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Stoyan Todorov May 18, 2021 16 min read
Latin America and Live Casino Market: A Piecemeal Approach or a Holistic Outlook?
Latin America is still a fairly untapped market when it comes to iGaming. In many ways, though, things are improving with jurisdictions passing laws and arguing a stronger case for the benefits of online gaming. Stakeholders naturally have a say in what happens with the industry and how the regulated markets shape up.
One particularly interesting aspect of this push for more clarity is how live casino products will be integrated into mainstream gaming. Most LatAm consumers are not quite familiar with the concept, but the quick legalization of new markets could give them immediate access to excellent live dealer products.
Even better, this may prompt stakeholders and developers to create tailored products that are a perfect match for the needs of the region. Live casino games are already no niche product, developed by numerous companies who bring their own unique set of insight and expertise.
This is precisely what Latin America needs to spur innovation and this is precisely why we have reached out to four of the leading companies that develop a live casino gaming product today. We explore the market’s various challenges and opportunities in the company of Swintt COO David Mann, Authentic Gaming CCO Magdelena Podhorska and Ezugi LatAm territory manager Eric Mendez.
Q: What determines the success of a live casino product in a new market? Is it a cultural understanding of those markets or a blanket approach to all?
David Mann: As with the launch of any new product, market specific demands must be understood and addressed. In the case of live casino into the Latin American market, players will expect quick, easy to play and relatable products that offer the same seamless experience regardless of where they play or on which device.
Certain games also have to be considered for individual markets to offer a localized experience – be it a unique game variant or full product line that resonates with a certain audience and is proven to deliver value for operators.
Magdelena Podhorska: It is definitely the former. Products must always be adapted once the culture and societal trends are understood. Certain aspects of a live casino environment could be offensive, or colors used could have a specific connotation within the culture, hence good R&D needs be performed before going into key LatAm markets.
When it comes to other elements such as game mechanics, camera angles, etc. there are certain features that just work across the board for true roulette players and those elements you do not mess with.
In terms of the different live casino verticals, in some cultures double zero roulette is more popular, like in Mexico, so you do not want to push single zero roulette in that market. Alternatively, in some markets side bets on blackjack are sought after but in others they are not. All of this needs to be considered if operators are to hit the ground running and get things right from the start.
Erick Mendez: A blanket approach to entering new markets won’t work. Localisation and a cultural understanding of any new market is key. Everything we do is about providing the most entertaining experience for players, therefore considerations such as language and player behaviour play a huge part of keeping players engaged. Spending time researching each market and tailoring games around those players play an essential part of any company’s longevity and success within any given market.
A “one size fits all” approach is simply not going to reap the same rewards. An in-depth understanding of the market, being able to communicate and knowing what the player wants is critical.
Q: Do you find the “piecemeal” approach to regulation challenging or are you prepared to adapt to specific regulatory market needs in each country and, as is the case of Argentina, province?
David Mann: Meeting the conditions of every regulated market as the industry begins to mature is not a simple process and does have challenges but hopefully regulators will look at demands in other jurisdictions that suit their own requirements, leading to ‘crossovers’ that will facilitate more straightforward processes.
We will always endeavor to deliver our product into more regulated markets and offer safe and fair products to more players looking for a top-class, seamless live dealer experience.
Magdelena Podhorska: Unfortunately, the “piecemeal” approach to regulation is something the industry has learned to live with. In most cases, regulators do not really talk to each other and a global technical standard for gaming products remains a pipe dream that we long for but is not on the cards at all for now.
Regulations are a result of a country’s culture and areas where regulators feel their society is most vulnerable. They reflect that country’s emphasized points, hence why they will never be the same worldwide. What we must do is build agile products and platforms that can adapt to all markets quickly.
Some standards are the same across all markets, such as safes, locking critical components, using a change management program to maintain compliance.
That being said, we need to remain flexible on the technical side and adjust quickly to any regulation that comes our way; this is really the only way to be prepared to tackle regulated markets and meet the standards being set in each.
Eric Mendez: We are prepared to adapt to the requirements of each regulation, we understand that each country must follow the regulatory framework that best suits local needs in terms of safety, operability and service, we are always willing to collaborate with regulators and share our experience as well as the processes to ensure the integrity of the games
Q: What determines who the right market partner is? How do you find partners locally who are prepared to take your products live?
David Mann: It would be reckless to enter a new market and undergo the cost and efforts of meeting regulatory requirements without understanding the operators, revenues and opportunities on offer – and at Swintt we believe having core partners lined up ahead of any new market launch is a key to success.
A solid understanding of the marketplace is essential. As a part of our market entry strategy, we look for both international operators who tend to have a multi-jurisdictional approach but also local operators who focus only on that specific market.
We feel both operator types provide a different player experience which allows us to get different feedback perspectives whilst perfecting a product specific to each individual market. In both cases, it is key that our partners offer localized quality support, payment options and content for each specific market. These are key criteria when looking at each market.
Magdelena Podhorska: To make a market entry worthwhile and yield the strongest ROI, partner selection is key. Usually, the best approach is to gauge market share per license holder through any means possible. If the market is being regulated for the very first time, then looking at ACQ capabilities, existing databases, media partnerships and most importantly knowhow to running an online casino business.
This is why international giants tend to do well in new markets; they have the knowhow and large marketing budgets required to succeed. However, you have other markets such as Colombia where we’ve seen the reverse as partnerships with local payment providers is key as are retail locations. This is something the international giants could not compete with easily and is why the strongest companies are local license holders.
This has led giants such as Betsson, William Hill, and Flutter Entertainment to acquire established license holders rather than seeking their own license and doing the legwork from scratch.
Eric Mendez: Working with the right local partners is critical to success. Reputation, market knowledge are some important factors in the search for strategic partners.
Q: How long do you think it would take consumers to explore and adopt live casino products over brick-and-mortar counterparts in LatAm? Is there an inherent benefit for the region in this happening?
David Mann: Consumers are already adopting live casino products in LatAm. In 2019 H2GC data indicates that just 4.5% of online casino gambling gross win was from live dealer. However, this estimate raises to 11% in 2021 totaling over $57m gross win per annum and continuing in market share to over 25% by 2025.
Covid-19 has further accelerated the shift from land-based gaming to the online sector that was an inevitability, and with constant advancements in technologies, connectivity and internet speed across Latin American countries the live casino experience becomes even more prominent.
This shift will benefit players in terms of having the more tailored and varied gaming experience that online casinos offer, and operators (and thus suppliers) by having a wider, growing player base to engage. As further markets regulate, this could be a key income driver for many countries in LatAm, as live dealer products continue to become more mainstream.
Magdelena Podhorska: I don’t think it will ever come to that, it’s been proven time and time again that players that go to brick-and-mortar casinos are not the same players that play online. I think the question is more how do you develop an appetite to play live casino from a player base that already bets online or would have a tendency to dabble with online casino, and then stimulate their interest to live casino using cross sell.
This is why securing a partnership with an operator that has a player database and/or the right strategy to approach and onboard players is key.
And yes, there is a benefit for regulating and having a robust online offer in addition to land-based gaming. The countries that do can ensure they have the market fully covered and both online and land-based players can remain protected and enjoy gaming safely and moderately in a sustainable manner whether at home, on the go or inside a land-based casino.
Eric Mendez: The Live Casino is a product that works in harmony with other market segments, in many cases it serves to attract new players who, after getting to know the Live Casino, migrate to slot games in the same way that when players seek greater interaction they turn to the Live Casino. Also, the Live Casino works as a brand extension for the land-based casinos.
Q: Do you think regional consumer preferences will dictate the pace and direction of development? How successful can traditional live dealer games be in LatAm? Is there an inherent demand for casino classics anyway?
David Mann: As stipulated above, there is a market for classic casino games across all jurisdictions, even those more mature in their online play than Latin American markets, so we offer the very best versions of those classic games with top modern functionalities and features. Players will see and enjoy the difference in a superior overall product.
Magdelena Podhorska: The player is always King, so yes, providers and operators have to make an offering for the player first and foremost. Traditional live dealer games will always have a home in a country where there is a certain level of gambling as a form of entertainment engrained in the culture. This is definitely the case in LatAm.
In most countries there are several casinos and gaming halls. This means table games will not be new to players in most regions, but they will have to learn to consume them through a different channel (online).
Furthermore, as the online channel generally caters to a younger demographic than brick-and-mortar, new formats such as game shows may also prove to be highly successful at stimulating interest and acquiring new players into the classic vertical through a more entertaining new variant of a traditional casino game they may not have seen before.
Eric Mendez: Consumers are the ones who dictate the success of a product, we must have the ability to listen to the requirements and point in the right direction. The traditional content of Live Dealer is a classic par excellence and will always be part of the selection of the players; however, there is always the possibility of adding additional options that give it a special flavor for the new generations
Q: Regulatory idiosyncrasies alone, do you see other difficulties to breaking ground in the LatAm live casino market?
David Mann: Making sure local tastes and demands are catered for will take time but has to be considered for making inroads into Latin American markets. Treating the demands of Europe as a whole market would never work, so the many intricacies of the Latin American countries have to also factor into any market entries.
Magdelena Podhorsk: Yes, there is always the challenge of localization that will be key to truly breaking through individual LatAm markets. Products should be tailored specifically to each country.
However, considering that revenues in some countries may be smaller than in others, a provider may not want to go through the expense of localizing for every single LatAm market.
For example, a provider may choose to offer the UI in ‘Spanish International’ but things can get entirely lost in translation when speaking about betting terminology in the different LatAm countries. Terms need to be translated for each market, otherwise it can offend players and the maximum potential of market entry will be lost.
Eric Mendez: In order to succeed, it’s important that we are able to adapt to market demand at all levels. This includes being flexible and open to working with local regulators and operators to adjust the strategy to meet market requirements. We pride ourselves on offering world class games that are localized to specific markets we operate in therefore our offer within LatAm is focused on the requirements of the region with specially created, localised content.
Q: Are there specific markets that are a priority for you right now over others or do you seek an entry in all regulated LatAm jurisdictions at the same time?
David Mann: Our focus is to meet the needs of our existing and new clients. Demand for our products is currently driven by operators focused on the most populous countries. With that said, we are following demand as markets regulate.
Magdelena Podhorska: It’s important to be as close to ‘first to market’ as possible, as this is how appetite and trust is established from the players’ side towards your product. Currently the markets of priority have regulation bubbling away; for Authentic Gaming that would be Colombia which regulated casino just under a year ago, Argentina and Mexico.
We are monitoring other markets and in many regulators are accepting certifications from other markets and/or tolerate companies approaching the market with a dot.com license. We always try to tackle markets simultaneously to the extent that is possible when it comes to certification and other third-party market entry expenses.
Eric Mendez: We are definitely working on having a presence in all the regulated markets in the region, however, the way in which the regulatory processes are progressing allow us to work on a fragmented and gradual advance as the regulatory processes mature in each country.
Q: Do you think there is room for all of your quality products in the market or over-saturation could prove another challenge?
David Mann: The abundance of content in the market is driving suppliers to look for ways to differentiate, innovate and stand out, so the challenge is already set. We’re building our product suite through years of experience and provide something that operators – and ultimately players – will be able to see the value in. That is what will set us apart and ensure our products will end up front and centre.
We see that demand for our mobile optimized live dealer product is growing across LatAm, in line with the growth of usage of mobile devices for gambling as a whole. No other live provider has really focused on this aspect.
Magdelena Podhorska: Sometimes going from zero to abundance may be overwhelming for a market and the consumer so it is important to pace a roll out properly so that players can try everything one by one and see where they land in terms of preference.
This is more the job of the operator; as a supplier, you need to ensure that from a product perspective you cover all demographics and player wants and needs. Usually for that, the more extensive the offer the better, but the roll out needs to be done in a calculated manner and at all times educate players as to how to engage with the content with tutorials and good support from the customer service department.
Eric Mendez: We know that some of our products are focused on other regions, however, due to its intuitive and informative interface as well as the cultural breadth that exists in Latin America, it opens a door for our complete catalog to be successful.
Q: Where are your efforts in the LatAm region focused right now?
David Mann: We have made in-roads across many markets and building our player base gradually, and we have an eye on the ongoing regulations coming into place across the region. Colombia set an early bar as a well-regulated market and we’re taking steps to grow our regulated market entries.
Magdelena Podhorska: That would be Colombia, Mexico, Peru and we are also keeping close tabs on Argentina and Brazil.
Eric Mendez: We are currently focused on Colombia, a market with greater maturity and that recently expanded the offer by adding Live Dealer among others to the current regulation, Argentina LOTBA and closely observing what happens in other jurisdictions, like Puerto Rico and Chile.
Q: What are your goals in relation to launching live casino products in LatAm in 2021?
David Mann: Between our existing and upcoming partners already live in the Latin American region we will have a growing rollout of SwinttLive over the next few months and we aim to ramp up the product recognition in the region. Having our games delivered straight from the heart of casino, Las Vegas, and optimized for mobile, adds a layer of authenticity and prestige for players that other products cannot replicate.
Magdelena Podhorska: We will be launching six Spanish speaking tables for the market within the next few months. We are looking forward to the uptake across the LatAm regions we are currently targeting and/or penetrating already.
Eric Mendez: Our goals are to strengthen our presence especially in regulated markets. To Increase the supply of Spanish-speaking tables for the Latin American market and ultimately to position Ezugi as a leading Live Dealer company in LatAm.