Navigating Growth in Latin America’s Gambling Sector: A Call for Balanced Regulation
As Latin America emerges as one of the most promising regions for gambling, industry leaders stress the importance of allowing market growth before imposing stringent regulations.
Laura Maria Gomez Betancur, the compliance chief at Stake, has voiced her concerns regarding the current regulatory landscape in Latin American markets like Brazil and Peru. While the region is buzzing with potential, issues such as increased taxation and advertising restrictions threaten its development.
This year, Brazil’s launch of a regulated online gambling market has garnered substantial media attention, following a similar move by Peru last year. However, both countries now face regulatory challenges that could stifle their nascent markets. For instance, Peru has introduced a new consumption tax, while Brazil has proposed increasing its gambling tax and implementing stricter advertising regulations.
Gomez advocates for a measured approach from regulators, emphasizing the need for stability as a foundation for industry growth. “What we need is a stable framework that allows companies to thrive,” she stated. “Regulations are not always perfect, and adjustments will be necessary, but it’s crucial for regulators to observe market dynamics before jumping to conclusions.”
The Perils of Overregulation
One of Gomez’s primary concerns is the risk of overregulation, which may inadvertently drive operators and players into the black market. Brazil’s recent decision to raise its tax rate from 12% to 18% has raised alarms within the industry, prompting major trade organizations to warn of the potential for increased illegal gambling activities.
“Overregulating can backfire,” Gomez cautioned. “It’s essential for regulators to engage with operators to truly understand their concerns and the marketplace before implementing sweeping changes.”
She praised Peru’s Mincetur for its collaborative efforts with gaming operators and hopes to see similar engagement from Brazil’s Secretariat of Prizes and Bets. “We want to establish a dialogue where we can present best practices and seek solutions together,” Gomez added.
Adapting to KYC Regulations in Brazil
The initial phase following Brazil’s new regulations saw operators struggling with the transition to licensed platforms, particularly regarding Know Your Customer (KYC) processes. Many players found it challenging to grasp the necessity of practices like facial recognition technology.
“Initially, there was a lot of apprehension about data privacy,” Gomez explained. “We reassured customers that KYC measures are in place to protect their accounts and verify identities.” This educational approach has become a priority for Stake, as the company strives to ease customers’ fears and comply with regulations effectively.
Gomez is proactive in developing guidelines to help internal teams better communicate these processes to players, underscoring the critical nature of identity verification in online gambling.
Optimism for the Future of Latin America
Despite the regulatory hurdles, Gomez remains optimistic about the future of gambling in Latin America. “This region is set for tremendous growth; it’s undoubtedly the place to be in comparison to more established markets,” she stated. “The opportunity to cultivate fresh relationships with regulators and build a solid reputation is what makes this market particularly exciting.”
Gomez envisions a landscape where the gambling sector can flourish through stability and regulatory collaboration, ultimately benefiting not just operators but also players across the region.