Following 2020’s disrupted proceedings, leadership eyes have turned to 2021 to see whether LatAm governments will finally deliver on their regulated market agendas for sports betting.
As part of an evening deep dive on LatAm’s regulatory roadmap and political developments Kristal Rovira, Research Director of Americas for VIXIO, asked the panel whether any legislative progress has been achieved during 2020.
Branding himself as an ‘optimist’, Witoldo Hendrich Jùnior, Founding Partner of Brazilian law firm Hendrich Advogados, stated that “gambling has finally been placed on the ‘Agenda Brasil’ – becoming a key economic mandate for congress to deliver on”.
Hendrich pointed to last month’s confirmation by the Brazilian government that social development bank BNDES would spearhead the development of the market’s legislative and regulatory frameworks.
“They are creating the same path as LOTEX (Brazil’s state-owned lottery operator),” Hendrich said. “BNDES will be tasked with creating a programme that finds the best solution to open the market.”
Prior to the appointment of BNDES, Hendrich noted that Brazil’s government agencies had failed to reach any legislative consensus on key conditions related to taxation, licensing concessions and monitoring frameworks.
He added: “What BNDES is going to do is show to the government, what is the best environment, the best rules, practices, what needs to be changed and how activities can be regulated to make sure Brazil has a safe gambling marketplace for the future.”
However, despite his positive tone, Hendrich underlined that Brazil is still very much in phase one of its regulatory process. Furthermore, any BNDES recommendations will be put to the government and congress to pass into law.
Probed on the dreaded question of timeframes, Hendrich answered: “From 2021, I believe that phase-1 of BNDES programme will be delivered within 7-to-8 months, but I’m an optimist, I have friends who are closer to congress and they believe that this could be delivered by the second semester of 2022.”
Whilst Brazil’s 2021 outlook gains some form of clarity, Argentine proceedings remain blurred as a gambling regulation remains split between Province and City jurisdictional dynamics.
Tomás García Botta, Partner of MF Estudio, explained: “The Province of Buenos Aires, passed their legislation in January 2019 and unlike Brazil it held a tender which had 14 applicants that filed business proposals, competing for seven licences to be awarded by the authorities.
“Meanwhile, The City of Buenos Aire on the other hand has taken a different approach, placing much lower financial requirements. It is reported that five companies have filed for applications.”
García Botta noted that BA Province’s framework has been altered to include local enterprises, forming joint-ventures with international operators as a fixed requirement by the legislator.
The Argentine situation is further complicated as smaller provinces and cities replicate BA’s unspecified frameworks. “Where BA goes, others tend to follow,” he explained.
Nevertheless, García Botta remained pessimistic of BA’s split approach, which will only lead to a segregated and unappealing foundation for Argentine gambling, adjudicated by under-resourced local governments.
“A big question remains on what will happen if a smaller province or city opens up to gambling before BA does,” said García Botta – a situation which may see a federal intervention.
“You cannot have a market, where one operator is paying a tax rate of 30% in one province, but 41.4% within a city’s premises, there are many things that need to be fixed between the regulators.”
Sharing common LATAM frustrations, Gonzalo Pérez, CEO of Peruvian sports betting operator Apuesta Total, pointed out that Peruvian market incumbents had been waiting for two years on congress to finally implement the mandate of the approved online gambling framework.
Congress standstill had left the market operating in a grey zone, where the Peruvian market has seen a new online sportsbook launched every month – subsequently targeting consumers quite aggressively.
He continued: “Here we have a strange situation, where the government knows how things should be, but they don’t have the will power to sanction the bill! Online gambling has therefore been left to Congress.
“This year, Peru hosts a short congress as it’s an election year, so Congress is prioritising populist laws that will appeal to the public before the economy.”
Pérez concluded: “I prefer for Congress to not even review the online gambling bill, as we don’t know what the outcome will be and how situations may change this year”.
Following blunt assessments of Argentina and Peru, the panel turned to LatAm’s shining light Colombia, where Rodrigo Afanador, CEO of Zamba.co, believes the market maturity will see Colombian sports betting enter the next stage of its development.
Against the scepticism of other LatAm markets, Afanador stated that the Colombian government and regulatory agency ColJuegos ‘from the start always took the duties of regulating sports betting seriously’.
He continued: “It is the opposite to Gonzalo, I believe that sports betting was taken as a big deal for Colombia, allowing a population of 50 million to wager on sports, which did carry the old taboo of casinos.”
Afanador praised the work of ColJuegos, stating that the regulator had researched effective European safeguards when establishing the market’s original foundations – a factor proven by the continued growth of all 14 licensed Colombian licensed sportsbooks.
Moving forward, Afanador added that Colombia’s next regulatory directives should be geared towards eradicating the black market: “The market is still under construction and it has a lot of learning to do,” he admitted. “There are still black-market companies targeting consumers.”
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