iGaming in Latin America is on the rise

In 2022, however, we are witnessing an increasing number of Latin American (LatAm) governments pushing for a regulated, yet very much liberal, online gambling environment. This has resulted in large investments from leading operators, as well as brands across multiple industries partnering with iGaming companies.

In fact, year-on-year growth is the highest worldwide; in 2021 alone, revenues increased by 7.2 billion USD, equating to an overall growth rate of 5.1%, and, with these markets boasting a combined population of just over 400 million, there remains scope for further expansion.  

Land-based casinos have also realised that iGaming represents a potential threat — or possible opportunity — to their market share, and many are investing in their online presence as a result. For example, Gaming Innovation Group (GiG.com) recently signed a deal with a leading LatAm operator to expand their iGaming capabilities, with many other companies expected to follow suit in the coming years.

What Factors are Driving Growth?

Several factors have combined to stimulate the growth of iGaming in Latin America. One key factor has been consumers catching up with more developed economies in terms of disposable income, smartphone penetration and access to affordable 4G/5G data plans.

Perhaps even more importantly, however, online gambling has now achieved an enhanced level of social acceptance amongst LatAm consumers. This is spearheaded by the increasing usage of eCommerce and the availability of a variety of online payment methods. Depositing money on gambling sites is no longer seen as taboo, nor as a potential scam.

Additionally, consumers appear to be increasingly opting to place their gambling funds on new games such as slots and new interpretations of classic table games, with betting on sporting events becoming relatively less popular by comparison.

There remains plenty of room for further growth, positioning the LatAm market as perhaps the most promising on a global scale. Smartphone penetration has reached unprecedented levels, but is still only expected to reach 73% by 2025 — a relatively low number when compared to European markets, where smartphone penetration stood at 86% in 2020.

What is Holding Latin America Back?

Despite impressive growth in recent years, Latin America still suffers restricted growth due to the current regulatory environment. Many countries still operate in what may be termed a legal ‘grey’ area. A regulated environment for gambling still does not exist, but, similarly, it is often not banned or otherwise illegal.

In some countries, complex province-by-province legal environments (e.g. Argentina), make it very difficult to foster a transparent and open gambling market. The Brazilian market — which has exceptional potential — is only just beginning to regulate sports betting in the country, for example.

Nevertheless, player numbers continue to rise throughout Latin America, with VPNs providing an alternative route to access iGaming websites overseas. Of course, not all consumers are willing or able to engage with VPNs or other technical avenues, something which, therefore, continues to restrict growth.

In the interests of introducing regulation within the next decade, it may be considered advantageous for Latin America to introduce clear regulations within the next decade, as a semi-regulated environment is neither helpful to players nor local economies. Players do not enjoy consumer rights, for instance, while governments are not able to take advantage of potentially large tax incomes.

What we can say with confidence is that demand appears to be present in the region, with consumers now enjoying wider access to high-speed internet and affordable smartphones. Should LatAm countries decide to expedite the introduction of gambling regulations, we should see rapid growth in the iGaming market.

Disclaimer: Play responsibly. For help, visit www.rgf.org.mt. Players must be over 18