Episode Transcript
[00:00:00] Speaker A: Foreign.
Hello everyone. Welcome to episode 11 of Right to the Source, a podcast from IGB and H2 Gambling Capital where we try and make data fun to go back to our original ethos of this podcast. And this week, as ever, I'm joined by the Robin to my Batman, Mr. Ed Birkin. How are you doing, Ed?
[00:00:34] Speaker B: I'm good, thank you, Robin. I'm good. And I was under the impression we're being joined by a guest, but as of two minutes ago when I reminded you, you hadn't sent them the link. So we may have a third person joining us. We may not, but look, I think so I've been thinking about this podcast and we need more structure. So we've got some segments and we did say yesterday, at the end of yesterday, at the end of the last week's meeting that we are going to talk about two countries, one of which we are is Niger.
Yes. And one of them is Peru. Yes.
[00:01:06] Speaker A: So let's start with Niger and Peru and then I think another interesting segment if we bring in start of the week. Okay, so from. Yep. So I want it to feel organic. You know, we're low fi, we're, we're indy, you know, we're naturalistic, we're the mumble core of podcasts.
[00:01:26] Speaker B: Before we start on the data, can I please just send out my congratulations and best wishes to two of your colleagues, Alexandra and Jamie, who got married on Friday.
[00:01:35] Speaker A: Massive congratulations to them. It's lovely news and they're great people. So it's really nice to hear. And I understand you're about to jet off in the direction of their, the Italian section segment of their celebrations.
[00:01:50] Speaker B: Well, you know, it's combined. Italy is a big gambling market, as you're well aware.
[00:01:55] Speaker A: So it's a work trip.
[00:01:56] Speaker B: It's purely for market research purposes.
[00:01:58] Speaker A: Excellent.
[00:01:58] Speaker B: If I get a chance to celebrate with them.
Yeah, absolutely.
[00:02:04] Speaker A: But yes, so yes, without any further ado, let's start with Niger. I mean, let's be honest. It's a market that'll be totally honest. It's a market that I don't know that much about. As far as I know. When we talked a few weeks back, we talked about the kind of, a lot of like how a lot of African markets were essentially kind of closed off through a monopoly format and understand that most forms of gambling as far as I know are, are under the control of the lottery. But I think there is one land based casino in the capital.
[00:02:40] Speaker B: Correct, Robin. So the only regulated forms of gambling are the lottery and a state run casino. The Lottery is called Lenani Lottery National Indonesia and we actually have some data on that. Well it's, we had some 2021 sales data and based on some tax revenue, etc. So we estimate the sales of. In fact you can guess, I'll even give you the, the local currency. So 2023 sale lottery sales of 35 billion West African franks. Take a guess of that in US dollars.
[00:03:10] Speaker A: A how many? Say that again.
[00:03:12] Speaker B: 35 billion West African.
[00:03:14] Speaker A: 35 billion West African francs in USD. I wouldn't dare.
[00:03:19] Speaker B: 58 million USD of sales, 25 million GGR. That's adult population of 13 million and a GDP of 22 billion US dollars.
That's all the stats that I have on Nigel.
[00:03:37] Speaker A: Well we've added new market to the roster. Some excellent data there. Now Peru obviously is something that we've covered. You know my colleague Kyle Goldsmith who handles the Latam region for us has been doing a lot on the market and it's an interesting one because obviously over the past few years all the focus was on Brazil and it was about the, you know, long and occasionally torturous and occasionally fraught process to get regulation through and active in Brazil. And in the background Peru essentially quietly, methodically worked its way through the process and launch the market. Now obviously there are the local brands, there's Upwest, the total run by Gonzalo Perez, you know, friend of, friend of IGB, friend of H2 and someone we should definitely get on as a guest.
[00:04:29] Speaker B: Yeah, I mean and if he agrees we could even send him the login details before the show starts. So that would.
[00:04:34] Speaker A: Oh, don't worry, don't worry, I'm, I'm on it, I'm on it.
[00:04:39] Speaker B: Shout out to Gonzalo. Yeah, friend of the show, not been on. But yes, future.
[00:04:42] Speaker A: Yeah, but you know, future well will be even more of a friend of the show.
Yeah, they're all friends. Strangers are just a friend of the shows.
[00:04:51] Speaker B: We haven't met yet disagree with that. But okay, you go cuddly.
[00:04:55] Speaker A: Yeah, yeah, be nice.
[00:04:58] Speaker B: Okay, let's, let's, let's stick to data.
[00:05:00] Speaker A: Yes. So Peru, it was all looking good. Obviously a place to tell bets and have a big presence. And then we had the 1% consumption tax. Now the locals essentially are very concerned about the impact of that on operations and the bleed to the illegal market because essentially it makes it less viable. It was one of these processes that looked really good, felt really good. And then at last minute start of this year they suddenly hit the industry with this additional tax burden which is.
[00:05:36] Speaker B: They'Ve done it to 0.3% until July. And I thought they'd proposed or I thought they passed it maybe not legislation, whether changing it to a GGR tax or have I completely made that up?
[00:05:45] Speaker A: I'm not sure actually.
[00:05:46] Speaker B: Well, if your guest comes on, we can find out. But that's probably something that even IGB would have written about. So you could do a quick look at your website and find out. But anyway, so what else there? Okay, so they've got the tax that mate, that is going to be the 1% tax is on turnover or deposits.
[00:06:03] Speaker A: I think it's turnover.
[00:06:04] Speaker B: Yeah. But look, the market's growing strongly, so I'll give. I'll give a day. So actually we had the tax data came in this morning or we found it this morning. This morning being Wednesday. This podcast probably going out quite a few days later, depending on how busy you are. Robin. Oh, 44.6 million pen proving soul.
Yeah.
Which is $12 million US dollars up 176% new one. That's because now they've only started. Including the tax for the online year to date round up 220 million SOL. 58 million US dollars up 115% this year. Our estimate of the onshore online betting and gaming market for Peru this year, 1.6 billion sols. So $423 million. We have it growing 42% year on year. The total online market, including the illegal at 2.32 billion sol. So $620 million. So 68% onshore. Obviously, if this 1% kicks in, because I think it was down at 0.3% and I was under the impression that it was changing to GGR tax that could change next year. And there is potentially lower channelization. But the onshore at the moment is still growing pretty strongly, or at least it had been up until June. The actual tax level in July was down on June. But again actually in June there was a very strong sports figure which obviously the sports versus the gaming sports GGR can fluctuate because of the hold margin depending on results. So it could just be dualized down a bit because is against particularly tough comps there. We don't know the split for igaming in sports. It's not for July, it's not reported. We should get our hands on any of that split. So it's still. It's been, in my view, it's been a success story. But as you say, this tax issue is something that could derail things a little bit.
[00:07:46] Speaker A: And then what about the Kind of competitive landscape is it like. So, I mean Betson is obviously an international company, but it built its presence through M and A. You know, people like Incabet acquiring that Upwest Total is always kind of a site as one of the top brands in the country.
What's so in terms of market share? I mean, do you see it as, you know, really kind of like the locals dominating or is there kind of evidence of the internationals kind of like carving out share?
[00:08:18] Speaker B: Yes, I mean if we look at, if we look at the annual data that we have, so we normally do annual market share 2024, we have aposta total at about 38% of the market, 10% tepuesto 10%. And if you add up Betson's three brands there, Betsen, Incabet, Betsafe, they've got about 26% of the market which has been coming down.
Previously they were much higher. So yeah, Betsun has a meaningful presence, but the top three are all kind of local operators and actually the largest of Betson's brands there is, at least in our data, Incubate, which again was a local brand they bought. Yeah, they're the main ones. We have actually just launched and I say just launched insofar as I've done it, but I'm not sure it's even on our website yet. It will be by the time this is out. We're running monthly market share. So this is less detailed. This is just a share of web traffic rather than looking into operators financials for a more detailed annual one. So if I'm looking in terms of traffic as I get this very well prepared, then we have. It was actually open. Let's have a look. So again, actually the big one, the big difference in this between what we estimated for 2024 and what we have now for 2025 is upwest total. Still the market leader has come down. The big mover is Batano Baton PE.
That's one which yeah, potentially was a bit higher in 2024 because they've now changed the PE from their.com site to. So maybe that wasn't totally included in it. But as we've seen in Brazil and other markets where they're really focusing on Apertano or are doing well and taking share. Yeah, then it's the same guys stake now in there and done it. I think there were 72 operators who got a license. You know, you compare it to. Someone said to me, I'm very surprised they look at Latam data. I'm very surprised that you're a Legal market or onshore channelization is lower in Colombia, which has been regulated for a long time, than it is than it is in Peru. And I was like, yeah, I get why you'd think that initially. And at first when I looked at it, I was like, oh, you gotta look at it from the flip side. Peru, there's 72 operators who are onshore, so, you know, contributing to the onshore revenues. In Colombia, there's 15. I mean, you are not with just 15 operators in the market. That just leaves a lot of large operators offshore. So you're going to get that.
[00:10:43] Speaker A: So just thinking about kind of proportionately to a market size, I mean, like, is there any kind of correlation between number of brands, size of population, you feel that kind of, you know, positively impacts channelization?
[00:10:56] Speaker B: Yeah, I think number of. I mean, you get to a certain level of brands and it doesn't really matter. I mean, if you've got 200 brands or you've got a thousand, you know, the tail is, is very long. I mean, you know, the uk, you know, you could probably take the bottom thousand brands and they generate, I don't know, square roots of very little. But if you have 10, 15, one operator, you're just not going to get high channelization. And that's, that's the issue thing we talked about in the, we talked about last week in New Zealand.
[00:11:22] Speaker A: Yeah, yeah, yeah.
[00:11:23] Speaker B: Where you know, you've got a monopoly operator with tab and for sports and you're restricting it to 12 or 15 online licenses, 50 for gaming. And you know, that's just a lot of operators still, still targeting the market from offshore. Yeah, I think, yeah, you do need a, a significant number of operators if you want to start getting higher levels of channelization. And you know, people like choice. But I actually. So I've clicked the random country generator to see what we're doing for next week.
[00:11:53] Speaker A: Oh no, wait a minute, wait a minute. Before we do that, we, we say we'd have a guest and you said, oh, you've not sent them the link. Well, here we have our special guest joining.
[00:12:06] Speaker C: Hello.
[00:12:06] Speaker A: So joining us on the podcast this week is Clarion's Latam liaison, one of my favorite colleagues to work with, Liliana Costa. Lily, welcome to right to the torrents.
[00:12:19] Speaker C: Glad to be here.
Thank you. Robinson.
[00:12:22] Speaker B: Nice to see you.
[00:12:23] Speaker C: Lily, thank you. Nice to see you too.
[00:12:25] Speaker B: Now, we were just talking about our random country generated before we get. And then we'll get on to the interview. So the first one came up was Turkmegistan. So I pressed Next. So Panama next week.
[00:12:36] Speaker A: Panama. Okay, let me write that down. We'll talk about Panama.
[00:12:41] Speaker B: Now, Lily, you work with the events team, don't you? Clarion Digital.
Yes. And that's the same team who believe that these two don't deserve a, you know, a keynote at Clarion Events. So I would like to reciprocate and inform you that this will not be a keynote for you. It will be a fireside chat. With limited time, you still have the.
[00:13:03] Speaker C: Right for a keynote. Maybe not a full track, but a keynote. We'll be glad.
[00:13:07] Speaker B: Okay, we've heard it here.
[00:13:08] Speaker A: Official H2 keynote ice I would argue against.
You're not quite there yet, Ed. You know, we just a bit more work, you know, a few more years and then. And then you'll get. You'll get in a position where we can give you a junior sub keynote.
[00:13:23] Speaker B: Okay.
Yeah.
[00:13:25] Speaker A: So you could speak standing next to the stage, but not on the stage.
[00:13:30] Speaker B: I like to be relaxed.
You missed the start of our podcast because of Robin's lack of organization, but we were questioning and putting on the spot here online tax in Peru. So there's the GGR tax and then there's the tax which is on, well, turnover or deposits. 1% ISC tax, which I was saying I believe was reduced to 0.3% until July. I thought that legislation had at least been proposed, if not passed, to turn that to scrap that and turn it to a GGR tax. Is that correct or is that made up in my head?
[00:14:07] Speaker C: No. So the 12% remains the GGR 12% tax. What is new is the 1% ISC tax, which is. That just came into place in first July, but it's all on GGR.
[00:14:19] Speaker A: So the. Okay, so the 1% is on top of the 12% of GGR.
[00:14:24] Speaker C: Yes.
[00:14:24] Speaker B: And that's 1% of what?
[00:14:26] Speaker C: There is a consumer consumption tax in Peru that companies pay the ic, which was not applied to gambling before. Now it does just.
Yeah, it's just a tax that was not applied before on gambling, but now it comes into force.
[00:14:46] Speaker A: Right.
[00:14:47] Speaker B: And is that going to impact the market?
[00:14:49] Speaker C: I don't think so. Personally, I don't think so. I think that 1%, eventually the industry was expecting to eventually happen. And besides, it's a recently opened regulated market. But Peru has a very stable market. It's very well regulated on land base and online.
So. And it was announced in the beginning, when official regulator at the beginning of the year. It was already expected because the regulator, Mincetour had made that sort of clear that they would expect to introduce this tax at some point. Listen, Peru is newly regulated and offers a fresh, fast growing market with not many legacy constraints than all the markets. So it's very stable. I have no concerns in the impact of the industry for that 1%.
[00:15:40] Speaker B: So I believe so. Yes, it was 1% of each wager and as you said, they now change it. They now change it to. It's confused. They're saying they've changed it now to GGR tax to align it. I'm just not sure what rate this is where our lack of preparation is probably showing in the podcast.
[00:15:58] Speaker A: Yeah, it's somewhat, I mean, well, this is your format, you know, we, we pick countries at random and then we see what happens. And, and I noticed last week we had Niger, we had Peru. This week we only have Panama. So what's your second market for next week?
[00:16:13] Speaker B: Random country then next random country. I mean, Saudi Arabia is not really a lot to say that.
[00:16:20] Speaker A: Yeah, I mean at this point Saudi Arabia is probably. Yeah, that's, that's probably years away.
[00:16:26] Speaker B: This is, this is not good for me. I'll have to do some research. Liechtenstein.
[00:16:30] Speaker A: Liechtenstein.
[00:16:32] Speaker B: Liechtenstein in Panama.
[00:16:33] Speaker A: Okay. Liechtenstein in Panama. Picking up the small markets.
[00:16:37] Speaker B: We've got a guest on, by the way. Robin. Lily. So you focus a lot on Brazil. There was a lot of excitement. Robin was whatsapping me while I was trying to have a nice, nice relaxed evening, getting all excited about this Senate discussion and potential votes on the upcoming land based casino yoga to be show bingo thing and it's all going to get launched. And I was like, Robin, things don't happen that quickly in Brazil. Brazil just, just pipe down. Anyway, the vote, I mean, this bizarre.
[00:17:05] Speaker A: Sort of fictionalized version of the conversation basically with the, with the vote being pursued.
[00:17:13] Speaker B: Hang on, hang on, hang on, hang on. Sorry, can we, can we let your Latin America liaison actually answer the question when someone who knows about it rather than.
[00:17:20] Speaker A: You see, I'm going to actually ask a more sensible version of the question rather than some long rambling story about how you were getting imaginary texts from me. Now, with that vote being postponed and considering how old that legislation is, do you see the supporters continuing with that omnibus approach for land based or do you see scope for kind of separate projects? You know, like for example, a dedicated land based one? A dedicated, you know, kind of like bingo hall one. Like do you see, do you see that process, like that bell kind of was. What was it, 1991 or something?
[00:17:58] Speaker C: Yes, can that 1991 and the original one, it's 25 years older than that, probably. It's just suffered so many changes. If we recall, the sports betting or the Igaming bill.
[00:18:12] Speaker A: Yeah.
[00:18:12] Speaker C: Came from this same bill which they separate. They removed sports betting in Igaming, just out of it and passed it independently. I think eventually that's what's going to happen or what it must happen to this bill for it to pass. I don't believe that a bill is going to be passed where it has casinos, Bingo and Joulto Bishu in one single proposition. So yes, I do see that eventually casinos will be separate from this bill and they will pass. And then Bingo and Joe de Biche will come on second and third place. Besides, I think we are on a stage of stabilizing the industry with the bets right now. And I was not expecting the bill to pass immediately. Still, there is still a lot of discussion with the new regulation and a new legislation now was not really. You can't go through logic in Brazil. Right? The logic in Brazil is illogical, but yes, definitely different. Casino bill.
[00:19:16] Speaker B: Lily, it surprises me from the outside that you say casino first, then yoga to bishop and Bingo. Because bingo halls were legal until what, about 20 years ago, 2008 maybe?
And so they were legal, they were popular. Is that not an easier thing to bring back first before you start talking about casinos and resort casinos?
[00:19:39] Speaker C: I don't think so. Because of the controversy. The social ideology and bit of culture as well impact that it has and the investment that the casinos would bring to Brazil are not the same that Jacques de Bichel or Bingo would bring. So there is a lot of interest from the Ministry of Tourism. For example, remember Bingo's casinos. They are planned to come into integrated resorts or tourist hubs. That's where the focus will be.
It's a bit. It has the casinos, has the building, it has the artists, it has the entertainment and everything else. So it is a lot of investment and I think Ministry of Tourism is very keen on getting that legalized asap.
[00:20:28] Speaker A: And then final question from me, because we are coming up on time with this process having effectively been kind of like beaten back by the lack of votes. Do you feel that could potentially, potentially have a knock on effect for the bets market in terms of kind of, you know, consolidating the opposing forces and legislature?
[00:20:50] Speaker C: No, no, I don't think so. I think it's two different subjects. The law is passed, the market has opened, the regulated market is opened. Yes, there is still a lot of controversy inside the Chamber of Deputies and Senate of wanting to kill completely the Industry. I think it's too late for that. It's too late for that. And Brazil needs the revenues because they are in a big hole. And that was one of the reasons they increased the tax for pets again in Brazil unexpectedly. But no, I don't think it's going to be related. It's two different topics. Now this bill will come back to the commissions in the Chamber of Deputies. More discussion and it starts all over again. All the process carry on discussions.
Remember when in December 2018 when the legalization of sports betting again happened. No one was expecting was just before recess at Christmas.
[00:21:42] Speaker A: And yeah, remember it's like 22nd December.
[00:21:46] Speaker C: And Senate in same afternoon which is. I never heard of that happening before. I think only in agricultural bill or something happened before. So it might happen the same with casinos when we less expected. Is it going to be soon? I don't think so. I think the market needs to settle first with what they have and then give another step forward. But it's Brazil, you never know.
[00:22:10] Speaker B: So Yoga de Biscio, the animal game is very widespread there, despite being technically not legal. Clearly for the operators there are some costs involved of operating a non legal game in certain payments to protect it. But on the flip side, if it becomes legal, having seen how much the taxes, active tax rate of now what about 51% in. In Brazil with all the other taxes, etc. Is this, is. Is this something you think the.
The Yoga de Bistro operators would actually want it to become legal? Because it's so in great. Like it's already such a big size anyway. My understanding is that in reality, is it not just going to just give them limited market growth and actually just huge cost growth because you know, they'll be viewed as you said, Brazil needs the money. It'll be viewed as a tax, you know, something to get taxed. Perhaps they don't want it legal.
[00:22:59] Speaker C: I think, I think bingo is more interested in being legalized than Jacques de Bicu de Bico. The operators, they have a good structure, they have technology, they have the trust. It's all about trust. In Jog de Bishu. They pay on time, they pay their employees on time. I don't see why they would be interested in being on the legal side. I shouldn't even say that, but in.
[00:23:21] Speaker B: My opinion this is a podcast where we, we ask the tough questions and we get the real answers. You don't scurry around it.
[00:23:26] Speaker C: For what I heard, actually I had a lot of bingo operators saying, yeah, I would like to be legalized and regulated I never had a Bishado saying I absolutely want legalization because they have a good operation. They are very progressive actually. They have a good structure, they have good technology. I don't see why.
[00:23:46] Speaker B: Thank you, Lenny. That's refreshing to have the answer. Now what. What Robin doesn know is that there's another segment that's come onto the show that we are introducing this week. The quick fire quiz. So come on. Quick, Quick fire quiz. Okay, Lily, I believe you've got some questions for us.
[00:24:01] Speaker C: Okay, I'm going to be very brief, Damien, very easy one for you. So Brazil online sports and igaming market. It's expected to reach this year. How much?
I. I did multiple questions. 50 billion, 150 billion or 66 billion K goes for it.
[00:24:19] Speaker A: I would imagine a the man who I think it says behind him the most trusted underlined data and intelligence on the global gaming industry.
I would hope that he would have a nice answer.
[00:24:33] Speaker B: Yeah, but I know the answer. It's a quiz that we're competing against each other. Robin.
[00:24:39] Speaker A: I always thought of this as more of a partnership. So I'd be looking to you to be able to share that data.
[00:24:44] Speaker B: Oh dear. You thought it was a partnership. The answer is $66 billion.
[00:24:50] Speaker C: Yes. Yes, that is correct. Okay, this one Robin probably knows this one. That is correct.
[00:24:56] Speaker A: I didn't even know we're competing. I thought this was just quizzing us and our and our knowledge to justify all the. All the trips out to Brazil this year.
[00:25:05] Speaker C: Because I also work for the event side this year at HB Live for the first time we had a group of Brazilian companies has a name that represents Brazil in the most relevant shows around the world.
[00:25:17] Speaker A: Brazilian.
[00:25:19] Speaker C: That is correct. And because I know that you're both learning Portuguese and doing very well, I must say what is the name of Brazilian regulator in Portuguese? I mean the institution, not the name of the person.
[00:25:31] Speaker A: O secretario dos premio si apostas.
[00:25:35] Speaker B: Very good, Robert. I'm your twice is this secretario is secretary.
[00:25:40] Speaker A: Don't quibble over.
[00:25:41] Speaker C: I'm not going to be too fussy about it. Secretariat.
[00:25:44] Speaker B: Are you allowed to get it wrong? Okay now that's fine.
[00:25:47] Speaker A: Not going to quibble over it. And.
And so our Lily, you are our third guest we've ever had in the podcast. So thank you very much for joining us and bringing some much needed order to the usual chaos as well as a bit of additional knowledge on Brazil on Peru. So thank you very much for joining us and to our audience as ever, thank you very much for listening to episode 11, double figures of Right to the Source.
[00:26:18] Speaker B: You may be our third guest, but I'd say you are our number one guest in terms of content. See that, Robin?
[00:26:23] Speaker C: That's very fun.
[00:26:24] Speaker B: Feel appreciated after you just didn't even bring them into the podcast until we started.
[00:26:29] Speaker C: Well, anytime you want to bring me over to make Latin America quiz, just let me know.
[00:26:35] Speaker A: Will do. All right, so I'll try. I'll try my outro again after Ed interrupted it.
So, everyone, thank you very much for listening to episode 11 of Right to the Source with Robin Harrison, Ed Birkin, and special guest Lily Anacosta. See you in the next one.
