Collaboration between the industry and government is key to developing successful regulations for a diverse Latin American online market, where a one-size-fits-all approach will not work, say local experts.
Speaking during the SBC Summit Barcelona on Wednesday (September 21), Gonzalo Rosell, CEO of Peruvian lottery and gaming operator La Tinka, advised international operators to keep in mind that their strategies must be tailored to each market in the Latin American region.
“There are much more bureaucratic countries, complicated countries, [than Peru] like Argentina in particular, to get money out. Also, in order to make a decision of what’s the best strategy to get into any market in Latin America, you have to take a closer look at each target market,” he said.
Argentina, in particular, looks like an attractive market opportunity, said Petra Zackrisson, a former Betsson executive who moderated the panel discussion, but noted that getting revenue from a business out of the country is a bureaucratic nightmare.
Rosell also added that even La Tinka, which is a local Peruvian company, has structured its business by being prepared to open offices elsewhere in Latin America to comply with certain markets’ regulations.
Aleksandra Sygiel, director of international development at Pinnacle, said partnerships with local operators can be an advisable strategy, depending on the specific country being targeted for expansion.
In some markets such as the Argentine provinces of Buenos Aires or Cordoba, partnering with a local operator is also a legal requirement.
“I don’t think there’s a golden rule, but it depends on your current footprint or if it's an emerging but grey market — let's say Brazil,” Sygiel said.
“If you already have a footprint you believe you can get through organically, then why not have all the revenue? Otherwise, in markets that are very local, I think partnerships are very interesting and beneficial for both parties, where the local partner brings the know-how and payments etc. and the international one maybe brings something more on the technology side or the budgeting, etc.”
Regarding La Tinka’s home market, Rosell said he was not concerned about competition from new market entrants in soon-to-be regulated Peru, where an online gambling and sports-betting law was signed in August.
“Most of the population is unbanked. They don't trust the system. They operate off-grid, so we believe it works very well for us in Peru,” he said.
“Having a retail platform as broadly spread as the one we operate there is actually a strength in that it is very difficult to replicate for international offshore platforms coming in.”
Looking to the future, Rosell and Sygiel said they were optimistic that as long as future regulation works in tandem with operators, business will continue to boom in the region.
Although Peru’s legislation has been sharply criticised for being rushed and thus having loopholes, Rosell was pragmatic.
“It’s a decent regulation. It would have been much better if they had taken more time, if they had incorporated the feedback from the industry in the process, but I mean, it’s decent enough to allow for the industry to continue growing.”
Sygiel added: “The most successful ones [regulations] were actually where the two sides were working together, the operator side and the regulator and that tends to be the smartest one.”
Still, one area of concern for the industry is that Peru, Brazil and Chile will all regulate at the same time, she said.
“Because every country is thinking locally, but the business is global, and you need to accommodate everyone."