The development of Latin America’s online gambling industry is intensifying. Rising rapidly from its status as an emerging market, Latin America is now a primary player on the global stage. The region, already witnessing an incredible transformation, will reach new heights in 2025. With regulatory frameworks growing at pace, ever-expanding player bases and operator interest thriving, this article, the first in a three-part series, explores the recent Latin America Online Gambling November 2024 Outlook.

Brazil’s bustling markets through to the closely controlled systems of Peru and Colombia, this diversity of varied approaches shows both the opportunities and challenges of gambling and setting up a gaming business in this spirited and dynamic part of the world. By exploring the region’s state of play and identifying the key drivers of growth, we can identify what is shaping the future in this region and consider the hurdles that remain. Analysts project Latin America to become a $12 billion (€10.9/£9.5 billion) market by 2028, so understanding the bigger picture will uncover the massive potential that this region offers.

The rise of regulation

Historically known as a mishmash of unregulated or semi-regulated markets, Latin America’s reputation painted it as being a challenging market for operators to manoeuvre. Now, the regulatory tide is shifting. Colombia, Peru and Argentina are examples of countries that have formed and embraced robust licencing systems, while others, such as Chile and Brazil, will introduce groundbreaking frameworks.

Colombia, as the first Latin American country to full regulate online gambling in 2016, stands out as a pioneer. A whole host of operators took advantage of this, offering everything from sports betting to online casinos. Nonetheless, Peru has followed suit, issuing 63 licences to operators under a recently launched regulatory regime. The effect is to not only legitimise its market, but this also generates a competitive environment where provides and players can benefit. Several operators have strengthened their presence in Latin America by securing supplier licenses in Peru.

With a province-led regulatory model, Argentina is unique in its decentralised oversight. The Buenos Aires province and city lead the way, with extensive online gambling options, including virtual events and sports betting. Although other provinces are following suit, it’s not yet as broad as Buenos Aires nor as sophisticated.

Other markets like Paraguay and Chile are considering legislation to liberalise its online gambling market. Paraguay intends to introduce competitive concessions for sports betting and casino games. Meanwhile, Chile’s senate debates a bill that would licence online casino games and sports betting by 2025.

Brazil, however, is the region’s sleeping giant. Experts project that its market will generate over $6 billion (€5.46/£4.74 billion) in gross gaming revenue (GGR) by 2028. This potential is stratospheric compared to its neighbours. In January 2025, Brazil launches its federal licencing regime. This will be a turning point for not just the country, but the wider region. As an example of the potential riches of this region, Betfair recently paid the BRL 30 million (USD $4.9/€4.46/£3.87 million) licensing fee to operate in Brazil.

Brazil’s bold move to reshape the game

Brazil is the market everyone is watching. Full stop. Although several other Latin American countries have taken substantial steps towards regulation, all eyes are on Brazil. Its plans for a federal licencing system for online sports betting and casinos games will not only transform the region, but it will also shape the journey of other countries as well. Operators and suppliers will have unprecedented opportunities. It’s the place to be in 2025.

Not everything has been smooth sailing, though. The Brazilian government has faced much scrutiny, including court challenges, political turmoil, rising concerns over unregulated markets, and the all-important gambling addiction debate. Whilst true that obstacles remain, January 2025 is almost here and promises to unlock a market that may rival some of the largest globally.

Is Brazil’s regulatory framework too ambitious? Too demanding? While being formidable, these regulations have raised the bar. Operators must meet rigorous requirements – facial recognition technology, rapid payout systems, compliance with a central monitoring platform, to name a few. This promises to drive innovation and intensify player protection, which can only be a good thing for the gambling industry. Published on December 9, 2024, Brazil announced the creation of an Interministerial Working Group on Mental Health, Prevention and Reduction of Harm from Problem Gambling.

Challenges in a complex market

Operating in Latin America comes with a fair share of challenges, albeit presenting obvious opportunities. Higher taxation rates, regulatory inconsistencies between countries, and the undeniable omnipresence of unlicensed operators represent considerable barriers to entry.

Then we come to taxation. Tax is always an irksome issue which countries approach differently in the gambling sphere. Peru and Colombia offer straightforward tax systems tied to gross gaming revenue (GGR). Brazil, however, has added layers of levy, including “sin taxes” and selective consumption taxes.

A “sin tax” imposes a surcharge on goods deemed socially undesirable, harmful, or overly indulgent. So, the double-edged sword for the government is to appear to discourage overuse whist generating much needed revenue.

On the other hand, a selective consumption tax is an intended levy which applies to specific goods or services. In a gambling context, this taxes a percentage of each bets value, or the GGR, resulting in a larger financial obligation for operators. The government has a balancing act, demonstrated by both taxes, as they must balance revenue generation with social responsibility.

A cautionary note is these added costs carry the risk of driving players to offshore operators subverting the entire purpose of regulation. However, the exact implementation and rates may change as the regulatory framework evolves.

Another growing concern is the restriction on advertising. Argentina leads this debate and has proposed regulation that could ban nearly all gambling-related advertising. If these policies become overly restrictive, then the harm will outweigh the intention. Not only won’t vulnerable groups have the protection needed, overcooking these policies will harm the legitimate operators weakening the competitive landscape.

Other similar countries to Argentina around the globe are:

Spain

• Allows gambling advertisements only between 1 a.m. and 5 a.m. on television, radio and online platforms.
• Bans the use of celebrities, popular characters and sports sponsorships in gambling advertisements.
• Until 2024, previously prohibited promotions targeting new customers. However, in 2024, the Spanish Supreme Court annulled certain provisions, including the ban on the use of celebrities. They lifted the bans on promotions for new customers and online advertising.
• Time slot limits (1 a.m.–5 a.m.) and sports sponsorship bans remain in place.
• Following the ruling, gambling ad spending surged by 52.6% in June 2024, compared to the previous year.

Italy

• Legislation introduced a blanket ban on gambling advertising in 2019.
• Bans on all gambling advertisements across TV, radio, and online platforms, including social media.
• Banned sports sponsorships by gambling companies.
• Advertisers and operators breaching the ban face fines ranging from €50,000 to €500,000.

Australia

• Have banned gambling advertisements during live sports broadcasts from 5 a.m. to 8:30 pm, including commercial breaks (five minutes before and after the event).
• For longer form events such as the Olympic games, Australian regulations limit gambling adverts to one every two hours after 8:30 pm.
• Stricter rules apply to online platforms and streaming services.
• The aim is to protect children and reduce problem gambling among vulnerable groups.

Norway

• Bans advertising by unlicensed gambling operators, particularly on TV and digital platforms.
• Focuses on targeting illegal offshore gambling ads.
• Includes strict measures such as fines and ISP blocking.

Moldova

• Comprehensive gambling advertising ban.
• Prohibits promotions for casinos, gambling machines, and other gambling-related activities.
• Includes a total advertising ban across all media platforms.

United Kingdom

• Gambling advertising regulations overseen by the UK Gambling Commission.
• Gambling ads cannot target vulnerable individuals or those under 18.
• New rules introduced in 2023 require banning indiscriminate adverts that appeal to younger audiences and tougher guidelines on placement and content in digital media.

Riding the wave of gaming gold

Latin America offers amazing opportunities for any operator willing to navigate the labyrinths of complexities. The region possesses a young, tech-savvy, and emerging generation who are embracing online gaming at an extraordinary rate. Colombia and Peru are already showing stable year on year growth. Their player base and revenue will only grow.

Brazil’s 2025 launch will be a catalyst for deeper regional development. The regulatory success, or failure, of the region’s largest economy will unquestionably influence neighbouring markets. For example, Chile, who is in the process of developing their frameworks, may look at Brazil as a model, better harmonising the region.

Technology is transformational. Its role appears to be limitless in possibilities for this sector and region. From advanced payment systems such as Brazil’s Pix to mobile-first gaming platforms, technology is stimulating growth and redefining player experiences. The ability to adapt to local preferences and embrace innovative solutions are key factors for operators to gain an advantage.

Unlocking the $12 billion future for Latin America

The future is bright for Latin America as the online gambling industry develops. Whilst faced with uncertainties, unique opportunities await. It’s true that the regions’ diverse regulatory approaches are as much a source of complexity as they are an opportunity, but if operators tailor their strategies and innovate specifically to this market, localisation offers a pot of gold at the end of Latin America’s rainbow. By understanding local nuances, building strong networks and partnerships with local stakeholders and regulators, a treasure trove awaits.

In the coming months, Brazil’s federal licencing regime will develop significantly. Will this set the tone for the region’s trajectory? It’s not just all about Brazil, though. Countries like Peru and Colombia hold equal importance. They too can lead the way in sustainable and responsible gambling practices.

With vast untapped potential, the industry faces a critical juncture. Maturing markets and solidifying and unifying regulations places Latin America to become a global leader in offering the best online gambling and sports betting community.

Audaces fortuna iuvat (fortune favours the bold). But in today’s Latin America, the message here is to go local, or go home.

It’s imperative we do not view Latin America’s online gambling boom as a mere regional success story. This is a wormhole to the future of an industry set for change at breakneck speed. Brazil looks set to lead this charge, but neighbouring nations follow suit at pace. Despite the challenges faced by all stakeholders, this region will project into an unstoppable orbit.

The time to act is now. Latin America’s moment is here. Carpe diem.

In the next article in this series, we deep dive into taxation and policy hurdles Latin American operators face. Don’t miss it.

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