course Brazil and as the whole Latin American region is much different. Do you think it's going to resemble the US market, the US prediction market em niche or how do you see prediction markets looking should they enter Brazil this year or in the future? I mean, I understand that some discussions I have been talking to friends, reading some articles, I can understand that people see as a possibility of adjusting this as a fixed odd uh under our regulation, uh which at some point makes sense only if it's a sports event or something related to sports. I honestly I can see that. But I also understand that uh has to be has to be regulated by CVM and not by SBA. It's something that I uh and forgive me if someone disagrees with me, but it's my perspective. ah I can see that's more. uh Into not gaming. uh And then more as it says is a prediction market, something that goes beyond uh gaming, which when you see you talk about fixed odd, you have uh a lot of information behind it. You have a lot of statistics behind it. You have a lot of uh certifications behind it, uh which it's not something that we come with the prediction market. So Again, I really can't see predictions market coming to Brazil at some point. uh don't know, to be honest, if the Brazilian uh people, client, player would 100 % understand what it means. Maybe we need some information, education. Of course, when you talk about US, US has more than 50 years of gambling and people are more used to it. We still are with 12 months of regulation. And remember that we don't have land based gaming. So it's more complicated to people to understand that. So, again, ah I can see the movement, but I don't see uh a big uh hit at the beginning because, again, we need some education for the clients. you say it should be regulated by the CVM and not the SBA, of course, the SBA being the gaming regulator. With the CVM, you mean the Comisado Valores Immobiliarios, which will be the equivalent to the SEC in the United States, right? Yes, yes, that's right. That's right. mean, it's as some people says, it's a complete different thing, a complete different animal from my perspective. So we should separate it. Of course, at some point we can see some similarities ah related to sports, in my opinion. ah But I think that it's a different mark. It's a different thing. So we should keep it separate. That's my opinion. uh I think it's interesting that you mentioned CVM, especially because just to give our listeners a bit of a context, we have the SPA and as Zulu mentioned, They take care of the sports betting and the aiming industry overall. However, the CVM takes care of financial derivative markets in Brazil, which is maybe, maybe again, we're talking about maybe here, uh a model that prediction markets could actually come to Brazil. And again, not working exactly like that, but maybe an inspiration. So the negotiations with these financial derivative markets occur in B3, which is our biggest financial, ah if I can say this way outlook of what the Brazilian and the global market look like from the Brazilian perspective. So we can access ah bonds, financial bonds and all of that capitalization title. You can just see everything through there. And then the CVM supervises the whole thing. ah And then we also have maybe another option, which is private pools. which is something that we already have in Brazil. It's a similar structure, but it's not exactly this, um, this name is not exactly the name that we give to it. Uh, here we could say, um, investment funds, private investment funds. could also say private consortiums, which is something that we have, uh, here as well, investment clubs or even sort of like agreements, contract agreements and all of that. So. Again, this has to follow the CVM standards and all of that. And we also have capitalization titles, which are supervised by a um a different organization, which is Suzepe. And so, yeah, we have this sort of like ways they could actually get into the country and get into the market. But again, none of this are related to the word sports betting, the word, sorry, sports betting in this case. So I think this is precisely where we get into the point of. How would they actually do it? Because again, none of these have the option of saying, okay, so if you want to bet maybe on stuff that it's, again, it's, this is only predictive, but ah if you want to bet on something outside of sports betting, then you already fall into the general regulation of you can do that. The regulation doesn't allow it. So, but at the same time you have consortiums, you have, ah we have sortius as we call it. You have lots of different draws. Thank you very much. We have draws and all of that. So how are they actually going to put this all together? I'm actually curious to see how it would be done because again, as we mentioned, we have the two things, but they're separate. They don't work together now, but who knows. And, and, uh, another thought, mean, I, again, I will, I will rephrase, but I will Repeat myself, we just have only 12 months of regulation. We took so long to get here at this position. All the road that we came through since 2018 and then 2024 with the whole year of building up this regulation. And now we're still in the process. of everybody understanding how our business work. ah don't see SBA get what I don't see SBA regulated it. I think that they don't want this in their lab for now because they have so much to do. Again, I just want to congratulate my congratulate my friends from the SBA. are doing a very, very good job. But I don't see them taking this uh into their uh accounting and making sure that they're going to regulate it because that's my perspective. I don't think that they want it for them now. And of course, speaking of regulation and uh how prediction markets would operate in Brazil, of course we have to hashtag wait and see. I'm sorry, I just had to put one of my hashtags in there. um We have to consider the role of banks, acquirers, course, picks, the almighty picks, and their role in the regulatory enforcement. Would prediction markets be able to operate in Brazil without explicit approval from the regulator considering like people need to get their money into the platforms somehow? What do you think? It's a very good point. mean, we all know Almighty Peaks, as you said. And thanks to Peaks. ah I mean, we are very different. mean, Brazil is very different. We talk to friends all around the world and they have cash, they have uh credit cards, they have uh wallets, they have everything. But for now, for us, 100 percent is Peaks, which is very good. ah So again, uh Central Bank right now is doing a very good job trying to block the illegal operations in Brazil through PICS. So that said, I don't see predictions market coming to Brazil without regulation from the Central Bank from PICS. I think everything has to be attached ah because again, we all want uh Brazil with the uh legal environment. So PICS has to be involved, Central Bank has to be involved and of course regulation has to be in place as well. right now we're going to do a very quick break but we will be right back with more iGaming Daily in this Road to Rio series to continue talking with Hugo Baumgartnert, Chief Business Officer at Group Sportchess Gaming to discuss prediction markets and all that may happen in Brazil with this blooming uh niche in the gaming industry. We will be right back. And we're back with more iGaming Daily in this new Road to Rio series with Hugo Baumgartner, Chief Business Officer at Group Sporties Gaming and Ana Maria Menezes of course. To the cast prediction markets in Brazil, we can't stop or avoid talking about this recent case in Brazil that covered regulators authorities and where the line is drawn. for each of them. So Ana, can you provide some context on this and how could it impact on this prediction markets situation? so uh as Fer mentioned earlier in January this year, ah we actually saw a Brazilian federal court that suspended a restriction imposed by a regulator of draws in Brazil, as we're going to call it. And that actually prohibited the use of referential images in advertising of capitalization bonds. Bear with me with the explanation. But the judge found that the regulator had overstepped its authority by creating a restriction that was not expressively provided in the rules ah issued by the National Council of Private Insurance, which here we're talking again about draws. So. there's here the case is pretty much can we add rules if the regulation is already there? Can the regulator prohibit things? Can over what's already being said? So yeah, this is the case that we have here. All right. And as we know, Caulsey also entered the US market following a similar pattern to that. So do you see room for prediction markets to follow that path? advancing through legal challenges over regulatory interpretation and institutional competence before any specific legislation is enacted. I can see that path, to be honest. mean, maybe should be the first step that Cauchi or any other operator, let's put that way, uh get into the Brazilian market. Of course, we do have some different institutions which takes care of different uh topics. And of course, I can see uh any operator on the prediction market getting into this role or way. Let's put that that way as well. um Trying to get into the Brazilian market at first and then, of course, once everything already is running, they would seek, in my opinion, uh the regulation, which is the right way to do this stuff. So yes, I would say that they would start with this way at the beginning. And after all this, to wrap this episode up, can we guess how and when Kalshi, if maybe, and what and how? All the questions we can ask. in all seriousness, mean, how, when and if Kalshi is going to enter Brazil. I Kalshi is going to... I think Koushi is going to get not only Koushi. I think all the other operators also will get into the Brazilian market for sure. We have room for that. Of course, Brazil is is big enough. ah But before, I would say that to be successful, we would need some education. Oh, yeah. My perspective, ah Brazilians, they are not used to it. So I think that They would need at some point some education regarding this, let's say this new industry. Yeah. think talking about education, we're already pushing for it so much with the sports betting industry as well, because we lack a lot of, um as you mentioned, education for Brazilians about what is actually sports betting, how to look for help and operators are doing of course, um the hard work of going out of their way and actually trying to explain it to people. ah it has to be a general uh movement. So how are we actually going to educate people about predictive markets if we're already trying so hard and not reaching everyone when we talk about responsible gambling in an already regulated market? So there was no time, actually. We're talking about time here, as you mentioned. So I think it's hard to think about educating people about another market if we're already trying to do that with a regulated one. I think it's a fair point of view to consider. is space for it. I understand the market is there. I understand that the market is there, but I don't know how successful it would be as we're still only 12 months of regulation uh on our market. So something new, something different, something similar. So we have to educate people so they can understand and be a hundred percent aware. What is it and how to do it? Yeah. Hashtag waiting. See, right. Hashtag waiting. See what happens with the prediction markets in Brazil, whether they enter uh massively in 2026 or if they start like making the first baby steps in the country. But I can't end this road to Rio's uh episode without asking. What are your expectations for SBC Summit Rio next March? Beautiful show, for sure. In Rio, a very well organized show. really like it. we are looking forward to see our friends, our uh providers. We're going to have a very beautiful booth at the show and everyone is welcome. Yeah absolutely, absolutely everyone is welcome like Hugo Baumgartner said. You can meet Hugo Baumgartner at SBC Summit Rio next March 3rd to the 5th. Thank you very much Hugo for being today with us uh in this new Road to Rio series of iGaming Daily. Thank you very much Ana Maria Menezes and Anaia Macdonald for producing this episode. I'm Fernando Nott and to our listeners out there, we'll see you in the next one. Goodbye.