International edition
September 23, 2021

An analysis covering from Mexico to Argentina

How is online gaming regulated in Latin America’s main markets today?

How is online gaming regulated in Latin America’s main markets today?
If we talk about online gaming and Latin America, Colombia would take the leading role. A country that accounts for 17 active operators among which we can find Wplay, Betplay, Rivalo, Bwin, Codere, Luckia, Sportium, Zamba, RushBet and Mozzarbet.
Brazil | 04/28/2021

Both local and foreign operators and providers, speak of the great opportunity that exists in this region regarding online sports betting and gaming. A market that has not been fully exploited yet and that acquired greater relevance during periods of strict restrictions to in-person gaming.

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hen it comes to online sports betting and gaming, Latin America is the focus of interest among operators and providers that seek to either reach new territories or venture into other segments due to the market saturation and restrictions that fell upon in-person gaming during the era of coronavirus. In this article, Yogonet reviews the legal framework in which this vertical is carried out in 14 of the countries found in this region, among which Colombia has a leading role with 17 active operators and solid regulations.

ARGENTINA

In terms of regulation, it is the most complex country in all of Latin America. Unlike the rest, it doesn’t have one but 24 different regulatory and auditing entities: one for each province plus the city of Buenos Aires. Two of its most important jurisdictions, by size and strategic position, are taking their first steps in the online gambling operation in the midst of the coronavirus pandemic. 

Both entertainment centers of the city of Buenos Aires, the Hipodromo Argentino de Palermo and Casino Buenos Aires already have an online proposal, despite the fact that at the beginning they had been left out. The Buenos Aires City Lottery ('LOTBA' in Spanish) approved in October the Online Gaming Platform Implementation Program presented by Codere, which plans to start operations shortly; in February the same happened with Boldt; and in March with Grupo Slots and Gaming Innovation Group (GiG). 

The Buenos Aires province closed 2020 with the Official Gazette announcement of the seven winning companies in the award process: Argenbingo-William Hill, Hillside-Pasteko, Casino Tandil-Playtech, Cassava Enterprises-Boldt, Atlántica de Juegos-Stars Interactive, Vin Baires-Intralot and Casino Victoria-Betsson.

Mendoza, Santa Fe and Corrientes enabled online gambling in the midst of the pandemic and joined Chaco, Misiones, San Luis, Tucumán, Neuquén (which added the new Casino Maverick and Casino Magic proposals), Río Negro, Entre Ríos (which already markets lottery games, but plans an expansion), Santa Cruz and La Pampa, provinces that prior to the existence of COVID-19 were already working with online gambling.

The gaming entities grouped in the Asociación de Loterías, Casinos and Quinielas Estatales of Argentina (ALEA) promote the bet.ar domain with the aim of differentiating the legal gaming offer (approved by a state lottery) from the unauthorized one.

BOLIVIA

“In reference to the activity of online sports betting and games, the plurinational State of Bolivia does not have specific regulations that regulate them. Therefore, as established in Article 8 of Law 060 of Lottery and Chance Games in November 25, 2010, all profit wagers are prohibited," was the official response of the country's Gaming Control Authority to Yogonet's inquiry. 

In January of 2017, Jessica Saravia, who returned to the auditing institution at the end of 2020, said: “We know that Bolivian players enter internet pages and play, but the country does not receive any income from it. We are scheduled to work on online gambling regulations, taking into consideration the experiences of some jurisdictions that are similar to our reality." 

BRASIL

Sports betting was legalized with Law 13756/2018, which also granted this modality the status of lottery-type gambling. Towards the end of 2019, the Ministry of Economy was working on the requirements of the regulations, and its officials were optimistic: they expected to have an operational market by mid-2020. However, the coronavirus pandemic delayed the process.

Despite all of that, the country already has an active sports betting market. “The Supreme Court decided in September 2020 to end the federal monopoly on the exploitation of lotteries in Brazil- Thanks to Law 13756/2018 the states received authorization to offer their own lotteries and sports betting as well. Several state lotteries are already operating, and others are in the implementation stage. Lotteries in the country are operated by the Caixa Econômica Federal, and the regulation of sports betting is in charge of the Ministry of the Economy,” said Marcelo Munhoz da Rocha, Lenzi Advocacia's lawyer.

All casino games, both online and in-person, are forbidden in Brazil. The Supreme Court has not yet ruled on the matter.

CHILE

In an interview with Yogonet in 2018, the former head of the Superintendency of Gambling Casinos (SCJ, in Spanish), Francisco Leiva, said that gambling, both in-person or online, were prohibited in the country unless authorized by particular and exceptional laws, as in the case of casinos, the Polla Chilena de Beneficencia, the Concepción Lottery and the racetracks.

This means that the operation of online games today is prohibited. However, Chilean users have access to websites that are based and licensed in other jurisdictions. To control this situation and "create a competitive market, safeguard public trust, protect the health and safety of the players, increase tax collection and make transparent the origins and destination of the resources obtained through these platforms," the Ministry of Finance informed that it would send a bill to Congress to regulate online gaming. The announcement was made on January 29 and, although it is not yet known when it will take place, it is clear that it will be during the first half of 2021.

“A precarious situation,” this is how Sebastián Salazar, Estelar Bet's Marketing Manager, described the legal framework for online gambling in Chile, but he affirmed that Law 21,210 was an invitation to invest in this sector. The regulation sanctioned on February 24 of 2020 established that all remote services remunerated and rendered by non-residents or people who had not legal residence in the country must, from June 1 of that same year, pay a Value Added Tax (VAT) of 19%. He assured that what remains is "to build a competitive regulation with a wide range of products to promote technological development associated with the industry, but with an emphasis on protecting the health and rights of users."

COLOMBIA

It is the local reference in online gambling regulation. Since it delivered its first license in June 2017 to Wplay, which remains one of the market leaders together with BetPlay, the sector has grown to reach a total of 17 active operators. Online games raised 5,362 million Colombian pesos in 2017, 37,912 million in 2018; 78,489 million in 2019; and 54,884 million in 2020 until September.

The live casino, the commercialization of new games over the internet and the implementation of the co-organized online operation are some of the changes that came about in the last 12 months.

COSTA RICA

As part of a one-year pilot program, the local gaming regulator Junta de Protección Social (JPS) began on March 15 a process to deliver the concession of online games and lotteries - sports betting and events, Electronic Lottery, Lotto, Nuevos Tiempos and Pick3, among others - that guarantee the generation of profits for the 500 social programs that the institution serves.

Five offers and a value proposition were received in an official letter. Esmeralda Britton González, president of the JPS, said that the chosen concessionaires must be legal entities, they will have 30 days to put the platform into operation and the concessions will be granted without exclusivity. The required obligations include the payment of exploitation rights, depending on the type of game, and a guarantee deposit of USD 250,000.

CURAZAO 

In a column about Online Gambling in Latin America after COVID-19 written for Yogonet, lawyer Carlos Fonseca Sarmiento pointed out that the lack of regulation as well as the poor regulations make it remain “attractive for many operators to obtain gambling licenses in Gibraltar, Alderney, Isle of Man, Malta and closer to Antigua and Barbuda, and Curaçao.”

The Caribbean island of Curaçao is the mecca for online gambling licenses in Latin America. “As long as governments do not regulate, enable or prohibit online gambling, the use of a license from another jurisdiction allows operators to comply with the legal requirements of technology providers to acquire their services. Some of the jurisdictions that provide licenses do not limit use to their territory. In other words, it is up to the operator to comply with the regulations in force in each country,” said Juan Ignacio Juanena, a consultant specializing in online gambling.

Although today they count with thousands of clients, Juanena said that offshore licenses will disappear in the medium or long term: they make no sense in the face of regulation.

MEXICO

Andrea Avedillo Builla, head of the Legal area of the Lazcano Sámano study, commented that "many continue to believe that - online gambling in Mexico - is a gray market or, worse, illegal." However, she pointed out that the Gaming Regulations of the Federal Law on Games and Raffles not only expressly authorizes taking bets via the internet, but also dedicates an entire chapter to what is known as remote betting centers. "In addition, the Gaming Regulation mentions various types of licensing for the operation of games betting that, in our opinion, is by no means limited exclusively to in-person operation," added Avedillo Builla, who is part of the Alfredo Lazcano study.

The lawyer acknowledged that the Gaming Regulation published in 2004 and last amended in 2013 needed to be updated. "This situation does not escape the view of the various legislators who have presented reform initiatives, to the current head of the Mexican Secretariat for Home Affairs (Segob) or to the current head of the General Directorate of Games and Raffles, who reported their intention to submit to the Mexican Congress a bill for a new gaming law," she added.

“Year after year, the gaming and betting sector is evolving and discovering the ins and outs of its digital revolution. The contemporaries who have seen its rapid integration into the .com want to participate in the drafting of laws that protect each of the parts involved in the industry," commented sources from the Public Relations department of Caliente Interactive, one of the major operators in Mexico.

"Our legal and ethical framework prevents us from generating promotions, giving credit or cashback to users to encourage conversion to our platforms," the company mentioned when pointing out the difference with illegal operators. Therefore, its executives consider that the country should follow the example of a pioneer in the region: “The case of Colombia is a breakthrough in the Latin American gambling and betting sector that is worth reviewing. Our brothers have managed to create a viable and healthy ecosystem for their economy.”

PANAMA

The Government published a resolution in March last year that regulated online sports betting and gambling. “Caliente.pa will be operating in a very short time with the Playtech platform, analysis and tests are already being carried out and we estimate that after February 17 they will start taking sports bets, little by little we will have our country's first legal online gambling operator,” anticipated —in an interview with YogonetManuel Sánchez, director of the Panama Gaming Control Board (JCJ, in Spanish).

On that same occasion, he said that other renowned operators would enter the market: “There are already several applications in process at the JCJ, from very important operators, such as Sportium and Codere among others, that are meeting the necessary requirements to also obtain their permits and licenses.” The Caliente and Codere platforms are already operational.

PARAGUAY

Law 1016/97, which regulates gambling, includes sports betting but not online gambling. Therefore, to keep up with the technological advances, several decrees were issued.

"All games not considered in the regulations are ruled by adjustments and transitory permits that are issued by decrees and resolutions of the Comision Nacional de Juegos de Azar (Conajzar, the national regulator of gambling). Based on the stated in the Decrees 6206/99 and 3083/2015 and the Resolution 01/2019 of the Conajzar, permits were granted for the exploitation of online casinos without the possibility of sports betting," said Raymundo Aquino, partner and Director of Operations of Il Palazzo.

At first, these permits were only issued to operators who already had physical casino licenses. Then the scope was expanded. The Amambay Casino, which proclaims itself as the first online casino in Paraguay, began operating in 2018 and since then about twenty other licenses have been issued, all on temporary basis: they can be terminated or modified in the event that a new law is approved. Aquino clarified that nowadays the authority is not issuing more permits.

Daruma Sam, a company that manages the Aposta.la brand, has had a monopoly on sports betting since 2018 on both in-person and online modalities. This monopoly is questioned by the companies Yem, La Cima and Par de Ases.

PERU

The companies operate sports betting and games because “everything that is not expressly prohibited is allowed,” as established in the Magna Carta. "That means that we can operate, hire staff, pay corporate taxes and open bank accounts, having as the only special regulation the implementation of a system for the prevention of money laundering and terrorist financing, as regulated entities," said Apuesta's CEO Total, Gonzalo Pérez.

He recalled that in recent years several bills were presented (including one promoted by the Fuerza Popular party, another by Leyla Chihuán Ramos from the same political group, and another by Walter Ascona). "The reality is that operators are eager for a modern regulation that may give stability to the industry," said Pérez, who added that there are talks to consider a special tax that would be between 10% and 12%, and although there's been no further progress, perhaps the economic impact that the coronavirus had and the need to raise revenue might bring about new measurements this year.

PUERTO RICO

"When the 2021 Season of Major League Baseball begins in the United States, there will be sports betting in Puerto Rico," stated Orlando Rivera in his first interview with Yogonet as executive director of the Gaming Commission. The Gambling Commission Law, which regulates betting on sporting events, electronic games and fantasy contests, was signed in July 2019. Later on, they worked on its enforcement rules. However, in December 2020 - still during the administration of José Maymó Azize heading the Gaming Commission - amendments were made that required a new regulation. This is where the delay occurred. 

Despite Rivera's initial intention, the amended regulation only managed to enter the public hearing period on April 5. Once this 30-day stage is completed, the regulation will go to the State Department, where it has one more month. He said: “I hope to be in a position to receive the applications from the operators at the beginning of June. From there, I estimate that in one or two more months, July or August, the market will be operational." 

DraftKings, FanDuel, Playtech and Betcris, among other companies, want to invest on the island. Initially adept at granting a maximum of four licenses, Rivera now embraces the idea of opening the market so that it can move according to its own needs.

THE DOMINICAN REPUBLIC 

The Dominican legal universe of gambling is made up of four websites, 25,000 lottery agents, more than 1,800 sports betting agencies and 60 land-based casinos. Online gambling began in 2006 with Law 494-06, in which the third article gives free rein for four companies to operate under the .do domain.

This data was provided by Félix Arburola, Operations Manager of the omnichannel betting platform SuperBets, who added: “We understand that the Government is going to start issuing online gambling licenses again, but by each line of business: one for sports, another for casino, etc. This will cause a change in the competition. However, our greatest interest is to show that we are the best and that in a very short time we have reached companies that have already been in the country for more than ten years, and this is due to our service focused on our customers as well as our gaming offer."

URUGUAY 

Supermatch, the only authorized sports betting site, has been operating since 2005 and depends on the National Department of Lotteries and Pools (DNLQ). Playing in a casino or poker room is prohibited. The Banca Juegos Oficiales commercializes online products of both betting and lotteries, but is not authorized to operate online casinos. 

“The lack of a regulation that allows operating online casino games in the country has caused thousands of Uruguayans to continue gambling in offshore sites. To evade the controls imposed by the regulator, they resort to software tools that allow them to establish a different IP address and thus access said sites without being detected,” commented specialized consultant Juan Ignacio Juanena.

The government headed by Luis Lacalle Pou showed interest in regulating this industry. "We hope that it can advance for the common good of all," said Juanena. "The regulation would allow us to modernize an industry that cries out for help, to generate income and maintain thousands of jobs for employees who are unable to perform their function in physical rooms due to the pandemic," he said.

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