Episode 3: Brazil: A focus on the regulatory outlook
We’ve come to the last episode of the series “LATAM: Technological and regulatory focus” throughout which we have made an overview of the mobile and internet penetration in the Latin American region. During this last episode, we will focus on the Brazilian iGaming regulatory framework.
Many consider Latin America as the ‘sleeping giant’ when it comes to the iGaming and sports betting industries. In fact, the Latin American region together with the African region are taken to be the next big markets in the online betting scene.
A look at the internet and mobile penetration in LATAM
As of 2018, Latin America is the fourth on the list of regions by the number of worldwide internet users, with Asia holding the first place, followed by Europe, and Africa, at the second and third place. This statistical data, directly influences the Latin American gaming market as internet penetration is tightly connected with the gambling industry.
In addition, when it comes to mobile penetration, the total number of smartphone users in Latin America is expected to reach 317 million by 2020 and 347 million by 2021, which is another catalyst for progress in the gaming industry in Latam.
As things are evolving with this pace, different countries in the Latin American region, are making even more efforts to adopt a stable and effective regulatory framework and ensure a safe and trustworthy gaming scenario. In this relation, Buenos Aires just got regulated which adds to the potential that this province offers, whilst Brazil is also legalizing sports betting market for the first time.
No wonder that various operators seeking to expand their businesses in Latam are of the belief that “The Latam online market is going to be hugely transformed in the next few years, and we are ready to meet the necessities of all operators in the region”.
Brazil to take a big step forward
Sports betting has officially become legal in Brazil, as of December 12th, after President Michel Temer, signed the bill which formally allows online and land-based sports betting on the territory.
Until this date, gambling has been illegal on the nation’s territory and Brazil had very restricted market regulations. Therefore, with this new legislation, Brazil has made a big step towards legalizing sports betting. President Michel Temer’s approval of this legislation is expected to open up a very promising betting market for international operators who expect the Brazilian gambling market to be at the forefront of the Latam sports betting scenario in terms of potential.
Having approved the law, the Ministry of Finance has now been given a two-year deadline to further develop the details around the implementation of the legislation, such as technical regulations and the number of licensees that would be issued.
In the meantime, a tax structure has been proposed which will require land-based operators to pay 80% of amounts wagered back to players as winnings and retain a maximum of 14% profit, while online operators are set to pay out 89% of wagers as winnings and retain a maximum of 8% profit.
With this episode, we are putting an end to the second series focusing on Latam’s technological and regulatory focus.
The next series will treat the subject of how technological service providers could uberize the iGaming industry. In the meantime, to have a better insight into the potential that Brazil and the Latam region keeps in hold, download our latest industry report “Uberizing iGaming with a glocal approach”.