Among the first to gain access to the legal online betting market in Brazil, KTO and Stake sat down with iGB to uncover the licensing process and how their early entry will bolster credibility among consumers.
After years of delays, Brazil finally launched its legal betting sector on 1 January, with operators looking to tap into what is expected to become a top-three market globally. For companies who have already secured licensed approval, the first-mover advantage has provided them with an exciting opportunity to be trailblazers.
The legal betting market in Brazil launched with 14 companies initially receiving full licences, as well as 52 operators that were granted provisional authorisation.
Provisional licences were granted to companies who are facing setbacks with their applications, such as certification delays. The extensive requirements relating to certification, as well as the huge number of applications submitted to the Secretariat of Prizes and Bets (SPA), have led to backlogs for the certifiers tasked with carrying out the assessments.
Provisional licences will allow recipient companies to remain active for 30 days initially, although that timespan can be extended by another 30 days should operators receive support from certifying entities clarifying more time is needed to conduct full certification.
One company granted a provisional licence is Stake, a predominantly crypto operator which has set its sights on regulated markets like Brazil as its next step. The company has also entered the neighbouring LatAm nations of Colombia and Peru recently.
Stake appointed Thomas Carvalhaes as its Brazil country manager in November 2024 to lead its charge into the market. Although the operator is still only provisionally authorised, Carvalhaes is expecting a full licence in the very near future.
“In terms of the provisional licence, yes, we have a few documents on which we’re working, mainly around certifications,” Carvalhaes tells iGB.
“It’s literally a matter of time. I’m sure that in less than a month, if not before the end of this month, we should be able to get the confirmed final licence.”
How will first-mover advantage manifest itself in Brazil?
A sports-loving country with a population exceeding 200 million people, Brazil’s legalisation of online gambling was always going to attract many international operators looking to get in on the action.
But with that interest comes competition, making it even more important for operators to formalise their activities and localise their offering to the Brazil population.
Being in that vanguard is crucial to operators such as Stake and Carvalhaes is aware of his company’s need to capitalise.
“I think it’s truly important, because the market has shifted enormously,” Carvalhaes continues. We’re talking about a gigantic market. It is for a reason, of course, that all the major operators are here and pushing very strong.
“Being at the front when it comes to acquiring a licence and being granted the permission to continue operating here, I think it’s a major competitive advantage.”
Approval a mark of credibility for KTO
KTO, meanwhile, was one of the 14 companies to receive a full licence on 1 January, allowing it to go live alongside brands such as BetMGM and Rei do Pitaco.
For a company with plans to achieve a 10% market share in Brazil, achieving full licence approval shows KTO means business, according to the company’s founder and CEO Andreas Bardun.
“It’s like a stamp of approval on how disciplined we are as an organisation,” Bardun says of gaining one of the first licences. “I think it gives trust to the customer base as well, seeing that KTO is a very serious company that is in the forefront because internally we have this goal to be the leading brand in Brazil, meaning showing a better way of how to do things. And I think this really showed that.
“We always said when we entered Brazil, we were doing this for the long run. Everyone knows for sure that KTO is going to be here to stay and be very important for the Brazilian igaming market for the future.”
Licensing process in Brazil a learning process
Brazil’s road to legal gambling has been far from straightforward, with five years passing between the national congress first approving online betting legislation in November 2018 and the chamber of deputies’ final green light for regulations in December 2023.
Even the licensing process has been a challenge for operators, with Bardun highlighting issues in regard to communication with the SPA and the gambling application portal, although he does express sympathy for the regulator which he says is still finding its feet.
“I’ll tell you that it was actually very stressful and there are many reasons for that,” Bardun says of the application process. “The regulator was also new in doing this, so they kind of moved the goalposts. Every time we thought we were ready and had done everything [required], they were asking for more documents or new requirements at the last minute that made us scramble.
“It was very stressful, I would say. It wasn’t the most organised licensing process. But I do have some understanding because this is something completely new for the Brazilian government. And to be fair to them, they were working all Christmas and New Year’s Eve to help all the operators.”
Faith in the regulation
Carvalhaes also empathises with the regulator, which he said took inspiration from more mature markets such as the UK to combine best regulatory practices from across the globe.
“Look, I think it was a mutual learning [process],” Carvalhaes adds. “Of course, no regulation and no licensing process has been developed perfectly from the top. There hasn’t been one single jurisdiction that has had the process [working seamlessly] and well put together from day zero.
“I think for governments, remember these guys are not gambling specialists, we are. So it’s very important that operators and associations are able to [use] common sense and find information exchanging [opportunities] to educate the government.
“I can say I believe Brazil has a very good, decent, fair and regulated market, both for the operators and for the customers as well,” he insists.
Big plans for KTO
With KTO fully licensed and Stake very much on its way, the companies’ full attentions can now turn to their pursuit of success in the hugely lucrative Brazil market.
Betano has made waves with its sponsorship-first approach in Brazil, while the presence of other international giants such as Bet365 will further add to the market’s competitiveness.
Bardun is not fazed by the size of KTO’s competitors and is confident the company will take a top spot.
“I have always believed that KTO will be a major player in Brazil,” Bardun declares. “I want KTO to be among the top three brands. That’s where we need to be.”
Stake pushing for excellence
Stake is also targeting a big slice of the market’s pie. And Carvalhaes believes a strong start is needed if the operator is to achieve its objectives.
“In terms of market share, this year we’re really pushing and we want to be positioned at least in the top 10,” Carvalhaes says. “I think we have what it takes in terms of product, knowledge, people and background, to be in the top five.
“In five years’ time in Brazil, if things continue the way they’re going, if we continue making the right choices when it comes to sponsorships and ambassadors and responsible gambling, and we continue being compliant to the regulator, I think we do have what it takes to be the top gambling and sports betting operator in Brazil. I feel very confident in saying this. Let’s be as ambitious as that,” he concludes.
Perhaps the hottest story in gambling, Brazil’s legal market launch is certainly at the forefront of many operators’ minds as they battle to be at the sector’s summit. Bardun believes “the race is on” and, for early licensees such as Stake and KTO, they’re looking to shoot out of the blocks and set the standard for others to follow in what is sure to be a fiercely competitive market.
