Stake's Latin American Legal and Compliance Director Laura Maria Gomez Betancur recently stated that emerging regulatory markets such as Brazil and Peru need to maintain policy stability, allowing operators more time to adapt and avoid implementing major regulatory changes prematurely. This view was expressed against the backdrop of the rapidly developing Latin American gaming market amidst an ever-changing regulatory environment.
Current Status and Regulatory Challenges of the Latin American Gaming Market
Latin America is currently one of the fastest-growing regions in the global gaming industry, with countries like Brazil and Peru recently introducing online gaming regulatory frameworks. Brazil officially launched its regulated online gaming market this year, while Peru implemented relevant regulations 12 months ago.
However, these emerging markets face pressures to adjust policies at the early stages of regulation. Peru has introduced a new consumption tax policy, and Brazil has temporarily raised tax levels, while also considering implementing more advertising restrictions. Such frequent policy changes bring uncertainty to operators' business planning.
The Importance of Regulatory Stability
Gomez Betancur emphasizes that regulatory bodies should allow the market to establish itself before making significant policy adjustments. She points out that any new regulations need continuous improvement and revision, but governments should first observe market operations and provide operators with sufficient communication and adaptation time.
"As a business, we believe that most companies want to see stability," Gomez said, "It's very important for the government to provide this stability. As new markets, it's better to let the market establish itself first, then start all changes."
Risks and Concerns of Overregulation
Gomez warns that overregulation could lead to an increase in black market activities. This issue is particularly prominent in Brazil, where the government has raised the tax rate from 12% to 18% and introduced new advertising restrictions. Major industry bodies worry that these measures might force players and operators to turn to the black market.
She suggests that regulatory bodies need to maintain communication with operators to understand their operations and concerns about overregulation. Gomez cites the Peruvian regulatory body Mincetur as an example, demonstrating successful constructive dialogue with operators on issues such as consumption taxes.
Challenges of KYC Implementation in the Brazilian Market
Many operators faced difficulties in implementing the Know Your Customer (KYC) process during the first three months after the launch of the regulated market in Brazil on January 1. Players often do not understand the importance of technologies such as facial recognition and have concerns about data protection.
Stake explains the purpose of the KYC process to players through educational methods to protect their accounts and safety. The company has also developed guidelines for its internal team to better explain KYC requirements to customers. Gomez states that the KYC implementation in the Brazilian market is now "business as usual."
Prospects and Outlook for the Latin American Market
Despite facing regulatory uncertainties, Gomez remains optimistic about the prospects of the Latin American gaming market. She believes the region "clearly has a broad future" and is one of the most worthwhile markets to invest in at present.
"These are new regulated markets, and it's very good to start new operations, establish relationships with regulatory bodies, and build a reputation in the Latin American region," Gomez concluded. She looks forward to meeting with regulatory bodies, sharing best practices from other countries, and discussing compliance solutions together.
