Prospects for iGaming market in Latin America

Latin America gathers more and more attention, emerging as one of the most promising markets. In South America, there's a clear trend towards legalization and regulation of online gambling. Notably, in Brazil, legislation that could legalize sports betting and casinos is on its final stages of approval.

The most valuable asset of Latin American region is people. With 75% of the continent's population having access to mobile phones, promotion of online casinos becomes significantly easier. This positions the region on par with developed Asian countries.

Key characteristics of South American online gambling market include: 

• Common language: Most countries are Spanish-speaking, except for Brazil (Portuguese) and English-speaking Guyana.
• Diverse regulatory principles: Each country has different online gambling laws, necessitating thorough research of legislation and staying updated with changes. In some countries, laws are currently under discussion and could change.
• Prevalence of mobile phones: This is crucial for development strategies. A mobile-friendly version of your website would be more popular among visitors.
• Variety of unique payment systems: This includes local systems like PIX in Brazil and continental ones like Pago Facil.
• Popularity of football: This makes sports betting, particularly on football matches, one of the most profitable niches.
   

iGaming regulation in Latin America

In current world, keeping up with legislation is really important thing. Even the most effective campaign to promote an online casino or sportsbook will be ineffective if it goes against the current law.

Regulation of iGaming in Latin America is as follows:
 

Argentina

As a federal republic, Argentina’s gambling laws vary by province, regulated by local rather than federal authorities. Therefore, operators must obtain permission for their activities in each individual province. For instance, operation of gambling websites is permitted in Buenos Aires province. Since 2021, licenses have been issued for local companies to collaborate with foreign operators. Taxation of gambling portals is comprehensive: a federal gross income tax of 5% is levied, in addition to provincial taxes.

 Regarding promotion of online casinos, consider advertising restrictions: advertisements cannot target minors, and only operators with local license are permitted to advertise. 

Colombia

Colombia is the most accommodating country towards iGaming in Latin America. Its jurisdiction offers tangible opportunities for development of gambling industry. Legalization of gambling in Colombia began in 2016, and by 2017, local licenses for gambling operators were legalized. At the same time, country actively bans illegal offshore operators.

Furthermore, Colombia has the fourth largest economy on the continent. With a population of 50 million people, 56% of whom regularly use mobile phones, market for online gambling is rapidly growing and developing. Conditions are favorable for online casinos and sports betting as well. The most popular form of gambling in Colombia, as in other South American countries, is betting, but lotteries and gaming slots are also requested. The only illegal form of gambling is horse racing.

Gambling in Colombia is taxed at 15% of gross revenue. In addition, operators also pay an annual fee. In 2020, the state treasury received $200 million in taxes from gambling operators.

Brazil

All forms of gambling except for the state lottery were prohibited in Brazil, before the actual movements to legalize gambling has started a few years ago. Since 2018, process of legalizing sports betting is in front of our eyes. This sector is well-aligned with its target audience: Brazilians are passionate football fans, even by Latin American standards. The sports betting bill drafted six years ago continues to be revised and refined. Notably, previously raised tax rate for bookmakers has been reduced to 12%. Winnings are taxed at 15% from the player.

The cost for an operator's license is BRL 30 million (approximately 6.35 million USD). The newly established National Secretariat for Games and Betting (SNJA) is responsible for overseeing gambling industry in the country. This law also entails strict regulations on online casino and sports betting promotion. For instance, betting websites are not allowed to broadcast games, a regulation enforced by the National Council for Self-Regulatory Advertising (CONAR).

As of now, Brazil permits the licensing of foreign gambling operators. In late October 2023, a list of requirements for gambling operators was published, covering aspects such as:

• Local customer support
• Compliance with ethical and legal standards, and prevention of illegal activities

This progress in legislation reflects Brazil's evolving stance towards gambling industry, indicating potential growth and development opportunities for iGaming within the country. World-known reputable operators are waiting to enter Brazilian market and keeping a close eye on the whole process right now.

Chile

In 2022, Chile adopted a new Federal Gambling Law (035/2022), which is currently in the process of being finalized. Experts predict rapid development in Chilean gambling sector, including online casinos, as this law implies market liberalization. Previously, only three organizations operated in the country: Lotería de Concepción, Polla Chilena (sports betting), and Teletrak (horse racing).

Now, online gambling projects are taxed at 20% of GGR (Gross Gaming Revenue). Additionally, operators must allocate 2% of gross revenue to sports development in Chile and 1% to funding responsible gaming programs. The annual license renewal fee is set at 73,000 USD. A cooling-off period of one year has been introduced for grey market operators.

Peru

In Peru, regulation of the online gambling market is still in progress. By the end of 2023, a document was prepared to bring clear operations within the country. These rules come into effect on February 9, 2024. Operators currently active in Peru’s gaming market will have one month to apply for a license, from February 10 to March 10, 2024, or face penalties if didn’t. The new regulations are expected to allow Peruvian government to collect about 162 million annually, which will be invested in reviving tourism infrastructure, promoting sports, and participating in mental health programs.

Ecuador

Since 2011, gambling has been banned in Ecuador. However, iGaming in Latin America includes Ecuador as many companies operate in a grey area. While gambling activities are legally prohibited, online casinos on international IP addresses operate unimpeded and are even taxed! Recently, Ecuador’s Tax Authority imposed VAT on eight foreign online casino operators. Therefore, if your online casino is licensed in Curaçao or any neighboring South American country where gambling is legalized, you can attract players from Ecuador. However, be prepared for potential tax liabilities. This is the real paradox of the Ecuadorian market, but it is as it is.