At the SBC Summit Lisbon, a global gaming industry event that attracted over 25,000 delegates, 450 speakers, and 600 exhibitors, iGaming payments service provider OKTO made a strong impact by positioning itself as a key player in the Brazilian market, offering solutions that go beyond payments.
As the Brazilian gaming industry gears up for regulatory changes, OKTO has positioned itself to provide full financial support to operators, addressing key challenges such as fund migration, cash management, and tax optimization.
In an interview with Yogonet, OKTO’s Brazil Country Manager, Leonardo Chaves, delved into how the company is preparing for the new regulatory framework, the unique dynamics of the Brazilian market, and the comprehensive solutions the company offers to meet operators’ financial needs.
How was the show for you? Did it meet or exceed your expectations?
Yes, for sure. SBC is always a great place to connect with people in the industry. Everybody in the industry is here. For us, especially since we’re very focused on Brazil, it was great to see so many Brazilians here. Everyone is trying to understand what’s happening with the new regulation in Brazil, so it was an excellent time to be here, talking to people, and making new connections.
What were some of the main inquiries you received from attendees approaching your stand? What were they most interested in?
Most of the inquiries were about understanding how things will work in the new regulated market in Brazil. There are still some challenges and uncertainties for operators, such as how they will manage the migration of user funds from offshore operations to onshore operations. This is one of the key questions we’ve addressed by developing a frictionless solution to simplify the entire process for the user.
We’re focused on identifying and simplifying these challenges, including the management of proprietary funds and handling taxes in Brazil. People are trying to understand Brazil in general, and especially this industry, which is new for everybody in the country.
What are some of the major solutions that OKTO is presenting for the Brazilian market, and what opportunities do you see at a global event like SBC?
Well, we are a licensed Brazil, operating under the central bank’s regulations. While many know OKTO for its payment solutions, we aim to go beyond just payments. We understand that when operators enter the Brazilian market, they require full financial support.
Offering payment infrastructure, such as PIX, is only the first step. The real challenge comes once the funds are in the operators’ transaction or proprietary accounts, how will they manage their cash? Cash management is really important in Brazil. We have high interest rates and inflation in Brazil, so it’s crucial for financial teams to understand the market dynamics. Taxes are also high, but there are strategies operators can use to get the best results, including certain investments that offer tax benefits.
Our goal is to act as a financial advisor for operators entering the Brazilian market. With our platform, operators have access to Internet banking and treasury management systems, so they don’t have to worry about manually moving funds between transaction and proprietary accounts, we automate the entire process. We focus on understanding the challenges operators face and developing solutions to address them.
The idea is to provide more than just basic support. We want operators to feel confident that we can meet their financial needs. Whether it’s optimizing investments across different banks or providing credit for specific situations, including tax-related reasons, we offer a full financial solution.
How would you describe the Brazilian market, especially in comparison to other Latin American markets?
Brazil is a massive market with a huge population that has access to the internet and is very eager to entertain themselves—they love gaming, betting, and especially football. Their passion makes Brazil a huge market for our industry. In fact, for many operators, Brazil is now one of their biggest markets. With regulation coming into play, Brazil has done a great job of creating a balanced framework, learning from other countries that have already regulated the industry. In my view, they’ve taken the best elements from those markets and applied them effectively.
When we compare Brazil to other Latin American countries, some markets are already regulated, others are working toward regulation, and some have land-based industries that Brazil doesn’t have—or may not have yet. Brazil is unique, especially because of its tax structure, which is different from anywhere else. For instance, while certain tax models like VAT are common globally, Brazil’s corporate tax system is very different, and this creates specific challenges.
It’s essential to understand not just the tax system, but also the way regulations are written and interpreted. Sometimes, different legal experts offer varying opinions on the same regulations because of how they’re understood. That’s why it’s crucial to have people on the ground who understand the local market dynamics and can effectively communicate with stakeholders.
How closely are you following Brazil’s regulatory developments, and how prepared is OKTO to offer services under the new legal framework?
As a payment company in Europe, we are regulated by several central banks, and it’s no different in Brazil. When we talk about regulation, we’re already highly regulated, and now we’re looking forward to the regulation of the iGaming industry in Brazil. However, for our core business, we started the process of being regulated by the Central Bank of Brazil even before discussions around iGaming regulations began. We initiated this process when we first arrived in Brazil.
To speed things up and be fully prepared for this moment, we made a strategic decision to acquire a company in Brazil. This move wasn’t just about obtaining a license; it was also about having the right team and products in place. By acquiring a direct participant in the Brazilian banking system, we established ourselves as a bank.
As I mentioned before, our goal is to go beyond payments and offer a complete financial solution for our customers. This is not new for us, but there are specific demands in the iGaming industry. We always strive to anticipate upcoming regulations and ensure that we are technologically prepared to meet the needs of the market.
For instance, we’ve developed systems to support Know Your Customer (KYC) compliance and developed a solution to handle cash management, which we believe will be crucial for operators. We’re always thinking ahead, trying to anticipate potential issues before they arise. Our goal is to make the entire process seamless and offer advisory support to help operators navigate Brazil’s complex financial environment.
Original article: https://www.yogonet.com/international/noticias/2024/10/16/81559-okto-34at-sbc-most-inquiries-centered-on-how-the-new-regulated-market-in-brazil-will-work-34
