Ron Mendelson is the Director of Costa-Rica based International Business & Corporate Services consultancy firm, Fast Offshore. With over 24 years of real-world experience in iGaming Licensing and Payments, Regulatory Compliance, Tax-Efficient Corporate Structuring, Incubator and other Hedge Fund Licenses, Blockchain and Cryptocurrency related services, he advises a number of international clients on their business needs in the Americas, Europe, and beyond.
Latin America is a diverse region, and this is demonstrated well in its approach to the online gambling sector. In his latest column for Yogonet, iGaming industry consultant Ron Mendelson shares a brief analysis of the key jurisdictions in Latin America, including Brazil, Mexico, and Colombia.
Simply put, each country takes a completely different approach, including outright bans, partial regulation, full regulation, and no regulation. This fragmented legal framework can be challenging for operators who want to work in the region, but the vast potential for growth and development means it is worth navigating.
The betting market across all of Latin America is set to triple between 2020 and 2025, surpassing $3 billion by the start of 2026. This unprecedented and impressive growth will be predominantly fuelled by three countries; Brazil, Mexico, and Colombia.
Brazil is the most populous country in Latin America, with over 200 million inhabitants- more than half of which have mobile phones. Currently, online gambling is not allowed, but that doesn’t mean Brazilians are not gambling online.
In 2022, more than half of Brazilians said they gamble online at least one to three times a week. As for favourite casino game, roulette tops the bill along with soccer betting. Around 80% of Brazilian adults say they bet or have bet on soccer at least once.
As of 2018, the Brazilian government announced it would license some online gambling sites at a hefty fee of $4.4 million for a five-year license. But by December, ex-president Jair Bolsanaro had failed to sign off on the regulations before the two-year deadline, plus an extension of two years expired, meaning the entire process must go back to square one. Currently, operators regulated elsewhere are tolerated, but there are high hopes that new regulations will be proposed to regulate the local market better.
Furthermore, there are potential plans afoot to end certain lottery monopolies and open up the sector to other stakeholders.
The online gambling sector in Mexico has been growing due to a change in Mexican lifestyles and an increase in disposable income. This, combined with more smartphones, quicker internet, and more accessibility, means the demand for online gambling and betting in the country has been rising steadily. In fact, almost 40% said they bet on sports online, while a quarter plays online lottery draws. Between now and 2026, the sector's value is set to grow at a rate of 22.9%, far more than many of its neighbors.
As for preferences, Mexican players prefer casino games and sports betting, particularly soccer. As for regulation, this began back in 2016, and the country is currently served by locally regulated operators as well as those based outside of the country. The Mexican market is ripe for the picking, whether you want to get regulated locally or offshore and provide your betting and gambling services to Mexican players.
As for Colombia, the regulatory system is complicated, but the great potential remains. In 2016, the government legalized some forms of online gambling but promptly brought everything under the control of the state. Private companies can only operate with special government permission, and proceeds should be used for social purposes.
But again, this does not mean that offshore-licensed online gambling companies cannot provide their services to those in Columbia. As of the end of 2022, there were over seven million registered iGaming accounts bringing in a revenue of $5.3 billion a year. There are many more opportunities left to unlock as the total population is over 51.5 million, with smartphone ownership rates of 72%.
If you want to find out more about expanding into Latin America, Fast Offshore can help. We have been working in Latin American jurisdictions for the last 26 years and have extensive experience and knowledge of local regulations, preferences, processes, and more. Not only that, but we can also help you get set up in offshore jurisdictions that allow you to offer your services throughout the region. Our team can assist with company incorporation, licensing, structuring, payments and ongoing compliance- all you have to do is ask. To find out more about online gambling in Latin America or to get set up as an operator, contact Fast Offshore today.