With a huge national audience drawn in by soccer fans, the Brazilian market has the potential to be one of the largest in the world. Franscesco Rodano, Playtech’s chief policy officer, outlines how essential it is for operators to ensure a safe and sustainable launch in the market, speaking to iGB on how they’ve tackled the teething pains of the complex ruling.
Francesco Rodano
Having taken four years to get to this point, the implementation and opening of Brazil’s sports betting market is finally expected to happen later this year.
And Playtech’s chief policy officer Francesco Rodano believes the market offers vast potential. “The massive size of the unregulated gambling offering, and the keen passion of Brazilians for sports, suggest that it has the potential to become one of the largest regulated markets in the world,” he says.
“At Playtech, we will be ready to play our part, both by establishing strategic partnerships or joint ventures with local, market-leading operators, as we did in Mexico with Caliente and in Colombia with Wplay, and by supplying our products and services to local and international licensees of any size.”
Conscious betting
But new opportunities bring new risks, and Rodano believes it will be vital to embed sustainability into Brazilian sports betting from launch.
He argues the market opening will see operators place a huge emphasis on how to safeguard customers, in line with wider industry trends. Conscious betting places a focus on maintaining a balance between money and play to avoid further game play after losses.
Operators now not only need to identify possible risks, but act on them through setting limits to avoid compromising the mental and financial health of players.
“Even if only a minority of players can be harmed by gambling, it is critical – and an ethical imperative – to spot them at the earliest possible stage,” he explains.
“There are many ways to interact with players at risk, from generic email messages to personal interviews carried out by safer gambling specialists and even psychologists. All operators should be able to activate the most suitable intervention depending on the risk level of each player. At Playtech, we have developed a first-level interaction tool that is proving very valuable.
“In our trials, AI-driven customised interventions proved to be up to twenty-one times more effective in triggering a responsible gaming action, such as setting a deposit limit, compared to previous blanket email responsible gambling campaigns.
AI technology
Traditionally, gambling operators have been using simple scorecards based on basic thresholds, such as money deposited or staked, and time spent playing. This one-size-fits-all approach has a fundamental flaw: it tends to consider all players the same, while, at Playtech they recognise that “human behaviour is much more complex and diverse.”
“Online gambling gives us access to a myriad of individual data that was not available in the past,” Rodano says. “And it is not just the gambling data, which is already very granular. There are many other sources, given how ‘connected’ we are. I know that VIP managers check a player’s activity on social networks, for instance, if they suspect that something is going on.”
“Machine learning offers an invaluable opportunity to try to ‘read’ people’s behaviours. For example, in 2019, an AI poker bot developed by Facebook and Carnegie Mellon beat some of the world’s best professional players. Using AI, the software developed an understanding of human behaviour that outsmarted the players.”
Playtech is adapting this technology through its safer gambling analytics platform BetBuddy. Its software is designed to ‘read’ players’ behaviours to identify those at risk at an early stage. It relies on machine learning models that process for every player, providing up to 70 behavioural markers to pattern match them with those who are known to have experienced harm (e.g. regular players who eventually decide to self-exclude or declare to suffer harm).
“The models are supplemented with ‘expert rules’ to further improve the data-driven approach and, most importantly, are fully explainable. The list of individual markers that drive the risk, allows the operator, as mentioned earlier, to carry out a personalised intervention, which is significantly more effective than the traditional, generic interactions.” Rodano explains.
“And we were pleasantly surprised to see that our survey showed that 76% of Brazilians are in favour of betting companies using AI to detect potential at risk players.
The dangers at play
Playtech has just conducted a bespoke consumer survey across four Latin American countries, including Brazil, exploring the key issues related to responsible gambling in each territory. In Brazil, 56% of the respondents declared that they were already betting, despite the lack of regulation. And the majority of them advocated for better local regulations and more information on responsible gaming tools.
The survey revealed the main fear Brazilians face when gambing is losing all their money through addiction. Alongside this, the risk of fraud, rigged games, missed winnings payout, privacy breaches and amounting risk of financing criminal activities all come into play.
Rodano points out that with the legal market not yet live, many of the gambling companies local players have interacted with operate from an offshore and tax-free location where no consumer protection measures are enforced.
With the Brazilian ruling, sports betting is regulated, yet igaming remains unregulated. Rodano stresses the importance that other forms of gambling need to follow suit.
He therefore emphasises that the regulatory framework needs to include casino games and the popular forms of sports betting consumers look for, otherwise there is little incentive to move to the licenced side of the country.
“This is a possible risk element in Brazil, as the law 846/2018 only provides for sports betting to be regulated, while casino games, which generate almost half of the global gambling revenue, will remain illegal for the time being, leaving Brazilian players without a legal alternative to their offshore version.”
Working together, not against
“We believe that a gambling regulatory framework only works when all the three involved parties — the state, the player, and the gambling industry — achieve their respective objectives.” Rodano says.
He continued to say that suppliers have a neutral role. “We work with hundreds of B2C operators, who often compete fiercely against each other, but this competition doesn’t affect our ability to invest time and energies in safer gambling research and development.”
“Our responsibility is essentially two-fold. On one hand, we want to develop safer gambling solutions that work, supported by evidence and extensively trialled, which are focused on the individual player’s wellbeing and not generically on the entire players’ base, since we are all different.
“On the other hand, we need to educate both policymakers and industry peers on the potential of this approach.”
To make this work, he says, more collaboration across the industry is essential. Rodano acknowledges that for a market to be successful, it’s not just competing that operators need to focus on – it takes cooperation across the whole gambling industry to succeed.
“There are many machine learning initiatives and trials being carried out by different operators, but often the findings are not shared with others,” he explains. “Protecting the health and improving the well-being of everyone should be a joined-up, industry-wide effort, and not a way to achieve a possible competitive advantage.
“By sharing our successes and especially our failures, we can learn collectively and help make the gambling industry sustainable in the long term.”
Playtech’s vision for the Brazilian market is clear: safer gambling must have the same prominence in the market as it does in more mature European jurisdictions..
“Over the years we have been engaging in conversations with many regulators across the world, and as a result, several of them are introducing regulatory requirements on behavioural analysis and personalised intervention. There are now examples in the Netherlands, France, Spain, Germany and Sweden.”
“We are of course willing to do the same with the Brazilian policymakers, to promote a safe, sustainable, and long-term growth of the Brazilian legal gambling industry.”
