Brazil’s attempts to regulate sports gambling have attracted a lot of attention. However, the law also includes betting on esports which may prove to be an important sector for the country. Marese O’Hagan talks to Oskar Fröberg, the founder and CEO at Abios, about the reception of esports gambling in Brazil and if its legalisation could mark a major turning point for this industry.
Brazil has seen a lot of discussion about sports betting, especially since the passage of Provisional Measure 846/10 in December 2018. The government was given a period of two years to develop sports betting legislation. This time frame has been extended by two more years.
The end date of the year 2022 is now in sight. Operators are now taking notice of Brazil’s love for football and other sports after the rules published in early this year. Brazil’s esports industry is also worth a lot of attention.
Abios has focused on the Brazilian market since the company’s inception due to Brazil’s vibrant esports industry and the presence of a few large esports groups.
Froberg says that Brazil was on his radar as far as esports went when he started Abios almost 10 years back. In 2013, Brazil had already become a major player in League of Legends. There were many large League of Legends groups on Facebook, where players would discuss and chat about it.
I understand that the goal is to regulate or legalize both sports and esports wagering by the end of the year 2022. Because we offer odds and probability products across many regions (and in every region where we are licensed), we keep a close eye on this kind of thing.
Froberg thinks that South America is a sports lover, and this has led to a preference for games with sports themes such as FIFA.
Froberg says, “In South America as a whole, there is a huge interest in FIFA and esoccer.” In the South American marketplace, Brazil is no different. They are a football/soccer nation, so they will be interested in FIFA or esoccer.
The Brazilian people are, in my opinion, extremely dedicated to sports and are interested in them in general. Many of them are also very, very into esports.
The Road to Enactment
Esports are captured in Brazil’s sports betting regulations, meaning that many aspects published in May – such as a BRL22.2m (PS3.6m/EUR4.2m/$4.4m) licence fee – will be included.
Froberg points out that the most important difference will likely be that betting is only legal if an operator has a subsidiary within the country.
The Brazilian regulation will have some specific aspects. For example, I believe that there will be certain restrictions on the products you can offer. You’ll need a Brazilian subsidiary to do so. This increases costs and reduces the competition.
He continues that this could benefit established esports companies, but it could cause problems for newcomers to the industry.
The esports startup community may not be as happy with this.
Froberg argues that despite the uncertainty of regulation, there exists a vibrant esports industry in Brazil. It could be difficult for sportsbooks to embrace esports.
Froberg, however, isn’t concerned with how to get bettors interested in esports. He believes it’s a non-issue. Froberg says the desire for gambling is present within certain esports groups, so the emphasis should be on getting players of esports to wager rather than attracting bettors.
He says that esports betting is a natural part of the CS:GO community. I think skin trading has always been a part of the CS:GO Community. Many Brazilians used to trade skins when the grey area was still in place, prior to Valve banning it.
When you are watching a sport or esport, the people will want to bet and enhance their viewing experience.
Marketing could pose a challenge. Froberg cites the Netherlands recent regulation rewrite as an example. This was followed quickly by strict measures regarding advertising. The operators may need to take steps to prevent a backlash similar to that experienced in Brazil after the launch.
He says that in certain countries, the marketing of betting to users is strictly regulated. It varies from one market to another. The Netherlands is one example. It was reregulated just this year, and the rules are very strict.
Focus on LatAm
Froberg’s business is interested in Latin America, not just Brazil.
Froberg believes that LatAm is an exciting region for investments. This belief has been backed by many operators who have raced to close deals with the region in recent years.
Brazil will be one of the most important markets in the future for the growth of esports, as well as sports generally, says Froberg.
It’s because of this that we are seeing a number of companies investing heavily not just in esports, but in sports in general and in sports betting. There’s an enormous amount of belief in a positive trajectory for the market.
Brazil is a special place in the world of betting. Brazil could prove to be the best place for a esports strategy, with its enthusiastic audiences and operators, and the support of those looking to take a piece of the action.