Until recently on the periphery of the global online gambling industry, Latin America has slowly become a strategically important region for operators and suppliers seeking out growth opportunities in newly regulating markets.
Based on legislative assumptions modelled with the Latin American Online Data Dashboard, VIXIO GamblingCompliance estimates that online gambling revenue in Latin America will reach US$2.6bn by 2025.
Following the lead of Colombia, Brazil, Chile, Panama and various provinces in Argentina are implementing regulatory regimes for online gambling products, with major European-based operators either pursuing licences or partnerships with local companies.
Our team of expert analysts have been monitoring the online gambling horizon across Latin America and have identified five key areas they are carefully watching:
Brazil: Concession Clarity
If Brazil is going to have its national sports betting market up and running in time for the 2022 World Cup, then H2 2021 appears to be a critical period to make progress in establishing a concession or licensing system. Two-plus years after the legislation was passed, specialist consultants are being hired to make recommendations on the regulatory model, upfront fees, selection criteria and potential legal amendments, ahead of a bid process to be steered by the national development bank. Notably, the Brazilian market received a boost in July through legal amendments that mean operators will no longer face a 3 percent turnover tax for online betting (6 percent for retail), but a blended tax based on turnover and gross revenue that should equate to an effective rate of around 18-20 percent of GGR.
Brazil: States Make Their Move
The slow progress toward implementing December 2018’s sports betting law has now opened the door for Brazil’s 26 states to introduce their own markets after the Federal Supreme Court last September ruled that states and municipalities were entitled to offer permitted lottery games, which now includes fixed-odds sports betting, within their borders. Populous Sao Paulo, Rio de Janeiro and Minas Gerais are among states wasting little time in capitalising on the opportunity, with Brazil’s future national licensees seemingly set to face at least some state-level competition. Key questions include whether states will issue one or more concessions to sports betting operators or merely seek partners to support lottery-run operations. Elsewhere, there is the legal question as to whether states must abide by the payout restrictions set by federal lottery law, meaning a 65 percent payout for instant iLottery games and effective tax of around 20 percent for online sports betting.
Argentina’s Messy Market
Just like US states for sports betting, Argentina’s provinces are trending in various different directions when it comes to regulating online gambling. According to research carried out by VIXIO GamblingCompliance, the 14 of 24 Argentine jurisdictions with legal online gambling are evenly split between those with government-run lottery monopolies, those that have authorised incumbent land-based casinos as exclusive operators, and those that have now established licensing regimes. Even in the latter case, provinces are on different pages when it comes to requiring international operators to have local partners or issuing a limited number of permits versus adopting an open licensing system. With any move to establish a Spain-style national system likely to be a politically challenging endeavour, the next critical step in Argentina’s development will be the launch of online gambling by leading international operators in the province and city of Buenos Aires that account for well over half the country in GDP terms.
Colombia: Battle Of The Brands
Four years on from the launch of regulated online gambling, the evolving Colombian market has recently attracted a trio of powerful new entrants in the shape of Entain’s bwin, Flutter’s Betfair and William Hill. Can the leading European operators capture meaningful market share, or will local heroes Betplay and Playtech-powered Wplay continue to dominate? Meanwhile, online casino is set to become more important in the heavily sports-centric Colombian market, in part due to the adoption of regulations in 2020 to permit live-dealer games.
Challenges In Chile
On its face, the Ministry of Finance’s January 2021 pledge to soon introduce legislation for online gambling makes Chile a leading candidate to be the next Latin American market to regulate. However, legislative efforts appear to face at least two formidable challenges.
First, there is a hostile dispute between most of Chile’s land-based casino operators and the government over a licence tender process that casinos claim is illegitimate because their licences should be automatically renewed. Then there is the fact that 2021 is an election year, with the presidency and congressional seats up for grabs in late November. The two challenges are also connected by the charges made by opposition politicians that incumbent President Sebastián Piñera has been a financial beneficiary of government policies designed to favour Santiago-listed casino operator Enjoy.
The VIXIO GamblingCompliance platform allows customers to access key analysis of the latest market-share data, regulatory developments, frameworks and much more across the Latin American region.
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