Untapped Potential of Latin American Online Gambling

As the online gambling industry continues to mature there is an increasing need to unlock the revenue generating potential of emerging markets. In response to this need for fresh markets, iGaming data aggregator, Slotegrator provided us with an insightful report on the potential of Latin America.

Join us as we delve into their report and highlight some interesting facts about the “Land of Sleeping Giants”:

 Gambling Law Across South America

From the outset it is important not to think of South America as one does North America – the continent is not a single rule society broken into states but is rather made up of several independent countries.

✓The regions below are currently pro-online gambling:

• Argentina – Online and land-based gambling are legal, however, both are regulated at a provincial level.
• Colombia – With the introduction of the Colombian Gaming Act in 2016 all forms of casino games and sports betting, both online and offline, are legal in the country.
• The Dominican Republic – Thanks to a tourism boom up until the 70s the Dominican Republic has not only legalised gambling but also offers tax incentives to companies investing in its tourism industry, which can include casinos.
• Mexico – While the 1974 legislator prohibits most forms of gambling, keen legal minds have found enough loopholes in the aged regulations to allow gambling to flourish in the country. In Mexico online casinos and sportsbooks do not require special licenses only a partnership with an existing land-based license holder.
• Nicaragua – Both online and offline gambling was legalised in Nicaragua in 2001, however, there was been truly little development of the market. This could be due to the regulatory controls being shared by the Control Board of Casinos and Gaming Venues and the Ministry of Finance and Public Credit.
• Panama – Nearly all forms of gambling are regulated in Panama, with the only exceptions being the lottery games, betting on horses and wagering on events featuring minors or which impact the country’s political landscape. Panama is also one of a small number of Latin American countries to offer a fully-licensed online casino market, including the ability to promote to locals on “.pa” domains.
• Paraguay – All forms of gambling are legal in Paraguay; however, it only has a single licensed sports betting operator.

✓The following regions are actively pursuing online gambling regulation:

• Brazil – New gambling regulation is expected to come into force by mid-2021 which will allow for the privatisation of sports betting. The national lottery will remain the government's purview and bets on horseraces will continue to be managed by the jockey clubs.
• Chile – The Chilean congress is set to receive a bill in favour of regulating online gambling by mid-2021. Should the bill be approved it will see Chile offer legal online casino games and sports betting.
• Peru – Gambling regulation in Peru only covers land-based casinos and slot machines, while betting and lotteries are unregulated. Online gambling is also unregulated, but not prohibited either. Authorities have declared their intention to regulate the online gambling sector soon.

✓These remaining regions show no signs of regulating or have regulatory frameworks which make the region unappealing to investors:

• Costa Rica – Based on laws from 1922 and 1974 wagering on games of chance is illegal in Costa Rica. In an interesting turn of events, Costa Rica has however become a business hub for gambling companies – none of which may accept Costa Rican players of course.
• Ecuador – In 2012 the leadership of Ecuador voted to shut down all forms of gambling in the country making it illegal.
• Guyana – The laws surrounding gambling in Guyana are a legal minefield. According to its Gambling Prevention Act gambling in “common gambling houses” is illegal, yet in 2007 they legalised casino gaming and have since licensed two formal casinos. Online gambling is not strictly prohibited, based on the above definition, but all official remote gambling licenses were revoked in 2013.
• Uruguay – Gambling regulation in Uruguay is another legal minefield as rather than adhering to a centralised set of rules each operator is dealt with on a case-by-case basis. In each instance, the terms negotiated in the specific contract are all that is binding for that operator.
• Venezuela – Gambling has been illegal in Venezuela since 2011, however, President Nicolas Maduro installed a single legal casino at the Humboldt Hotel in Caracas where wagers would be placed in the country’s Petro cryptocurrency.

It is clear from the above that the LATAM people have a fondness for gambling, both at local gaming halls and online, and that the continent would benefit greatly from the cooperation between the countries to set up a unified gambling standard.

Countries with the Best Growth Potential

Based on the market review and legal situation five countries show fantastic potential for the growth and development of online gambling on the continent.

1. Colombia – has a massive population of approximately 50 million people, where approximately 56% of them are online via a mobile device. With a 2020 net gaming revenue of around $200 million and a well-documented passion for football, it is the perfect region for mobile-focused sports betting and casino development.
2. Argentina – comes in just behind Colombia with a population of 45 million which represent LATAM’s second-largest economy. Under its existing framework, online gambling revenue is estimated at $2.4 billion per annum, a strong brand with a local presence stands to gain a lot by investing in Argentina.
3. Brazil – holds the greatest long term potential with a population in excess of 200 million, mobile penetration of around 63% and an annual GDP upwards of $1,363 billion. However, all of this potential remains untapped pending the introduction of new gambling regulation. Slotegrator estimates that sports betting alone will be a $1 billion industry within five years of regulation.
4. Mexico - with its solid economy, 120 million-strong population and 60% mobile penetration is poised to become an online gambling sensation, provided it can resolve its one regulatory shortcoming, the lack of official regulatory authority. With limited licensed operators, the country is losing out on up to $400 million annually in taxable revenues, not to mention the income generated from the licenses themselves.
5. Chile – while Chile is a relatively small market representing approximately 19 million people with a GDP of around $260 billion there is a lot that can be done to capitalise on a market when it is pro-gambling. With Chile clearly driving towards a regulated market soon it could serve as a great entry point for brands looking to create mutually beneficial relationships in Latin America.

While the Slotegrator report goes into detail on all of the LATAM countries covered in the legal section the five noted above represented the ideal intersection of interest, economy and legal security that would encourage casino and sports betting brands to invest in the growth and development of the region.