Pulse
LatAm Sports Betting: what can we expect?
By William - 3 March 2022
Big changes are on the way in the Latin America sports betting market. There are only a few markets where there has been little to no significant developments over the last year and government willingness to open up the market has extended not only to large markets but smaller jurisdictions as well.
The liberalisation of sports betting in Latin America is further evidence that Colombia’s successful roll of the industry has had a hugely positive impact on the region.
Governments are finally (albeit reluctantly) letting go of sports betting monopolies while an ever growing number of sponsorship deals with top football clubs and leagues means that sports betting’s visibility in the mainstream media is growing at a fast pace.
So what have been the major changes over the last year and what can we expect to see in the ever evolving Latin American sports market in the coming months?
ARGENTINA
Buenos Aires Province and the Autonomous City of Buenos Aires are the two most populous areas of Argentina. Gambling is regulated by each jurisdiction separately. A total of 14 companies were scheduled to contend for the seven online gambling licences for the province of Buenos Aires.
International interest was high with a number of well known online operators teamed up with local companies in order to make a bid. Governor Axel Kicillof ultimately granted licences to seven companies to operate online gambling with the news published in the Provincial Official Gazette on the last day of 2020. Companies had to present themselves in groups, one international together with one local company.
In August 202,1 the Government of the Province of Buenos Aires signed four of the seven licences it granted for online gaming in its territory. BetWarrior (made up of local bingo operator Binbaires and Intralot), Bplay (local gaming company Boldt Group and 888), William Hill (local bingo operator Bingo Moreno and William Hill), and Bet365 (Bet365 and local bingo operator Bingo Berazategui) were given permission to operate in the province. There are three more companies authorised to operate in the Province of Buenos Aires, which have still yet to sign their licences: Playtech, PokerStars and Betsson. All three have also formed partnerships with local land based operators.
Other companies are beginning to take their first steps in the capital. Jugadón (GrupoSlotsS.A and Gaming Innovation Group GiG); Bplay, Super7 (Grupo Ivisa de Argentina), BetWarrior and Codere.
Codere has long been a market leader in Argentina and has weathered out some of Argentina’s most turbulent economic times. It is already making its presence felt via football. Ahead of its online launch in Buenos Aires, Codere reached a jersey sponsorship agreement with one of Argentina’s most popular football clubs: River Plate. The deal comes into effect in August and will run until the 2024/25 season. Codere has been present in Argentina since 1992, currently operating thirteen bingo halls and slot machines located in important districts of Greater Buenos Aires and in the city of Mar del Plata.
Sports betting companies are making their presence felt in other clubs too. Bplay now sponsors top football clubs: Estudiantes de la Plata in the capital of Buenos Aires and Club Atlético Vélez based in Liniers, Buenos Aires.
Meanwhile online gambling in Argentina is regulated on a province by province basis. Overall, there is a shift towards online regulation. In January, the Argentine province of Córdoba approved an online gambling bill. The next step will be the regulation of the proposal by the Executive Power, although the ruling party is already believed to be in favour of the new measure. If approved the bill will allow for online lotteries, casinos and sports betting by as many as ten operators who will vie for a licence via a tender. Licences will be valid for 15 years and the Córdoba Lottery may expand the number of operators if the market grows.
In October 2020, the government of Mendoza approved online gambling bill. Seven licences will be allowed. The bidders must be located in the province and unlicensed operators will be blocked through requests to the National Communications Agency (Ena. com). Online gambling is already also permitted in the provinces of Santa Fe, Corrientes, Chaco, Misiones, San Luis, Tucumán, Entre Ríos, La Pampa, Neuquén, Río Negro and Santa Cruz.
However, most offer only a limited offer of online casino games and sportsbetting is often excluded from regulations. Indeed, land-based sports betting shops are still not permitted by the vast majority of provinces with only a limited offer of off track horse race betting. Unfortunately for now it looks like Argentina is closed to any kind of land based sports betting expansion in the short term.
The growth of online sports betting in Buenos Aires, plus increasing visibility of sports betting sponsorship of top clubs based in Buenos Aires, will in all likelihood see an expansion of online sports betting going forwards.
BRAZIL
Particularly hard hit by of COVID-19, the government has had to postpone the drafting of its sports betting rules but there is growing speculation that they could be permitted by the beginning of this year’s FIFA World Cup. Either way, it has been a long and extremely complex process as the industry has been waiting fr almost three years for regulation.
Sports Betting Bill 846/2018
In December 2018, President Michel Temer signed Bill 846/2018 into law to regulate land- based and interactive sportsbetting. The Ministry of Finance was granted two years to establish a regulatory framework to govern the market and provide for licences. In February 2020, Brazil’s Secretariat of Evaluation, Planning, Energy and Lottery (SECAP) launched a third consultation on fixed-odds sports betting, calling for public comments. In November last year, the head of SECAP Gustavo Guimarães stated that SECAP was working on several different fronts in order to ensure that the privatisation of sports betting went ahead of the FIFA World Cup Qatar 2022. But this is not the only way that sports betting could be given the green light.
Via State Governments
Local state governments are now rolling out online and land-based sports betting, which are bizarrely categorised as “sports lotteries’ under Brazil’s latest sports betting laws. In September 2020, the Supreme Court of Brazil (STF) ruled that the federal government’s lottery monopoly was unconstitutional, paving the way for states to develop state lotteries for each of Brazil’s 26 states and one federal district as long as they complied with federal regulations.
The decision means that current operators can extend their offerings while states can begin to roll out their own lottery products within their own state borders.
Many states have issued requests for proposal (RFP) to identify qualified firms that would meet the essential requirements to develop and offer sports betting. This includes the State of Rio de Janeiro (although the tender suspended for now). Other states such as Rio Grande do Sul and Maranhão have launched preliminary studies and public consultations into launching sports betting. Similar moves are underway in the state of Amazonas and in July the state of São Paulo announced the call for applications for sports betting.
Via the Supreme Court (STF)
There is a highly significant pending decision that that could allow for gambling in The Supreme Court (STF). The appeal argues that a 1941 Presidential decree which banned gambling as part of Brazil’s “Criminal Contravention Act,” violated principles laid out in the 1988 Constitution. If the STF decides that the decree is unconstitutional, gambling will not be a misdemeanour anymore meaning that each state could use the STF’s decision to draw up its own gambling regulations.
Lawyers in charge of defending the appeal, which would decriminalise gambling, asked the STF to include the appeal on its agenda as soon as possible. Consideration of the issue should have taken place on 7 April 2021 but the decision was delayed as the court did not have time to consider the matter. However, in December the President of the STF, Minister Luiz Fux, announced that the court would announce its decision in April 2022. The Brazilian constitution was rewritten in 1988 after civilian rule returned to Brazil and sought to guarantee individual rights.
Via an Updated Gambling Bill
In December, The Chamber of Deputies approved the request to deal with bill PL 442/91, which legalises casino and other types of gambling in the country as a matter of urgency. The motion was passed after President of the Chamber of Deputies, Arthur Lira, held meetings and negotiated between the leaders of different political groups.
Lira announced that Gambling Bill PL 442/91 would be debated in the House of Deputies in February 2022. Legislators were able to submit amendments to the bill before this deadline. Sports betting is covered in the new bill, however, the exact rules for each type of game were not established nor were licence fees or taxes.
Outlook
In all likelihood the SECAP bill will regulate the sports industry on a federal level while states will roll out their own limited and more localised sportsbetting options overtime. According to government calculations, the regulated sports betting market could hit Rs. $20bn annually as early as 2026.
Meanwhile, the presence of betting companies via football sponsorship has been increasing steadily over the last few years. According to a report published by the research firm IBOPE Repucom in January, betting companies now make up the largest number of main sponsors for top football clubs which is quite a feet considering the fact that it is not yet legal.
CHILE
Online gaming is expressly banned under Chile’s gaming laws of 2005. However for now any Chilean can place bets on international online betting sites, as long as these are not based in the country, and may do so without being sanctioned by law. Chile has been moving towards allowing online gambling for some time.
In July 2019, the Head of the Chilean Gaming control Board (SJC), Vivien Villagrán Acuña, said that there were a number of proposals on the table to legislate online gambling. Villagrán Acuña used the United Kingdom and Colombia as examples of two countries with good regulations in place.
In July 2021, The Ministry of Finance of Chile reported that it had prepared a draft regulation for online gambling and sports betting. Although it anticipated that debate on the issue would occur over the next weeks this proved not to be the case and debate is still pending. According to the Ministry of Finance, the project would establish “a competitive and transparent online betting market, protecting the health and safety of the players who take part in it.”
The bill is thought to have cross party consensus. Meanwhile, just like other jurisdictions, sports betting companies are signing deals with major football clubs.
In January 2022, the Club Deportivo Universidad de Chile announced that the Betano sportsbook would be the new main sponsor of its men’s and women’s teams in an agreement that will be in place for the next three years. In addition to the brand appearing on the jerseys of both main teams, the online gaming operator Kaizen Gaming will become the Chilean first division club’s “Main Partner” as well.
In the same month, Betsson Group signed a one-year sponsorship agreement with Colo Colo one of the top clubs in Chilean football. Betsson is also the digital betting partner of the Chilean National Football Team.
In addition, land-based sports betting shops are still not permitted under Chilean law. Instead, the lottery Polla Chilena runs a number of sports betting games such as Xperto which is also available online. As is the case in Argentina, an expansion of sports betting shops looks unlikely for now. The government is focusing on online sports betting regulation for now.
COLOMBIA
Coljuegos has gradually begun to liberalise the market and has increased the number of products on offer in the territory including Pari- mutuel sports betting which went live for the first time in Colombia in 2014. In-play betting is also permitted. In 2019, Coljuegos issued a statement to the effect that eSports may be offered as part of the non-sports real events product, available under the online licence.
Colombia put in place regulations for online- based gaming in 2016. Today, online sports betting accounts for around eight per cent of the market with foreign operators making up almost the entire online gambling sector. Investors have been encouraged by a clear set of rules when it comes to entering the Colombian market, and reasonable tax rates (sport, horserace and virtual betting are taxed at 17 per cent of gross turnover minus VAT and players are not taxed on their winnings).
There are now 18 licensed sports betting sites in Colombia and around 3.8 million active player online accounts. The presence of leading international bookmakers has continued to drive the industry forward. In May 2021 (following the acquisition of a majority stake in the Colombia licensed operator Alfabet S.A.S in December 2020), WilliamHill.co was launched, making Colombia its first entry in the Latin American market.
Meanwhile, Betfair, part of Flutter Entertainment plc, launched its online sports betting and gaming products in February 2021. Betfair already has a significant presence in South American football as an official sponsor of the two main CONMEBOL annual tournaments: Copa Sudamericana and Copa Libertadores.
In addition, Everton Football Club signed a deal with Rushbet.co in December in order to capitalise on the presence of national football players James Rodriguez and Yerry Mina in the team. The multi-year agreement will see the gaming brand become Everton’s ‘Official Betting Partner in Colombia.’ The partnership sees Everton continue to build on the club’s growing profile in South America. Rush Street Interactive is the first US-based company to open an online gaming website in Colombia.
Arguably the biggest sports betting sponsor in Colombia is BetPlay. In January 2020, Dimayor, the governing authority of Colombian football’s top two professional football leagues, secured a four-year sponsorship agreement with the company –the sportsbook arm of Colombian gambling group Corredor Empresarial.
In January 2022, the NBA also struck a multi-year partnership with BetPlay. The agreement will see the pair provide gaming experiences, promotions, products and content for NBA fans in the country across BetPlay’s retail and online offerings.
COSTA RICA
In March 2021, The Loteria Nacional de Costa Rica announced that it would open the licensing process for sports betting along with a number of different other types of online games including online casino games and number games as part of a pilot programme for one year.
The JPS is run by the Junta de Proteccion Social (JPS) and is a social welfare group which operates the lottery and other games of chance, including instants. The JPS said that it would grant licences to both foreign and domestic companies to operate sports betting as part of a pilot programme for one year. Licences will be granted after a public tender.
EL SALVADOR
In December 2021, El Salvador’s Ministry of Finance presented a new law to the Legislative Assembly which would give the National Lottery (Lotería Nacional de Beneficencia de El Salvador) the right to both oversee and run sports betting and online casino games nationwide.
If approved, the new law will give the LNB permission to authorise third-parties to operate sports betting by means of a permit, licence, agreement, contract, concession, or public-private partnership.
The legislation would provide the LNB with the ability to regulate, monitor, supervise, organise and run the new games via a third party. Licences will be valid for a 10 year period. Fees have yet to be determined by the Lottery’s board of directors.
MEXICO
Mexico has permitted sports betting since 2005 due to the amendment to Mexico’s 1947 gaming laws which allowed The Ministry of the Interior (SEGOB) to grant gaming licences. Since then, sports betting has spread quickly and sports betting shops are often part of much larger gaming establishments.
Online gaming has been permitted via special licence in Mexico since 2000, but only land based operators have been allowed to offer their services locally.
President López Obrador, who was elected in 2018, announced that during his six year term no new licences would be granted to open any new casinos in Mexico. He has repeated this claim a number of times since then. Meanwhile, states have granted their own licences, initiated new regulations on a state level and increased taxes.
While the President is against casino gambling expansion, sports betting and gambling reform is currently on the agenda of the President’s ruling National Regeneration Movement (Morena) party.
In January 2020, a member of the Morena Party, Ulises Murguía Soto, put forward an initiative to allow for online gambling.
In justifying the need for change, the legislator explained that online gambling sites were taking advantage of existing loopholes, meaning that players were uncertain whether the site where they were playing was entirely legal and above board. Under the initiative SEGOB would authorise gambling and online gambling sites.
In May 2021, another member of the Morena Party, Congressman Erik Isaac Morales Elvira, presented a much wider proposal to expand the regulation of sports betting. The initiative would reform the 1947 gaming laws and would give SEGOB the power to regulate the sports betting industry.
A committee is now analysing the proposal. The initiative states that due to the uncertainty caused by obsolete legislation very few online casinos are licensed by the government and the gaming industry in Mexico “is lagging behind.”
According to estimates from the Association of Licensees, Operators and Suppliers of the Entertainment and Gambling Industry in Mexico (AIEJA) (data which is quoted in the proposal), sports betting has become a growing industry and currently generates around 8,430 million pesos per year made mainly via offshore betting sites.
In addition, the proposal states that online sports betting in Mexico could grow between 25 per cent and 30 per cent per year over the next six or seven years. At the same time, sports betting is also increasingly visible via sponsorship deals in Mexico. Over half of the football teams that make up the top flight of Mexican football are now sponsored by betting companies.
PERU
Peru was the first jurisdiction to allow for online sports betting in Latin America, granting Betsson Peru a licence top operate as far back as 2008. Even though the market is fairly developed for now, sports betting shops are permitted via municipal licence and there is no specific authority that regulates them.
The private sector has the right to enter the market as long as the company adheres to Peru’s Civil code and the terms of their licence as granted to them by the municipal government in the locations where they are licensed. There are around 30 sports betting companies that operate in the country in accordance with local gaming laws.
Rules look set to change soon among growing impetus to place more federal control over the industry. Locally based sports betting operators such as Betsson, Te Apuesto and Inkabet have created an organisation called APADELA which is lobbying for a code of ethics, stricter rules against money laundering, self-exclusion programmes and more measures aimed to protect the integrity of sports. New regulations are undoubtedly needed as sports betting via offshore sites stands at around US$450m per year.
In 2018, Congress took a first step to regulate online sports betting in Peru after congresswoman Leyla Chihuán proposed updating sports betting laws so that they covered online sports betting. In 2021, Congressman Walter Ascona proposed a bill to regulate the payment of taxes from sports betting and invest the additional funds in associations to help with gambling related harm and promote sports.
Meanwhile, locally licensed sports betting is seeing a steady expansion with the number of physical sports betting outlets on the rise coupled with an increasingly visible online offer via sports sponsorship deals and advertising. In February 2021, Betsson secured naming rights to Peru’s top tier of professional football Liga 1 in Peru.
Under the terms of the agreement, the graphic representations of the Peruvian championship will feature Betsson’s logo, both in the visual materials, on the digital platforms, as well as in the corporate identity of the Liga 1 which will now be known as Liga 1 Betsson.
Solbet, Doradobet, among other brands, are also present in football, sponsoring famous teams such as Universitario de Deportes and Club Sporting Cristal S.A both located in the city of Lima. In January, DoradoBet and Sporting Cristal extended their sponsorship agreement until 2024.
PUERTO RICO
Spurred on by regulatory changes in the wake of the overturn of PASPA in the US, Puerto Rico has finally opened the way for landbased sportsbooks and online sports betting where the newly regulated sports betting industry could bring in between US$44m and US$66m per year.
The Betting Committee Act of the Government of Puerto Rico was signed into law in July 2019 by the outgoing governor and will allow for both new large scale sports betting operations and smaller establishments. Bets may be placed at any place authorised by the Commission, such as casinos, racetracks, hotels and hostels, amongst other locations.
The Act regulated sports betting and created a gambling commission to oversee all sports betting (The Puerto Rico Gaming Commission). It also set out a government policy for both landbased and online gaming, including sports betting, electronic game leagues and fantasy contests.
In March 2021, House Representative José Rivera Madera filed resolution RC 319 to initiate a study into the potential size and scope of the sports betting and eSports betting market in the country. In June, a sports betting group was founded in Puerto Rico by Governor Pedro Pierlusi to accelerate the launch of sports betting and fantasy sports.
In November, Puerto Rico’s Gaming Commission announced that it had submitted Sports Betting Regulation Number 9316 and Fantasy Contest Regulation Number 9317 to the State Department. The new regulations are part of Law 81 2019 The Betting Committee Act. Both bills went into effect in November.
As a result of the two new regulations the commission announced that it would be authorised to begin the evaluation processes for those wanting to offer sports betting and fantasy sports on November 22.
A number of operators are already making a move into the market depending upon regulatory approval. In September 2021, MGM and Casino del Mar at La Concha Resort announced that they had agreed to a deal that would see BetMGM open a sportsbook at the resort’s casino as well as offer online sports wagering across the island. If its licence is approved, BetMGM said it would expand its retail and mobile sports betting offerings to Puerto Rico.
In November, International Game Technology (IGT) announced that it had expanded into Puerto Rico sports betting via a multi-year PlaySports technology and services agreement with The Stadium LLC.
The Stadium LLC owns and operates WinIn, a Puerto-Rico based entertainment company that has partnerships with leading eSports companies and the top baseball league in the region, Liga de Béisbol Profesional Roberto Clemente, that plans to expand into the recently regulated sports betting market in Puerto Rico.
