New rules stall Digiplus in Brazil

Online gaming firm Digiplus Interactive Corp.'s surprise move to halt its three-week-old operations in Brazil has been traced to new restrictions on the industry, similar to those imposed in the Philippines, that will limit its ability to entice players away from its competitors.

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"There are some concerns in the Brazilian gaming market that may be forcing PLUS to postpone its ramp-up in its marketing activities in Brazil," said Abacus Securities Corp.

It noted that, "Concerns include a potential increased tax rate and ad restrictions that would be challenging for new players like PLUS, who operated at a much later date compared to its peers."

Abacus explained that, an immediate increase in ad spending will be a key driver for Digiplus' venture in Brazil but, with the recent pushback in the gaming segment, "it may be logical for PLUS to wait things out in Brazil."