Outlook 2021: Americas

2021 will kick off with North and Latin America’s gaming industries hoping to avert further coronavirus-enforced shutdowns of land-based facilities while maintaining compliance with previously unthinkable operating restrictions.

At the same time, the widely anticipated spread of regulated online gambling across the Americas will be in sharp focus. An eagerness to regulate was already apparent but has been accelerated since the pandemic by a growing enthusiasm from land-based operators to diversify and a need for governments to tap new sources of tax revenue.

While the rapidly expanding US sports betting market will again capture the limelight, 2021 should also be the year that major markets in Canada and Latin America make their moves.

US Market Expansion

Early in 2021, sports betting will be available in 22 states – 15 with mobile – as Michigan and Virginia follow Tennessee in launching operations.

Maryland, Louisiana and South Dakota should follow soon enough, after voters in all three states approved referendums in November, with legislative discussions also ripening through the final months of 2020 in the major markets of Massachusetts and Ohio.

Still, passing bills will remain fraught with lobbying complexities, as states grapple with key policy questions on college sports, the number of licenses or “skins” that should be available and, in the case of mobile betting in New York or Georgia, core constitutional issues.

This rapid expansion will also underscore two conflicting policy trends that make the US market every bit as complex in terms of regulation as it is lucrative in terms of business.

Various sportsbook operators, especially newer entrants, will confront the reality that skins are more limited in most states beyond Colorado and New Jersey, and even major brands face a serious lobbying challenge to be able to expand on a truly national scale. That challenge is even more obvious in states like Florida, where tribal gaming interests control the agenda.

Meanwhile, those operators that do enjoy broad market-access will be tested to rapidly scale their businesses across multiple states where regulations differ dramatically.

To date, states have adopted divergent policies not only on big-picture issues like tax, licence fees and online wagering but everything from permitted data sources, branding restrictions and the specifics types of bets operators may offer on which sports.

With federal legislation likely to remain far in the distance, expect anywhere from six to 14 more states to weave their own fabric into the patchwork quilt of the US sports betting market in 2021, as sports wagering becomes just one form of gambling expansion made more tempting by depleted state tax coffers.

Elsewhere, casino expansion could be considered in long-term holdouts Georgia and Texas, while Pennsylvania, Missouri, Virginia and others will be lobbied to regulate gaming machines in bars, as bar- and restaurant-owners lobby for new revenue streams to help them remain in business.

Arguably the segment to watch, however, is internet gaming.

Online casino gambling has been much slower to expand across the US than sports betting, with only five states regulating online casinos since 2012. Still, the conventional wisdom is that state lawmakers will warm up to the issue in 2021, helped by their regulators’ comfort with online sports betting and the booming markets of New Jersey and Pennsylvania demonstrating the potential tax revenue on offer.

Look for Indiana, Illinois and Iowa to be among states to test this theory, with Wall Street watching on to see whether online sportsbook brands locked in fierce battles to grab market-share can gain a fast-track to profitability by cross-selling their expensively acquired players to casino games. 

Canada and Latin America

US states won’t be the only major markets in the Americas to open in 2021.

Ontario should also show its hand on internet gaming, having adopted legislation in December to cement its plans to replace its lottery-run online casino monopoly with a competitive market.

While specific details remain to be seen, the province’s population will be enough to attract significant international interest, especially given the prospect of a separate move by Canada’s federal government to allow single-event sports betting.

In Latin America, Panama and both the province and city of Buenos Aires in Argentina are set to join Colombia as regulated online gambling markets and may have issued their first licences by early 2021.

But there’s little doubt the spotlight will be falling squarely on Brazil.

2020 closed with the country’s main public bank working with consultants to establish the terms of a concession process for retail and online sports betting, in order to finally implement a now two-year-old law.

Betting companies around the world will be awaiting clarity on the number of concessions available, fees, qualification criteria and regulatory requirements before a process is held potentially in the latter months of 2021.

Many will also hope industry consultations convince the Brazilian government to revisit the tax provisions of its 2018 law and lower an effective rate of 3 percent of online turnover.

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