|sbcamericas talks to specialist gaming lawyer Alfredo Lazcano of Mexico-based law firm Lazcano Samano about Latin America and how the gaming landscape is taking shape there.
Can you give sbcamericas a brief summary of how each of the key LatAm gaming markets are currently performing?
The LatAm market is a substantial region of the world, integrated by 20 different countries, and where approximately 640 million people live. In order to exemplify how big and diverse is LatAm, we can compare it with the European Union (EU) which is compound by 28 member states and has an estimated population of 510 million. Based on the above, we would dare to affirm that LatAm is practically as large and multicultural as the EU.
Traditionally, for several years the major LatAm jurisdictions where gaming has been openly allowed and regulated with an acceptable level of stability are: Mexico (124 million), Colombia (49.5 million), Argentina (44 million), Perú (32 million), Chile (17.5 million) and Panamá (4 million). To date, these same jurisdictions have continued evolving to regulate a wide range of gaming activities, including online gambling.
More recently, other important LatAm jurisdictions have shown positive tendencies aimed to legalise gaming for the first time or to introduce updated regulation for their existing gaming activities, for example: Brazil (the biggest LatAm market with 209 million), Bolivia (10 million), El Salvador (7.5 million), Paraguay (7 million), Uruguay (3.5) million), among others.
Which is the strongest market right now and which market has most potential for growth?
In my opinion and experience, there are five main factors or characteristics that can tell us whether a gaming market is strong or not.
The first factor is when the gaming regulator is truly empowered to enforce the law. Chile is an excellent example of this case. In general terms, observance of the law is immersed in the historical and cultural background of Chileans, which is good in itself, but also the government agencies are strong enough when it comes to enforcement.
A second characteristic is when the gaming law is able to remain in force despite the surrounding factors that directly influence the gaming industry, such as swings of politics or the constant progress of technology, just to name a couple of examples. Mexico fits perfectly into this category. For almost a couple of decades, its gaming legislation and related policies have remained in force without presenting abrupt changes, despite the fact that since 2000 there have been different presidents elected from diverse political orientations. In terms of technology, Mexico’s gaming regulations require some updates but currently allows almost all forms of gambling, including a broad spectrum of remote betting and online gaming activities.
A third factor is when legislators and the gaming regulator show a proactive openness to learn from regulations and experiences of other jurisdictions. Industry observers know that Colombia is steadily denoting this strength because it has been observing other mature jurisdictions in the creation of its own online gaming legislation, for example: Denmark, France, Italy, Spain, Malta and the United Kingdom.
The fourth characteristic is when the gaming regulator is preponderantly independent to internal politics and it is entitled to remain enough time in order to be able to exercise his position as a professional career. The current Peruvian regulator fully complies with this profile, making Peru one of the best role models in LatAm.
The fifth factor is when non-gaming or secondary legislations, such as foreign investments and taxes regulations, have a global perspective and therefore tend to promote the establishment of new businesses, either with national or international capital, and also allow profitability with reasonable and realistic taxes. Panama and Uruguay are good examples of this case.
All six aforementioned markets not only have a remarkable potential of growth, but also show tangible stable bases to continue with their positive development.
What should potential entrants to these markets be aware of? Are there some general rules of engagement that they need to be familiar with?
My only advice when it comes to potential entrants to LatAm markets is simple but very effective: Always seek a local view. In more than a decade in the gaming sector, I have seen some industry advisors or consultants who promote themselves as “LatAm experts”, when in fact they have hardly had a single or limited experience in the region, or even worse, when they completely ignore the very particular idiosyncrasy of each LatAm jurisdiction.
You’ve previously said that Mexico is the best starting place for new entrants. Is that still the case and if so, why?
If not the best, Mexico could be considered as one of the most stable gaming key markets in LatAm, mainly for the reasons above. Moreover, Mexico is an excellent option for new entrants and international investors, simply because nowadays it is the largest LatAm jurisdiction where gaming is allowed.