Uncertainty surrounding Brazil’s gambling market dominated discussions at this year’s SBC Summit in Lisbon, with operators and suppliers weighing the implications of the latest regulatory developments for their businesses. For platform providers, the situation has added another concern to an already challenging operating environment marked by rising costs, pressure on margins and increasingly demanding customers.
Speaking to Yogonet on the sidelines of the event, Steven Valentine, Chief Commercial Officer at Comtrade Gaming, discussed the impact of developments in Brazil, including the potential consequences for the black market and operators’ expansion plans elsewhere in Latin America.
He also addressed the growing importance of player retention, the financial pressures facing platform suppliers and the role of artificial intelligence in improving operational efficiency. Valentine shared details of Comtrade Gaming’s ongoing client migrations and its plans to enter additional regulated markets, including Finland, New Zealand and several European jurisdictions.
What have been Comtrade Gaming’s main priorities at this year’s SBC Summit, and how has the event been for the company so far?
The event in Lisbon has been heavily focused on the Brazilian market. Over the weekend, the developments there changed the dynamics of the show quite significantly. We had a lot of meetings arranged with Brazilian operators, but quite a few of them haven’t traveled because they’re dealing with the situation at home and trying to understand what’s happening. That has changed things slightly, and we’ll have to see how the situation develops.
At the same time, we’ve had plenty of meetings with European operators. We’re involved in a lot of migrations at the moment, with several clients moving over to our platform. It’s been a busy year for us.
The developments in Brazil have taken much of the industry by surprise. What are you hearing from operators about how long the uncertainty might last? Is there any optimism that the situation will be resolved?
I think if you ask 20 different people, you’ll get 20 different answers. The majority seem to think it could take around six months before the Senate rules on the matter, particularly because the Senate won’t be sitting for a two-month period over Christmas. It will also depend on how the election goes.
One of the bigger questions is what happens if the ban remains in place. What happens to the market then? There was a gambling market in Brazil before regulation existed. If the regulated market effectively disappears, will that previous market continue operating anyway? That’s going to be interesting to see.
There are concerns that a prolonged ban could push more players toward the black market, while also affecting investment in the regulated industry. How do you see that developing?
I think one of the biggest changes for the black market will be the crackdown on payments. Payments have always been relatively easy and straightforward in Brazil. But some of the laws surrounding this now include prison sentences for payment providers or people facilitating payment services.
I think that’s going to make it much harder to operate in Brazil’s black market than it was before. It will probably be good for those using cryptocurrencies, but for operators relying on fiat payments, it’s going to be more difficult.
Black-market sites have always existed, and we’re already seeing more of them appearing. But the difference is that payments won’t necessarily remain as easy as they have been. That might not change overnight, in the same way the ban happened, but I think it will change over time, probably fairly quickly.
Turning to player engagement, acquisition costs continue to rise, and retention has become an increasingly important priority. The World Cup also brought in significant numbers of players, raising questions about how operators can retain them after the tournament. What are operators prioritizing now?
Everyone saw the World Cup as a huge acquisition opportunity, as you mentioned. The results didn’t necessarily go the way operators would have wanted in terms of gross gaming revenue, but it was very good for player acquisition.
Ultimately, though, revenue isn’t profit, and acquisition isn’t profit. Acquiring players is expensive, and it only becomes worthwhile over a longer period if you manage to retain them. In terms of how we’re helping operators, we’re continuing to develop our CRM tools extensively. Many of our operators also use third-party CRM solutions, but we have our own CRM and gamification tools, which we’ve expanded significantly.
The idea is to maintain a relationship with the player even when they’re not gambling. It’s about building that brand identity so players continue connecting with the operator’s brand, potentially on a daily basis, whether they’re gambling or not. That’s something we’re very focused on.
The gaming platform provider landscape has become increasingly competitive, with companies competing on technology, flexibility, and market reach. Where do you see the market headed?
We’ve seen a lot of platform providers struggling. Some of these companies are listed on stock exchanges, so you can see their financial performance on a quarterly basis. Some are having to pivot toward B2C because they’re struggling on the B2B side. Others are moving more toward games or aggregation. The reality is that being a successful platform provider isn’t easy.
Clients have very high demands of their platform vendors. You need to be able to meet all those requirements, and you need to do it across multiple clients. Some vendors struggle because they acquire too many clients and then can’t support them properly. Others acquire too many low-value clients, and the business isn’t profitable.
Again, it comes back to that distinction between growth and profit. You can have growth without making money. We’ve also seen valuations across the gaming industry come under pressure. Gaming vendor valuations fell quite a few years ago, and now operator valuations are falling significantly as well.
That means investment money could potentially move away from gaming into other sectors. As a result, it is becoming much harder for gaming companies to continue operating at a loss, which many of them have been doing for years.
AI remains one of the industry’s biggest talking points at this year’s summit. Based on your discussions with operators, where do you see artificial intelligence delivering the most practical value today?
At the moment, AI in gaming is really all about efficiency. It’s about being able to do more with fewer resources. From our perspective as a vendor, the questions are whether we can complete integrations much faster and whether we can develop software more quickly.
For operators, it’s about things like using AI agents for customer service instead of relying entirely on people sitting at desks answering phones or working on laptops. That’s where I see the immediate value. Tasks that previously required people can now be carried out by AI agents.
It also allows companies to access and analyze data much faster. For example, when it comes to player segmentation, AI agents allow operators to do significantly more with their data in much less time.
So, for me, the main benefits are operational efficiency and the ability to accomplish more with the resources available. With taxes rising and operators’ margins being squeezed, they need to find ways to maintain the same bottom line. AI can help them do that.
Operators are placing greater emphasis on flexibility, reliability, and the relationship with their technology partner. Has the way operators evaluate platform providers fundamentally changed?
I’m not sure the process has fundamentally changed. I think it depends on where an operator is in its business life cycle.
If an operator has been in the market for many years and has had some bad experiences, its approach tends to change. Those operators may be willing to pay a little more, and they’ll examine potential partners in greater detail.
For newer operators, it’s often still about price, price, price. They want the cheapest solution. More mature operators understand the value of having a partner that can deliver consistently and will still be there in a few years.
They also look for a partner whose values align with theirs. Ultimately, the question they should be asking is whether that technology partner or vendor will allow them to execute their business strategy. That’s the key consideration.
We have these conversations repeatedly. Some operators understand and buy into that approach, while others don’t. Those that continue to make decisions primarily on price typically end up regretting it. But that’s the way it is.
Regulated market expansion is another priority for Comtrade Gaming, alongside new client migrations. Which markets are presenting the most interesting opportunities for the company, and what makes a market attractive to you?
Finland opening next year is obviously a big opportunity, and so is New Zealand. We’re already preparing to enter Finland with an operator from the first day the market opens. In New Zealand, we don’t yet have an operator confirmed for entry into the regulated market, but we hope to have one.
We’re also entering several other markets, including Germany, Sweden and Canada. We’ve just completed work for Latvia, and Lithuania is also on our list. In Canada, Ontario is our first priority. We’ll be doing Alberta as well, but that’s on the back burner for now.
We’re working on a lot of these markets at the moment, and the important point is that we’re not simply doing the regulatory work so that our platform can become available there. We’re actually entering these markets with operators. These market entries are part of the client migrations we’re currently undertaking.
As I’ve always said, we’re operator-driven rather than market-driven. When an operator comes to us, we’ll support whichever market they want to enter.
Finland has already seen more operator license applications than initially anticipated. How do you see the licensing process progressing, particularly for technology suppliers?
Yes, the number of operator applications has already exceeded expectations. I think the first round of licenses will be granted, and then we’ll probably see another round. But that’s for operator licenses.
For technology suppliers like us, the regulations governing platform providers haven’t even been released yet. I think those will come out in January or February, which would leave us around four months to complete the necessary work before the market actually opens. So there’s still quite a lot to be done.
Returning to Latin America, do you expect the uncertainty in Brazil to encourage operators to explore neighboring markets that may previously have received less attention?
Yes, I think that’s the natural development now. A lot of Brazilian operators are going to start looking at surrounding countries. If the Brazilian market closes, the question becomes how they can pivot into other markets that perhaps weren’t as interesting to them before but suddenly become much more attractive.
We’ll be there to support those operators if and when they decide to enter those markets. But I think people are going to be a little more careful this time, given what’s happened in Brazil.
It’s quite extraordinary what happened and how quickly it happened. But this is gaming, at the end of the day. Probably nothing should surprise us anymore.