Entain plc Senior Vice President of US Regulatory Affairs & Responsible Gambling Martin Lycka opines on the increasing allure of the Americas, pointing south to Latin America as a land of new opportunity for the sports betting industry.
America is calling, or would it be more accurate to say the Americas are calling? These days, the media is flooded with news coming from the other side of the pond, highlighting the latest breathtaking developments in the post-PASPA world of US sports betting. Yet another state has regulated, the highest ever amount wagered on Super Bowl, glamorous celebs agree to become associated with the betting hype, etc..
North of the US border, Ontario and prospectively other Canadian provinces are pondering how to jump on the fast and furious bandwagon of online gambling. North America has been taken by storm.
In the meantime, its Latin American cousins have proceeded in a more pensive, slow-burning manner. Nonetheless, a gambling regulatory revolution is now gathering pace across that continent as well. Its first sparks can be traced back to the noughties when the Argentinean province of Misiones embarked upon a pioneering mission to license online gambling operators in its territory.
Just like many other trail blazing enterprises, the Misiones regulation has largely waned and somewhat drifted into oblivion. And yet, the regulatory embers kept smoldering, waiting for another opportunity to flare up into a shining flame.
That opportunity came in Colombia in mid 2010s when the country took over from Argentina as the beacon of light for straggling online gambling operators looking for a safe haven south of the Caribbean. Colombia opted for a Spain-style regulation that allows for all product verticals, subject to a sensible level of gross gaming revenue tax.
The required local setup is not too onerous either. With these factors being combined with the Colombians’ infatuation with sports, the market has caught the eye of a number of European operators, in particular those who already had set up camp in Spain. New entrants started flocking to it, turning its regulation into one of the conceivable blueprints for tackling online gambling elsewhere in the region.
Mexico – a different regulatory path
At around the same time, Mexico decided to go down a different regulatory path when expanding its gambling market into the online environment. Similarly to New Jersey, the Mexican powers that be allowed land based casinos and other gambling providers in the country to extend their existing licenses to cover digital betting and gaming.
Albeit arguably a more convoluted way of doing things, the model has persisted and keeps going strong as the envisaged overall reform of Mexican gambling regulation is yet to come to fruition. As in the case of Colombia, Europe-based operators have begun to come ashore in Mexico, this time by means of striking partnership deals with domestic operators.
Having two regulatory models to choose from, other Latin American countries and regions are now trying their hand with online gambling. The Province of Buenos Aires has recently completed a licensing tender that saw seven companies, or consortia of companies, authorized to enter the provincial market of 17 million people.
The regulatory model is hybrid in nature as it prescribes a minimum mandatory level of domestic investment. The city of Buenos Aires, as well as provinces of Santa Fe, Mendoza and Entre Rios, are all following suit, turning Argentina into a patchwork of individual regulations that will arguably have to rely heavily on effective geofencing.
Other countries in the region, also spurred by the devastating effects of the pandemic, are loath to lag behind and are in the process of launching regulatory enterprises of their own, or at the very least have announced their intentions to take the plunge.
Bolivia made an announcement to that effect last summer, while the Chilean government has just made it public that it envisages submitting an online gambling law to its parliament in the first half of this year. Peru has also previously indicated willingness to regulate. Panama has beaten them all to it, by having reformed its existing gambling laws in a bid to allow foreign operators to enter its market, in partnership with domestic operators.
Brazil – the big one
And then there’s Brazil – the big one. A nation of 210 million largely football mad people who love to wager. The Brazilian authorities have been at it since late 2018, having been given two plus two years by the country’s parliament to regulate sports betting. The regulatory process has had its ebbs and flows and there is no firm final regulatory proposal on the table just yet.
Nonetheless, the governance structure around the regulatory process has now firmed up and it can be reasonably expected that the Brazilian federal government will have gotten sports betting regulation over the wire throughout this year; also incentivizsed by the fact that the Brazilian judiciary has recently allowed individual Brazilian states to come up with their own regulations. It is likely that this decision will further focus minds on the federal level, with a view to fending off regulatory competition from the states.
The regulated online gambling market is becoming truly global, with flags firmly planted on both American continents nowadays. Doors are being flung wide open for agile multinational operators looking to expand their geographical span in a responsible and sustainable manner. The Americas are calling. Welcome, bienvenidos, bem-vindos!
Martin Lycka is Senior Vice President of US Regulatory Affairs & Responsible Gambling for Entain Group. The views represented here are his own and not necessarily those of his employer.
