Following the legalization of online sports betting in Buenos Aires last week, Rubén Loeches – Chief Marketing Officer at R. Franco Group – evaluates the challenges and opportunities for sports betting that lie ahead for the region.

SBC Americas: Do you think there will be a high demand for Buenos Aires sports betting licences?

RL: I’m sure there will be. This is a part of the world where passion for sport runs deep – no more so than with football. From the last few years alone we’ve already seen the Latin American sports betting industry grow into a multi-billion dollar market. Buenos Aires has now become part of this rapidly growing list of regulated sports-betting markets on the continent.

SBCA: Will this Buenos Aires legislation encourage other provinces to follow suit and legalize sports betting and online casino to keep up?

RL: That’s definitely the idea. The city and province of Buenos Aires is the country’s biggest jurisdictions in terms of population and revenue. While online gaming has already been legalised in other parts of the country – they’re relatively small markets compared to Buenos Aires’ 40% of the national population. So no doubt if their regulation proves to be a success, other jurisdictions will follow suit in issuing their own frameworks to join the momentum.

We’ve been in the Colombian market for two years now with Corredor Empresarial, the country’s largest operator, and have seen first-hand that sensible legislation which protects consumers while allowing opportunities for growth has worked wonders. Buenos Aires can now follow that example to great success.

SBCA: What can Buenos Aires learn from the Colombian market? 

RL: Colombia has been a pioneer in the regulation of online gambling in Latin America – and they’ve been able to take advantage of other regulations while applying more scope, which has proven to be a very smart move. Alongside creating the conditions for a dynamic market, the Buenos Aires regulators would do well to follow the examples set by Coljuegos.

The Juegalab initiative, set up as a platform for discussion between the regulator and operators to discuss the needs and opinions of the sector has been a particularly good idea – and very popular with our partners in the market.

SBCA: How popular has sports betting proven to be in Latin America so far? 

RL: It goes without saying that sports betting has proven to be immensely popular in Latin America. Passion for sport runs deep on the continent – as does backing (or even betting against) local teams.

However, in terms of popularity, European operators eyeing expansion into the fast-developing markets of Latin America would do well to remember that the collective group of countries are not one homogenous mass. None more so when it comes to sports betting.

For example, Mexican bettors are far more accustomed to US sports such as The National Football League (NFL), Major League Baseball (MLB) and the National Hockey League (NHL).

Argentina (unsurprisingly) is far more focused on ‘soccer’ and generates far more turnover than many of the more northern nations. Other key markets, especially Brazil, are known for a special focus on sports with a significant local profile, such as beach volleyball and futsal.

SBCA: How do you see the outlook for further online regulation in Latin America?

RL: Currently, around four-fifths of igaming revenues in Latin America are offshore and unlicensed. As national and regional governments begin to enact regulatory frameworks, they’re going to experience a real windfall in revenue which will no doubt greatly benefit local economies.

However, Latin America is also a dynamic and complex region where regulatory changes depend on political decisions sometimes subordinated to economic circumstances – and while we anticipate a shift towards regulated markets, it can prove somewhat slower than many would like.

Peru certainly looks to be taking steps in the right direction, and we hope to see concrete progress in that market over the coming months. Meanwhile, other jurisdictions in the region continue to explore the possibilities of introducing online regulation, including Brazil.

SBCA: What are the unique challenges of operating in Latin America?

RL: The battle for supremacy in these territories will be determined by an ever-changing dynamic. While the most successful gaming operators in the world are becoming more and more international in their approach, at the same time we are seeing smaller, more agile operators with local expertise to carve out a niche in the region’s markets.

There is a temptation among many onlookers in our industry to treat Latin America as a single, homogenous market. But the intricacies of the regulated Colombian market will be very different to those of future, regulated jurisdictions. Everything from tax rate, compliance and responsible gaming frameworks to even the permitted product verticals will likely be different.

We have seen many operators learn this lesson the hard way in Europe. When Spain regulated its online market in 2012, those operators that tried to roll out products that had only been tested in mature markets such as the UK and the Nordics quickly saw this would not be enough to power sustainable growth, and those eyeing the market would do well to remember this.