Brazil’s suspension of its regulated online betting market dominated conversations at SBC Summit Lisbon earlier this month, raising questions about the future of operators’ investments and the broader outlook for Latin America. In this interview with Yogonet, Eddie Morales, Business Development Manager at Zenith, discusses the uncertainty surrounding Brazil and the potential implications for player acquisition, while identifying Peru, Colombia, Paraguay and other jurisdictions as opportunities for the company’s regional expansion.
Morales also examines how Latin American operators are becoming more demanding when choosing technology partners, placing greater emphasis on platform functionality, operational control, CRM tools, player loyalty and differentiated content alongside pricing. He explains how Zenith plans to adapt its regional strategy by broadening its focus beyond Brazil and pursuing opportunities across fully regulated and partially regulated markets.
How has the show been for Zenith?
Zenith has been participating in this show for years now, and I would rank it as one of the most important events for us in terms of brand visibility and contact with clients, both because of the volume and the quality of the attendees.
The show is definitely improving every year. Instead of spending on a stand at ten different shows, it makes more sense to have a bigger presence and more focus at the predominant events.
What are some of the main conversations you’ve been hearing at the show?
Obviously, Brazil is number one. I recently published a piece called “Chronicle of a Death Foretold” because of all the rumors and noise there had been around Brazil. I honestly never expected a complete shutdown of the market. I expected some kind of measure, but not such a major move as saying, “The game is over, guys.”
A lot of people are expecting this to be temporary and for the market to reopen quickly. I see two versions. One is that it could reopen within 120 days because Congress won’t ratify the measure. The other is that it could go through the courts in January or February and not be ratified until March, perhaps with more limited measures.
Even so, if you have a player database sitting inactive for 30, 60, 90, or 120 days, you should be prepared to acquire those players again, because you may have lost them to another channel.
Looking beyond Brazil, how do you see the other Latin American jurisdictions developing? What is the strategic importance of the region for Zenith right now?
For Zenith, it is very important to enter regulated markets. Just before the lockdown, we had already obtained certification in Brazil, which is a shame because we had several agreements signed and others in progress.
So that has set us back, but we were already preparing to enter other regulated markets such as Peru and Colombia, which I think are the strongest and most serious markets on the continent, and also the most complete in terms of regulation.
Then you have Mexico. It is accessible, but it doesn’t have complete regulation; it depends on a local partner, there are high taxes, and things are not as clear.
Argentina is highly fragmented, and the offshore market has a significant presence alongside the regulated market. Chile is still pending.
Ecuador is also one to watch, and Paraguay is attracting a lot of attention. And then there’s Panama. We have a license there, but it is a small country with limited market impact.
So Panama and Paraguay can be interesting markets for us, while Mexico is already a market we have been working on. We were there last month for a show and had interest without necessarily needing a stand.
Latin American operators are now facing tighter margins, more competition, higher acquisition costs, and a regulatory environment that, as we’ve seen, can change quickly. How is this affecting the way operators evaluate technology partners?
We are seeing operators becoming more professionalized. They are not just looking at price or the cost of a technology provider, aggregator, or platform. They are looking more closely at the functionality behind it.
The more control they have over their operation, the better. They want to be able to configure their operation in detail, including how they want to set commercial margins with a particular provider.
Operators are looking for more than just a platform: CRM capabilities, customer loyalty tools, differentiated content, and the ability to create different promotions.
The details matter more than the price, although price is still important. But you don’t differentiate yourself on price alone.
Ultimately, an operator doesn’t have an unlimited marketing budget. You have to create small differences that make a player who is playing somewhere else come to you and stay with you. Of course, service and support are also important, but that has been a factor for many years.
At the product level, I think the market is becoming more professionalized in terms of the detail of what operators want from a platform. It’s no longer just about price.
What are your expectations from LatAm for the coming months? And what role will Zenith play in the region?
Zenith will have to adapt. Until now, we had been very focused on Brazil. We may end up focusing even more on Brazil if the market reopens, because we don’t know what is going to happen or when it will happen.
But obviously, Peru will now be a major focus. We are also looking at markets that don’t require an aggregator to have local certification, because they are easier to enter.
That strategy has already been applied to Mexico, where we are currently speaking with several clients.
Paraguay could be another market where we see opportunities. We already have some contacts there, but obviously we need to visit Paraguay and work more deeply there.
The Dominican Republic is also a market that personally interests me. The country is regulating and improving its framework, and new rules are being developed for online gaming. It is interesting to enter the market at that stage.
And then, obviously, we will continue working on Colombia, and we’ll see what happens with Chile. Chile is a market that seems like it is never quite ready. Ecuador is also a market with relatively easy entry for a provider.
So that is the focus: spreading our efforts across a broader range of countries rather than focusing so heavily on Brazil. We are looking at a wider mix of fully regulated and partially regulated markets.