Gaming Intelligence Latin America Bulletin – June 202115th July 2021 10:33 am GMT
Gaming Intelligence Latin America (GILA) is our new monthly bulletin covering the most important developments from the rapidly developing emerging markets of Central and South America
Feature: The profile of the Latin American player
European companies are flooding into Latin America, but it will not be a simple case of exporting their online casino to these emerging markets. Gaming Intelligence Español speaks to those in the know about what they can expect from a new breed of player
“The first thing to say is that the Latin American markets are still very young, so it’s too early to draw conclusions about online users,” says Habanero business development executive Vera Motto.
Because of the developing nature of the market, most local players still do not have access to the quality and quantity of products available to their European counterparts, and many continental operators lack some of the verticals on offer across the Atlantic.
“The RTP offered on slots is generally lower therefore the product potential has not reached its maximum yet,” explains Motto.
That said, she is keeping a close eye on the data and the patterns that emerge.
“We have seen, for example, that local jackpots have proved popular, as well as table games.”
“There are interesting behaviours to analyse,” she adds. “For example, LatAm’s land-based heritage means that classic slots generate stronger appeal than more modern ones which perform well in Europe.
“Bingo is popular for the same reason – it’s familiar to local customers and has deep local roots. However, in markets such as Mexico, players are used to a wider variety of content, which is why slots perform better there than they do in other LatAm markets.”
The average player is middle aged for both slots and table games, according to Habanero’s data. Again though, she adds the disclaimer that the data is incomplete.
“It's too early to tell,” says Motto. “Latin America has the highest percentage of black-market penetration in the world, so we don’t yet know whether table games are popular with the younger generation or not.”
And what about the younger generation of players?
“They are more demanding,” explains Motto, “they tend to choose games from a technical perspective – they want light games that load fast.
“Table games also provide the best cross-selling opportunity with the sportsbook market, so in such a sport-obsessed continent as Latin America they will be around for a long time to come.”
In terms of age, operators are looking at older millennials and upwards and female players are an ever-growing presence. However, the demographics vary significantly throughout the region.
“It is clear that we are starting to move away from the pattern of slots being enjoyed exclusively by middle-aged women and older players, as Gen-Z gamers begin to hit the terminals,” says Gaming1 chief business development officer Victor Araneda.
Araneda sees too many cultural differences between Latin American countries to define a ‘typical’ LatAm player.
Specific national and regional preferences are commonplace, but one trend that he sees emerging is enthusiasm among the younger generation for products that bridge the gap between recreational and traditional.
“Those are the offerings which offer a more social and community-based interaction, such as live dealer games and tournaments,” says Araneda.
His position on classic table games is clear. Not only are they still of interest, but in some cases they are the strongest revenue driver.
He says that younger players at Gaming1’s Colombian partner VICCA (Zamba.co) show a strong preference for traditional table games.
“LatAm's gambling market is currently dominated by sportsbooks, but it is just a matter of time until the casino sector catches up, as regulations continue to evolve and players develop a correspondingly improved understanding of our industry and what it offers.
“There’s certainly an opportunity for operators, with the potential to bridge not only regulatory gaps but also build a strong, sustainable relationship with their customers and maximise the cross-sell accordingly,” Araneda adds. “Heading into a summer of sporting action, the casino vertical would do well to bear this in mind.”
Players in Latin America generally bet smaller amounts but more frequently. One of the main points of difference between them and their European counterparts is loyalty.
Playson sales director Blanka Homor stresses that player retention rates are often stronger in Latin America than in European markets.
“When Latin American players are satisfied with the product they are offered, they tend to return to the same casino time and time again,” she says.
Homor sees that slot tournaments, in particular, have become a lot more popular, especially in countries such as Peru, Mexico, Paraguay and Venezuela. Obviously, the pandemic has impacted the market in many ways, but it significantly accelerated the trend towards e-commerce, too.
“The temporary pause on sporting events that took place last year encouraged some to shift to the online casino sector, especially slots. The closure of land-based casinos and betting shops, meanwhile, forced many traditional casino players to move online,” she explains. “As a result, they have become closely familiar with the different products on offer, learning how to play and enjoying their experience. That shift in demand towards digital offerings is likely to continue in the years to come.”
OneTouch business development manager Unai Concha Olabarrieta compares Latin America’s current situation to the European market a decade ago. “It’s still very early days for the continent’s online market, but the main difference is that the typical Latin American player’s lifetime value to an operator is still much lower than that of their European counterpart,” he says.
This means that to achieve a similar revenue, a much higher number of active players is required. “So, acquisition in the early stages of a casino’s journey is of huge importance.”
Olabarrieta says that slot providers are developing new ideas with a view to appealing to more players from younger audiences.
“We see this in all industries, where brands are trying to fill the gap that their older audiences are leaving behind.”
He is quick to add, however, that table games remain the most popular games on offer. “They always have been, and they always will be.”
Interview: Microgaming puts LatAm at the centre of global expansion plans
Microgaming continues to focus on its international expansion strategy, with Latin America and Spain at the heart of this strategy over the coming months, says COO Andrew Clucas.
In recent weeks, Microgaming has completed a number of deals in Argentina and Clucas is optimistic that others will follow in Argentina and around the Latin America region.
"Latin America is key for us and we are optimistic, because the indicators suggest that our content performs very well in this region," Clucas tells Gaming Intelligence Español.
He says the company has a personalized offering for every country in the region, with a particular focus on Latin America’s regulated markets.
"Legislative developments keep the entire online gaming industry on its toes,” he says with a smile.
“Argentina is a growing market with a strong casino culture, where our slots engage the customers. We are on our way to being one of the first partners of Codere, Boldt and Upline.”
However, Microgaming’s ambitions extend beyond Argentina’s borders. Clucas tells us that the company keeps a close eye on all emerging markets in the region and that he fully expects its games to be popular in countries such as Colombia and Chile.
“We are closely observing Chile's situation. It is a country with a good future and we expect to make movements there next year,” he says.
On the European market, Clucas notes that Spain is still adapting to the legislative changes introduced by Government last year to limit advertising.
Microgaming’s clients in the market range from local operators such as Luckia, Euroapuestas and Golden Park to international partners like bet365, Gamesys and Entain. All have needed to adapt their promotional campaigns, with the focus now firmly on player protection.
"Microgaming is fully compliant with the proposed changes to improve player protection,” Clucas states. “The goal is to work with our operators to offer solutions to balance these new player protection requirements with providing an engaging experience.”
IBIA study ranks regulatory, fiscal and integrity regimes
Colombia and Mexico join most of Europe in the list of countries granted amber accreditation, but Argentina is branded red
The International Betting Integrity Association (IBIA) has released a comparative study of the regulatory, fiscal and integrity regimes of different jurisdictions around the world.
It has introduced a traffic light system, with green representing an attractive market, amber connoting a moderate to challenging market, and red meaning the market is undeveloped and very challenging.
Denmark, Great Britain, Malta, Nevada, New Jersey and Sweden are the only regulated markets that made it to green, while the likes of Argentina, Australia, Canada and Portugal saw red.
IBIA used five assessment criteria - regulation, taxation, product, integrity, and advertising - awarding scores of up to 20 for each category. A green market is one that scores more than 80 points.
Colombia is seen as “an emerging online market with a moderate GGR tax and wide product offering”.
It says that Colombia is likely to attract more international operator interest, but that it would benefit from “continuing to strengthen its framework, notably on betting integrity”.
The report finds that Mexico has an attractive framework of “unlimited licences, a wide betting product offering and an ability to advertise betting services”. However, this is set against a dated law primarily focused on land-based gambling with a relatively high tax burden and a lack of market integrity measures.
“The high turnover tax burden makes Portugal an unattractive market with a low number of licensed online operators and a land- based monopoly,” the report states. “Unlikely to attract many new operators and sizeable player channelisation offshore is expected to continue.”
Argentina is seen as a fragmented market, with the challenges of limited online licence availability and a lack of integrity measures, but local and international operators are showing interest in the market’s potential.
Codere Online to list on Nasdaq via Spac combination
Gaming operator Codere plans to list its online operating division in New York through a business combination with special purpose acquisition company (SPAC) DD3 Acquisition Corp II
DD3 is a Mexico City-based finance group, led by former Goldman Sachs bankers Jorge Combe and Martin Werner. The combined business will continue to be led by Codere Online managing director Moshe Edree and the existing Codere Online management team, with Codere Group retaining a majority interest in the business.
Edree commented: “By going public and with the new capitalization, we will be in a superb position to leverage our online business in our core countries of Spain, Italy, Mexico, Colombia and Panama, as well as the City of Buenos Aires, where we expect to start operating in late 2021, to fuel our further expansion in other high-growth Latin American markets.”
Codere Online has operated since 2014 as a subsidiary of Madrid-listed Codere Group, providing online sports betting and casino gaming to players in Spain and Latin America.
The business combination values the combined company at an estimated pro forma enterprise value of approximately $350m, or 2.3x Codere Online’s estimated 2022 revenue of approximately $150m, with an implied equity market capitalization of approximately $500m.
Following completion of the transaction, which is expected to occur in the fourth quarter of this year, Codere Online will have approximately $145m in cash to fund marketing expenditure, technology platform improvements and expansion into new high-growth Latin American markets.
Pragmatic Play wins City of Buenos Aires license
iGaming content provider Pragmatic Play has been awarded a license to supply online casino operators in the regulated market of the City of Buenos Aires
The Buenos Aires authorisation follows the company's recent deals with Doncashino in Paraguay, Boldt Bplay in Argentina and Paraguay, Grupo Cordialito in Venezuela, AgClub7 in Brazil and Codere in Spain and across Latin America.
“We’re very pleased to receive our LOTBA authorisation allowing us to provide our products in Buenos Aires city,” said Victor Arias, VP of Latin America at Pragmatic Play.
“It is an important step for us as we look to continue our expansion in Latin America, and we can’t wait to bring our top-performing games to players in Buenos Aires City.”
Pronet Gaming boosts LatAm proposition with Vibra Gaming
iGaming supplier Pronet Gaming has enhanced its Latin American offering by partnering with Argentina-based games developer Vibra Gaming
The deal will see a series of casino titles developed specifically for the region, including both original and licensed content.
Formed by Leander Games founders Ramiro Atucha and Marcelo Blanco, Vibra Gaming offers a range of slots and video bingo games that blend traditional player preferences with modern game dynamics.
The company also offers a classic range of Brazilian land-based favourites converted for online play.
“We’ve been working for many years in the development of content for the LatAm markets and we consider this partnership with Pronet Gaming to be an essential milestone,” said Atucha, chief executive of Vibra Gaming. “We believe that their distribution reach will accelerate our growth and that our content will help them grow to greater heights.”
Vibra Gaming holds the rights to international brands Popeye the Sailor and The Phantom, together with regionally famous names such as Condorito and “El Potro” Rodrigo.
Pronet Gaming CCO Bobby Longhurst said: “We were particularly impressed with Vibra’s innovative approach to video bingos and slots, as well as their smart use of licensed content with localised appeal. We believe these games will help our operator partners ramp up player engagement in this market.”
Kambi continues LatAm drive with Olimpo.bet partnership
Stockholm-listed sports betting technology provider Kambi signs long-term agreement with NG Gaming to support the launch of its Olimpo.bet brand across Latin America
Initially targeting Peru, the multi-year partnership builds on Kambi’s established presence in the region, where the supplier is already live in Colombia and Argentina.
“This is an important strategic partnership for Kambi as we continue to expand our footprint in Latin America's growing sports betting market,” said Kambi CEO and co-founder Kristian Nylén. “The ambition shown by NG Gaming to be among the leaders in sports betting matches our own, and we are excited at the prospect of Olimpo.bet going live in time for the Copa América.”
A spokesperson for NG Gaming said: “We are delighted to partner with Kambi to launch our new disruptive brand. It quickly became clear Kambi was the only partner we could trust to support us with our ambitious time-to-market strategy and future expansion across the South American continent.
“Furthermore, Kambi’s flexible technology, alongside its proven risk management and price differentiation capabilities, will give Olimpo.bet a platform on which to outcompete the market.”
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