Part I looks at Brazil and Argentina as Buenos Aires province advances licensing process
Emerging markets are still dominating the iGaming conversation in 2021, and the Latin American market is home to multiple new opportunities. Keep reading for an overview of regulations and revenues from Mexico to Brazil and get an idea of the region’s tremendous potential, and leading iGaming industry software and business solution providers for online casino and sportsbook operators, is updating its take on the region.
Latin America is a land of promise for the iGaming industry. Markets that have already chosen to regulate online casinos and sportsbooks are seeing stable growth in the sector, and countries with favourable regulations on the horizon are anticipating astonishing levels of growth in the near future.
The regulatory status of online gambling varies across the continent. Some countries, such as Ecuador and Brazil, currently prohibit all forms of gambling — with an understanding that online gambling is included — except for state lotteries. In other countries, while it is not officially regulated, it is not actively prohibited either.
Bolivia and Nicaragua, cover online gambling in their overall regulatory framework for the gambling industry as a whole. In Argentina, online gambling is regulated on a province-by-province basis.
Bolivia, Mexico, and Brazil are all among the nations considering or actively pursuing reforms to their online gambling laws. The latter two countries currently have proposed legislation under consideration. Colombia, meanwhile, has been updating its regulatory framework to better embrace the digital age.
Brazil is often called the sleeping giant of Latin America, but several other markets present iGaming operators with opportunities worth serious consideration. Slotegrator presented a country-by-country rundown of the South American online gambling market, with an update on Argentina and Brazil.
Argentina
With a population of nearly 45 million, Argentina is Latin America’s fourth-largest country and second-biggest economy. Gambling is regulated on a province-by-province basis, with operators only allowed to offer their services to residents of their province. In those that choose to regulate, operators are allowed to offer virtually all forms of gambling.
The country’s online gaming and betting sector is estimated to generate US$2.4 billion in annual revenues. In an effort to bounce back from the crisis of 2020, the government recently announced that the federal tax on online gambling would increase from 2% to 5%. This is separate from provincial and city taxes; the province of Buenos Aires taxes operators 25% of their gross gaming revenue. In the city of Buenos Aires, the tax is 10% on GGR.
The country also regulates gambling advertising. Advertisements may not feature or target minors and may not be deceitful or misleading. Only authorized operators may advertise their services in the country.
The IPLyC — the regulatory authority for the province of Buenos Aires — began 2021 by launching its licensing regime with a series of partnerships between domestic companies and foreign operators such as William Hill, Bet365, and 888 Holdings. Other provincial regulatory authorities are also licensing online casinos and sports betting.
Brazil
Brazil, Latin America’s largest and most populous country, is often referred to as a sleeping giant — one that’s long overdue to wake up. At the moment, most forms of gambling are prohibited, but a special commission was formed in 2016 to develop regulations for the sports betting sector. Gambling legislation was ultimately passed in 2018, but the implementation of the scheme has been delayed.
The legislative process involved public consultations that brought in nearly 2000 suggestions from 600 gaming companies. Ultimately, sports betting is set to be privatized, lotteries will be run by the state governments, and jockey clubs will continue to offer horserace betting. The highly anticipated new regulations are set to come into force by the middle of 2021.
Once the new regulations come into effect, Brazil will have the continent’s largest land-based and online sports betting market. With a population of over 200 million (an estimated 63% of whom have access to mobile technology) and a nationwide passion for sports — particularly football — Brazil is a dream come true for sportsbook operators who want to expand into South America.
The sportsbook licensing fee has been set at R$3 million ($560,000), with a R$20,000 ($3700) monthly fee for land-based retail shop operators. Sportsbooks that exclusively operate online will pay a monthly fee of R$30,000 ($5600), and those operating both retail and online will pay R$45,000 ($8400).
The entire iGaming industry has been keeping a close eye on the situation in Brazil — and for good reason; within five years of becoming regulated, the country’s sports betting market is expected to be worth over US$1 billion.
In our next issue we shall report updates from other iGaming industry markets in Latin America.
