Since 2018, online gaming operators have focused on regulating Latin American territories. With opportunities currently only limited to Columbia and Mexico, all eyes are on the multiple other regions in the process of liberalising.

Brazil makes up half of the total LATAM population and is understandably the most enticing market for the gambling industry to penetrate. So how will the approval of the crypto law in Brazil affect the growth of the LATAM gambling market?

✓Crypto Law Finally Approved in Brazil

Now that the Chamber of Deputies in Brazil approved the cryptocurrency law project, it's eminent that it will significantly impact the growth of LATAM gambling.

Local media reports that the discussion and passing of the crypto law was a rushed decision, with some claiming that the bill might find resistance with the unknown stance of the new government. This opinion is further supported by the approved bill leaving out two crucial factors - the planned tax exemptions on green mining and the asset segregation from company funds for Virtual Assets Service Providers (VASPs). 

The discussion and approval of the crypto law project were postponed several times over the past several months. It was finally approved after deputies voted to shed some of the changes presented by the Senate.

✓A Historic Matter

Approving the crypto law in Brazil is an essential step towards the country's future. Current president Jair Bolsonaro was able to approve the law in a general form, providing the opportunity for more specific rules to be formulated later. This decision is in full support of deputy Expedito Netto, the rapporteur of the bill, who stated:

"We are voting on a historical matter. Today, the country is ahead of others in regulating digital assets activity assets. Moreover, we have the support of the current and future government for the matter."

He further recognised that the tax-related regulation should be defined as a separate matter in another bill. The asset segregation issue is another challenge, as it would force VASPs to separate customers' funds from their own funds. With the recent collapse of the leading crypto exchange FTX, many deputies support asset segregation to allow users to avoid loss of funds to occur in future.

✓Opposition From Anti-Segregators in Brazil

With the anti-segregation side prevailing in some respects, brokerage firms and other companies might be limited to offering spot-based trading products. This opposition means that the regulation of the kind of warranties these firms should offer their users will be defined by the regulator on a case-by-case basis. 

According to Marcelo Castro, a lawyer in digital law, the passing of the bill establishes a base that will provide subsidies "for future infra-legal regulation". In addition, there will be oversight by a regulator appointed by the executive, which can be any specific institution such as the Central Bank of Brazil.

The approval of the cryptocurrency law marks the starting phase. It is the first step in regulating VASPs and other crypto companies, including online crypto gambling platforms. However, to avoid getting ahead of ourselves, many analysts believe this bill's passing is only the initial phase of this regulation. They expect that applying the law and implementing specific rules will follow in the coming years.

✓LATAM - The Most Appealing Gambling Market

There may have been a significant lag since the launch in 2016 of Columbia's regulated iGaming market, but other territories are following suit. With the enormous size of the potentially untapped market, operators are eager to penetrate the unaddressed regions that are particularly appealing for the iGaming industry. In our guide to the LATAM Gambling Market in 2022 and Beyond, we take a closer look at the opinions of the four highest-populated countries in South America.

Betting on offshore internet sports sites is legal in Mexico, and no laws prohibit Mexican citizens from joining these sportsbooks. While countries like Colombia are fully regulated, others such as Brazil, Argentina and Chile are still working with operators and regulators to create legal frameworks. Read more about how gamblers in Brazil, Columbia, Argentina, and Chile feel about gambling in the article linked above.

Significantly, Latin Americans agree that online gambling would be less harmful and more appealing with adopting regulation. Across all four of these territories, gamblers called for stricter and safer gambling regulations and guidelines. Cryptocurrencies' legal implementation will address and resolve most of these safety concerns.

✓Gambling Industry in Brazil - The Sleeping Giant

The addressable market size makes Brazil particularly appealing to the iGaming industry. The United Nations estimates the current South American population at 439,429,359. With a population of over 215 million, Brazil makes up half of the total LATAM population. Moreover, Brazil is one of the five countries with the highest population in the world and is often referred to as the "sleeping giant in the gambling industry".

Almost all gambling activities, deemed to be "games of chance", have been prohibited in Brazil since 1941. The only acceptance is lotteries under the state monopoly and horse-racing wagering. Poker was declared legal in May of 2022 as it was deemed a “game of skill, not chance”. With the approval of the crypto law in Brazil, it may be one step closer to developing and finalising gambling regulation for its citizens.

Despite the significant lag since Colombia's regulated igaming market launch in 2016, other countries, including Brazil, are catching up.

✓A Territorial Perspective

Each territory in South America is at a different stage of gambling regulatory development. However, there is no doubt that the legalisation of cryptos in Brazil will have a massive impact on the growth of the overall LATAM gambling market. Despite the volatile nature of this digital currency, online crypto gambling is on the rise worldwide.

Multiple territories in South America are in the process of liberalising and regulating the gambling market. The aim is to provide a secure and regulated iGaming platform. This regulated market will attract LATAM gamblers to register with licensed and legal operators instead of risking their hard-earned money on the black gambling market.

✓Time To Act

Naturally, multiple operators and suppliers have been tracking opportunities. They are positioning themselves to take full advantage of this developing opportunity. Forming partnerships with international operators and snapping up established native brands for local know-how are all crucial factors that can ensure a successful roll-out in LATAM. They believe that the time for the industry to act is now.

With the approval of the cryptocurrency law in Brazil, the regulation of VASPs and other companies that use crypto in the country is now open. A regulator appointed by the executives will oversee operations.

The new crypto law may take a few years to have any practical effect. Nevertheless, with crypto gambling on the rise worldwide, the recent approval of the crypto law in Brazil will likely fast track to being a fully regulated legal online gambling territory.