For Influencers In Latin America, Great Power Comes With Legal Consequences

June 21, 2024
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Their power is outsized, they are largely unregulated and they are increasingly in trouble with the law for their illegal involvement in online gambling. No, not a criminal organisation, but influencers, whose power in Latin America has seen them become popular targets for advertising deals with online operators both legal and illegal. 
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Their power is outsized, they are largely unregulated and they are increasingly in trouble with the law for their illegal involvement in online gambling. No, not a criminal organisation, but influencers, whose power in Latin America has seen them become popular targets for advertising deals with online operators both legal and illegal. 

The ability of charismatic social media creators to successfully advertise to their dedicated audience is well understood in Latin America, as it is in many markets around the world.

However, the patchy regulatory status of various markets in the region, coupled with the outsized popularity of influencers in the region, is causing concern, especially in Brazil, which is set to open one of the world’s largest regulated online gambling markets at the start of next year.

The problems are manifold, as influencers often do not understand rules and regulations applicable to gambling, routinely taking deals from operators that are not licensed in their country of residence. In some cases, there are no regulations to govern influencer brand deals. 

Perhaps most notorious is football superstar Neymar’s deal with operator Blaze, inked in December 2022 to the reported tune of R$45m (approximately US$9m).  

When Curaçao-based Blaze became embroiled in controversy amid allegations of not paying out winning bets, their star also landed himself in hot water. As late as February of this year, lawsuits were still being filed against Neymar for his promotion of Blaze on social media.

Bichara e Motta, the law firm that represents Neymar, could not directly comment on the case in particular but confirmed that, as reported, the Brazil star is being sued by a man who said he lost R$62,000 as a result of being subjected to Neymar and other celebrities’ gambling promotions. 

The unnamed accuser is seeking R$1m in damages. 

The activities of Brazilian influencers are governed by CONAR, the country's self-regulatory advertising council that has specific guidelines for gambling and betting advertising as of the start of this year.

There is, purportedly, a regulatory ordinance in the pipeline that will specifically address influencers' engagement with the online gaming market, but it has yet to be published and it is not clear if there will be further rules established for influencers via forthcoming regulations due to the be released before the end of July.

That ordinance was promised by José Francisco Manssur, who was once tipped to be the head of the Secretariat of Bets and Prizes (SPA) but was passed over in favour of lawyer Regis Dudena, who has made no such public promises. 

Still, the more headline making cases of late are not because influencers are in violation of the advertising rules established by CONAR, but rather because influencers have been booked on charges of money laundering.

At the beginning of May, the São Paulo police seized the luxury vehicle and iPhones of an influencer power couple “suspected of promoting gambling on social media”. 

Igor Wender, one half of the duo, has 1.3m followers and has not posted to his account since the raid. His partner, Tiffany Barretto, has deactivated her account in the wake of the charges.  

While the pair are accused of advertising Fortune Tiger and showing simulations of winning, the two are also, more significantly, under suspicion of money laundering.

According to Udo Seckelmann, a lawyer at Bichara e Motta, that is often where the real case lies in Brazil. 

“The news that covers this is very confusing, because they say, 'okay, influencers that are promoting Fortune Tiger are being prosecuted',” he told Vixio GamblingCompliance.

However, according to Seckelmann, although it makes for sensational headlines, the individuals are not under criminal investigation for the infraction of promoting an offshore gambling website, but because there is usually suspected money laundering or other financial crimes involved. 

“Money laundering is always the crime that people cite in Brazil in any case if you are committing some activity that is illicit,” he said.

The challenges of influencers are not exclusive to Brazil.

In December, the gaming regulator for the Argentinian province of Entre Ríos said it was suing a local influencer for unauthorised luxury raffles among other financial crimes. 

The influencer in question, Nicolás Lorenzón, is currently posting about real estate from Miami, seemingly unruffled. 

Marketing through influencers will remain a huge market in Latin America as the gaming market grows. 

Brazilians spend, on average, nine hours online a day, three of those on social media, according to GlobalWebIndex. 

According to Statista, Brazil ranks fifth on the list of countries with the most social media users. In the last five years, advertising by influencers has increased by 160 percent. 

Even current President Luiz Inácio Lula da Silva met with prominent influencer Deolane Bezerra in the run-up to the last election to curry favour.  

She shortly thereafter had luxury cars and other items seized by the police as part of an investigation into a sports-betting platform that she had advertised. 

Bezerra claimed the raid was politically motivated.

With influencers set to remain important to marketing campaigns in newly regulating countries, question marks remain over how to govern them.

Colombia, the country that is often looked to in Latin America as a model of regulation for the rest of the continent, is trying to tackle the influencer problem by bringing them into the fold via workshops with the regulator Coljuegos.

But as the money and celebrity of influential involved in gaming promotion grows, a regulatory backlash looms.  

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