Online sports betting is a global trend which is relatively new in Latin America, giving it huge potential for growth in the coming years. Technavio, a research firm, has predicted that online sports betting will increase by 9.7% per annum until 2025 when the industry will reach USD 106.2 billion in sales.
A lawyer in Peru specialising in the gambling industry was excited, “The market is just starting but the outlook is great. There are more than 30 operators with direct marketing in Peru. There is still no special law but there are six bills in Congress however, today it is legal to operate in Peru, from abroad or from Peru.”
“The market is just starting but the outlook is great. There are more than 30 operators with direct marketing in Peru.”
Lawyer, specialised in the gambling industry, Peru
In Mexico, the online gambling sector employs 35,000 people directly and 105,000 indirectly. The country is expected to continue its annual growth rate of 33% during the 2020-2026 period as the increasing number of smartphone users and internet penetration provides easy access to gambling platforms. More specifically, online betting in Mexico generates USD 412 million in sales per year and is expected to increase by 30% on a yearly basis until 2026!
Mexico officially legalised sports betting as long ago as 1947, but in recent years the advent of online gambling has radically changed the outlook of the sector. Thus, the governing Morena party recently proposed a number of changes to the Federal Law of Gaming and Lotteries in order to give more regulatory powers to the Ministry of the Interior (Secretaría de Gobernación). The aim of the proposed new law is to make online gamble regulation more flexible in order to better tax the profits generated by online sports betting.
An industry executive saw the rise of online betting as unstoppable in Latin America, “The industry will continue to grow. The pandemic was a catalyst as people couldn’t go to casinos so they went online, so the business has grown a lot and in parallel it has activated complementary services. For example the influencers! There is no bookmaker that is not hand in hand with an influencer. Elsewhere, advertising is taking off with soccer teams, television advertising etc. If you watch a soccer game on TV, you will see adverts from at least 6 different bookmakers.”
There are inherent security concerns over online sports betting at a global level which in Mexico are exacerbated by the large penetration of organised crime in a number of economic sectors and industries with weak regulations. Organised crime groups often use betting schemes for money laundering. Since 2015, the Public Prosecution of Mexico has participated in international forums to acquire a better understanding of sports gambling risks but Mexico, and many other Latin America countries, still lack a clear legal framework to define criminal practices in online sports betting.
“Of course money-laundering is a risk but there are rules and laws for the prevention of money laundering in all major Latin American countries.”
Gambling industry executive, Mexico
The industry executive was careful to explain how his company manages these risks, “Of course money laundering is a risk but there are rules and laws for its prevention in all major Latin American countries and the protocols are the same as in the US or Europe, we have a compliance team, we have know-your-customer policies, suspicious transaction logging etc.”