The province of Buenos Aires kicked off 2021 with the good news that seven international and national companies had been selected to operate in its online gambling market. As one of the companies selected with the Hotel Casino Tandil, Playtech has been able to carve out a niche in one of the continent’s most promising markets.
Francesco Rodano, CPO of Playtech, told SBC that obtaining a license in this market “is a historic moment for the company” as the province of Buenos Aires is the largest in Argentina and “the opening of its market has set an example not only to other provinces, some of which have been regulating their respective markets for two years, but also, possibly, to other countries in the region ”.
Currently, almost 90% of Playtech’s global revenues come from the regulated markets in which it operates. The province of Buenos Aires will be its third major regulated market in Latin America, after Mexico and Colombia, where the online gaming giant has already entered into strategic alliances with leading local operators, such as Caliente and Wplay, respectively. .
The potential of the Province of Buenos Aires is not only based on Argentines’ passion for sport – especially football – but also because of the number of people who live there. With more than 16 million inhabitants on approximately 300,000 square meters, it is 50% larger than countries like Belgium, Portugal or Sweden, and twice that of Switzerland or Denmark. All of these countries, which benefit from developed regulatory frameworks, represent important markets for Playtech.
“Here we are fortunate to work in joint ventures, with our local partner, Hotel Casino Tandil, and as a game supplier to the other 6 licensees,” added Rodano.
So what does it represent in terms of business impact, opportunities and business potential? According to the company’s CPO, the license in the province opens up very promising business opportunities, also thanks to the sensible regulations implemented by the Provincial Institute of Lotteries and Casinos (IPLyC), which will pave the way for further development. healthy and sustainable in the market.
To participate in the licensing process, IPLyC asked international companies to submit their proposals with a local partner. The decision to choose the Casino Tandil hotel was based on the fact that the Argentine company knows the local retail casino industry and has a loyal following.
“At the Hotel Casino Tandil, we found people who were really passionate about the new opportunity offered by the market launch. We have 22 years of experience running online gaming businesses and have developed the world’s leading gaming platform, featuring cutting edge KYC, AML, CRM, payments and responsible gaming tools. . By combining the respective strengths and strengths, we found a perfect match, ”explained Rodano.
Although he announced the selected companies on the last day of December 2020, the local regulator has yet to say when the market will be operational. As for Playtech’s estimates of the launch and whether it’s ready to start operating once the light goes green, its size and relevance means it is prepared to depend on its own schedules.
Playtech works in over 30 regulated jurisdictions around the world, so she has the experience and knowledge of the complexities that regulators face when working on launching a new market.
“We expect that the green light will be given in the coming months, but we respect the work of the IPLyC and are ready to adapt to the timetable they set,” he said.
The project was approved in 2018 and, beyond the fact that there are great expectations for its opening, “a possible delay in a jurisdiction will not mean that we will sit idly by,” said Rodano, who believes that “at this point it is irrelevant if the process takes a few more weeks”.
“At the same time, the continued postponements of the launch, as for example happening in Brazil, also delay when the government can begin to reap the benefits of the regulation,” he commented.
While Playtech patiently awaits the debut of the online marketplace in Argentina’s largest jurisdiction, it is also aware that the goal is to become one of the market leaders. In order to achieve this goal, the plan is to expand to neighboring regulatory provinces, such as the city of Buenos Aires. Thus, the company will set a benchmark not only in terms of the quality and attractiveness of the offer, but also in the way we protect vulnerable players and promote responsible gaming.
“We now have the technology and the experience to identify and limit the possible harm associated with online gambling. For us, this is a global commitment, regardless of the territory in which we operate, ”said the CPO.
Rodano also admits that they do not yet fully know the profile of Buenos Aires players, since it is a new market, but they have the confidence that they can build “the best possible offer for them, also thanks to the experience of Hotel Casino Tandil ”.
“Again, our direct experience in dozens of jurisdictions and our advanced system which can be adapted for the learning process and player analysis allows us to adapt quickly to any local reality.”
On the other hand, industry leaders are those who recognize that Latin America should not be seen as a market, but as a region with multiple jurisdictions, all different from each other. “In reality, it is a continent with enormous cultural, historical and economic differences from one country to another, and even from one province to another,” he explained.
“Our experiences in Mexico, Colombia and the recent structured agreements in Guatemala, Costa Rica and Panama show how we are able to build successful business ventures in the region. “
In addition, Playtech expects that after the market launch in the province, other provinces and other countries in Latin America will follow suit in the months and years to come.
“We are continually starting or expanding operations in many parts of Latin America. We are ready to further expand our presence to develop new business opportunities, ”said Rodano.
This objective can be achieved with the help of local partners and by studies of economic and social indicators of the target market. Using the technological capabilities of Playtech’s IMS, including AI and powerful model algorithm analysis, the online gaming giant segments databases and adjusts offerings in real time.
“Being able to adapt quickly from the start of a new business is essential. This is our strongest asset, and our streak of success in new markets speaks for itself, ”commented Rodano.
The challenges to gain a larger market share
Latin American countries are characterized by a particular interest in land offers. But what are the biggest challenges in gaining a larger share of a market that is not the favorite of local players?
For Playtech, the interest in land-based games is not in itself an obstacle to the healthy development of the online games offer. As an example, Rodano named Italy, where more than half of gaming revenue, just before the lockdown, was generated by retail gaming machines.
“Here, over time, the GGR for regulated online gambling has grown from zero to over 1.5 billion euros. This spectacular growth was almost exclusively driven by the increase in the pipeline rate, and did not affect the retail machinery business at all, the revenues of which continued to grow, albeit at a much faster pace. slower, ”he said.
According to Rodano, the last 10 years have shown that both in Italy and in other markets there does not appear to be any overlap between these segments and, therefore, a risk of cannibalization between online and retail gaming machines. , despite the concerns of retail operators.
“Because there are two distinct targets, the challenge is to be able to intercept and retain the correct one, which is indeed our strong point,” he said.
Strict post-containment activity
As expected, the closure of retail stores did not translate into massive growth in online activity, which, again, could be explained by the separation of targets, explained Rodano.
Faced with a moderate increase in spending on online casino games, verticals with a substantial increase in demand have been characterized by a much higher socialization component, such as bingo and poker, according to the CPO.
“Blockages very often resulted in less chances of meeting other people and more time to spend at home, which is probably the reason for the success of games in which players could interact and chat with each other, without needing to be there. ‘extra adrenaline that slot machines can provide,’ he explained.
At the same time, many jurisdictions around the world, including some Argentinian provinces, have started to discuss possible regulation of online gaming, with the aim of recovering the loss of revenue caused by the lockdowns and, in some cases, to create new income opportunities for those most affected. retail operators, “setting off a medium to long term process that is likely to benefit governments, industry and stakeholders”.
The potential of the Province
Although the Province of Buenos Aires is one of the largest jurisdictions – and therefore markets – in Latin America, when it comes to running a continent, competition between territories does not matter, mainly because of the differences between them.
“In my opinion, the real competition that every jurisdiction faces is against illegal or unregulated operations. A regulatory framework is effective when it manages to “move” the majority of offshore players to onshore (from .com to point of service), where they are better protected and generate income for local government ”, Rodano explained.
Colombia is generally mentioned by the biggest companies in the industry, and Playtech has explained its success due to its sensible rules and continuous improvement of regulations to keep pace with changing market conditions.
“It is likely that Buenos Aires lawmakers took the Colombian experience into account when working in their new setting, laying the groundwork for what appears to have the potential to be a thriving market. “
To conclude, he referred to the Brazilian law which, on the other hand, has suffered continuous delays, has a gambling tax model that is not ideal and, above all, does not provide for the regulation of the online casino, which is massively popular and whose demand could not be met on land.
“Even the framework for the Province of Buenos Aires, like any new framework in the world, might need to be adjusted over time. For example, it is not clear whether local online poker players will be allowed to compete against players from other jurisdictions, which is a key feature in making regulated poker successful. But this, like other aspects, can indeed be resolved in the future, ”he concluded.