The FIFA World Cup 2018 from Russia offers Latin American sport books the opportunity to generate new revenue, gain customers and build brand loyalty. But it also carries risks the books will over extend themselves if the soccer matches with heavy action don’t go their way.
Operations could even be shuttered.
That was the message Juegos Miami during a discussion on the impact of World Cup on land-based casinos and online gaming.
It featured Juan Andres Carreno, president of Asojuegos, the Colombian Association of Gaming Operators and Alfonso Jibaja, head of business development in Latin America for Betgenius, a sportsbook manager. It was moderated by Luiz Felipe Maia, founding partner with FYMSA Advogados Brazil. It was translated from Spanish.
“This event is extremely important and comes at a time which is key for the industry that’s growing,” Jibaja said. “The World Cup will promote the different sectors in the industry from service providers to betting houses. There’s a lot to do and not only opportunities but challenges, but we have to take advantage of this opportunity.”
Gambling operators in Colombia have been working together in preparation for the World Cup, including the expansion of bet offerings to customers. Investments by betting houses in technology is one of the steps taken to offset the risk.
Carreno said the European soccer championships in 2016 served as a learning experience. The concern is always the financial risk.
Some of the operators can be in very bad shape because they don’t have the technology support or did not meet the requirements for the operation,” Carreno said.
When there’s more action on one side, higher quotas need must be set and wagers need to be limited and laid off, the panelists said.
Carreno cited a friendly match in France in March between France and Colombia. France, the underdog, lost only once in their last 20 matches on home soil.
France jumped out to a 2-0 lead by the 26th minute mark and was up 2-1 at halftime. Colombia scored twice in the second half, including a penalty kick in the 85th minute to win 3-2.
“France was the favorite and Colombia upset them in the last minute and all the betting houses lost because they did not anticipate what would happen,” Carreno said. “They saw France as superior. In light of Colombia’s involvement in the World Cup, we can see how to moderate the risk. All companies are self-funded and have to determine how much exposure they are going to take.”
Panelists said there has been consolidation in the Latin American betting market that has allowed new brands to enter the market and existing brands to grow as well. The World Cup creates opportunity that opportunity also increases their risk factor.
They mentioned, however, that the international companies that work in the region have the experience to help mitigate risks and show how it can be done.
What helps, Carreno said, is that it’s not easy to be eligible to get a license in Colombia because it takes major capital to venture into gaming.
“I think with the World Cup event … we are all learning what can happen, and regulators have to consider implementing new regulations or force controls and consider the exposure that impacts the player,” Carreno said. “The Colombian regulation system has been making risks lower, but we’re still learning. We will see what happens in the World Cup.”
As for World Cup future bets, Carreno said if the favorites – Germany, France and Brazil – win, the betting houses won’t too exposed. There’s always concern when a team with high odds has taken large wagers and that team wins.
With Colombia now regulating online betting, that will create more opportunities for the nation’s betting houses. Web pages of international betting firms have been blocked if they aren’t authorized to operate in Colombia and pay taxes. It’s important for Latin American countries to do the same and protect their businesses that generate jobs and the country’s tax revenue, he said.
The panelists also discussed World Cup integrity. The biggest concern surrounded a team that’s already eliminated from advancing in its four-team pod by the time it plays its third and final match.
The discussion centered on betting houses working with soccer federations to address the potential of match fixing, which they said was more of a threat at lower levels of competition.
Carreno said concerns had been raised in a second division match in Colombia. Betting houses closed wagering and reported that concern. Spain has taken steps and more federations and FIFA need to address the issue, he said.
Jibaja said it’s also important to work with players on education to show then the risk they are taking with their career.
