What’s the Status of LatAm Markets in 2023?
Emerging markets in LatAm have dominated the conversation in the iGaming industry for the last few years. Towards the end of 2023, we can see that the region’s ‘sleeping giants’ have begun to awaken. Slotegrator, a leading software and business solution provider, and Amigo Gaming, a game studio, share their expert opinions on what’s changed in 2023 and share some insights for 2024.
In 2023, the Latin American online gambling market was valued at nearly US$ 11.80 billion. By 2029, it is predicted that the market will grow to reach USD $14.75 billion. In the face of such rapid and massive growth, it’s important to enter the market sooner rather than later, before it becomes oversaturated.
At the moment, it’s hard to imagine an iGaming brand which doesn’t want to expand in LatAm. Large populations, a widespread passion for sports, and a cultural acceptance of betting as a pastime make Latin American countries some of the world’s most attractive markets.
‘When entering Latin American markets, it’s important to be aware of any changes in regulation and what the local players’ game preferences are. For smooth and successful operation, it’s important to comply with all local regulations and satisfy people’s appetites. In Latin America (especially top countries like Brazil, Uruguay, Mexico, Peru, Colombia), it’s important to comply with gaming standards because sport and everything that goes with it has tremendous cultural importance”, says Ayvar Gabidullin, Business Development Manager at Slotegrator.
This year saw several changes in gambling regulations
- Brazil enacted a provisional measure to regulate sports betting.
- Mexico is struggling to rein in the countries’ gray market, but in the next three years, the market is expected to grow by 33%.
- Peruvian regulators have big plans to charge more from iGaming companies – at least three times more than originally planned. The industry may see the finalization of the process before the end of 2023.
- In Columbia, there will be a new set of regulations intended to combat problem gambling by requiring online operators to, among other things, detect risky behavior and display warning messages, and enable players to exclude themselves and limit their deposits.
- In Uruguay, a proposed online gambling bill has been criticized.
Considering the changes that have taken place this year, Slotegrator decided to ask its partner, game studio Amigo Gaming, about the situation in the Brazilian market. Below is a short but insightful interview with Igor Rus, Chief Amigo.
Slotegrator: In your opinion, how will gambling in Brazil develop in the next few years, considering the new measures? Is it the crucial step to the regulated gambling market here?
Igor Rus: Understanding the market is probably the only way to implement future regulation as well in what is considered responsible gambling. The way to address the new area of regulation is probably to check successful regulations and talk to industry stakeholders and labs, but in the end, design a framework that would suit the country’s needs in different areas like the economy, social impact, consumer protection, tax optimization, employment, technology, and innovation.
S: Under the new regulations, companies will be subject to an 18% tax on Gross Gaming Revenue (GGR). Is this common for new markets, or will it create a barrier for development?
IR: The issue of determining a fair share of taxes in the gambling industry stimulates significant debate, with diverse opinions on what constitutes an appropriate level.
The interests of various stakeholders are at the core of this discussion, followed closely by the need to create enticing incentives like bonuses for players to entertain themselves on licensed websites.
If the tax burden becomes too high, players are more likely to choose alternatives outside the sphere of regulated operators. The right balance in taxation is crucial to maintain a competitive environment and ensure that players remain in the regulated market. I believe that the government made some analysis on how such a tax will affect the collection and came up with a solution that will benefit the country the most.
I hope that Brazilians will not follow examples from some of the mature European countries that raise the taxes when there is a fall out in a budget, not considering the impact on the overall industry.
S: The law establishes a self-regulatory framework in this area. Gambling businesses are expected to comply with the National Council for Advertising Self-Regulation (CONAR) standards. Is it a good idea?
IR: The self-regulatory framework is a very fragile system that has to be built on trust between stakeholders and government. I believe that strong standards need to be created and open channels of communication need to be implemented. Most importantly, established laws must be enforced in practice in order for this kind of policy to work.