The sports betting landscape in Latin America has undergone a significant change in recent years. Traditionally in the background compared to the European market, the region has emerged as a fertile ground for the expansion of the industry.
In this blog, we will explore which countries are leading this legal and financial rise in the world of sports betting.
Since the legalization of the online marketplace in 2016, the country has experienced growth, with over 5 million registered users by 2023. The main activity is centered on soccer, accounting for 90% of the gambits. A thorough understanding of the laws and tax compliance is crucial to operate in this market.
Law 643 from 2001 remains a key pillar in Colombia, and tax compliance is essential to avoid costly penalties. Both companies and customers must comply with their tax obligations, as penalties for evasion can result in substantial payments. The betting market in Colombia is moving forward, driven by the legalization of betting. With strong regulation and a focus on tax compliance, Colombia is uniquely positioned to lead the way in the Latin American betting industry.
With an estimated processing value of $4 billion in 2023, the country ranks third in terms of volume. However, despite this place of honor, Mexico faces significant challenges, including illegality, the prevailing culture and the use of cash in betting.
In Mexico, more than a simple formality, the process of obtaining a license involves a number of criteria. And while having a license and an established entity in Mexico is a crucial step, it does not guarantee legal compliance, given the complex web of restrictions that govern the market.
A prominent player in the Mexican betting market is the National Lottery, which in 2022 generated a total Revenue of MXN 13.89 trillions, outperforming its competitors. One of the reasons for its success is the diversity of payment methods it offers, from face-to-face purchases at points of sale to an online option, which also reaches younger and digitally savvy segment of users.
Despite the success of the National Lottery, Mexico still has a lower banking penetration rate than other countries in the region, suggesting a vast potential for the inclusion of digital payment technologies in the betting market.
Brazil is on the road to success in the world of sports betting. With an impressive volume of $7 billions in 2023, the country has become the undisputed market leader in the region. The sector experienced a 135% increase through 2022, signaling an expanding market and an insatiable appetite for sports betting in the country.
Behind this success lies a combination of key factors, including the growing social legitimacy of online betting and the evolution of payment methods, especially the popularity of Pix. This instant payment system plays a key role in facilitating fast transactions, from bet payments to prize payouts.
But beyond technological advances and cultural shifts, regulatory changes in Brazil are paving the way for an even more flourishing industry. In early December 2023, the Senate passed a bill establishing a clear legal framework for market operators, addressing crucial aspects such as taxation, advertising, and legal limits on operating.
Brazil is already a role model in the world of sports betting, combining and explosive growth with a solid regulation and an innovative payment infrastructure. With these elements in place, the future of sports betting in Brazil looks brighter than ever.
With regulation of the betting market underway across Latin America, global operators have the opportunity to expand in the region. The combination of financial and digital inclusion, along with the maturity of the Latin American market and real-time payment systems, are key factors to consider for success in the betting market.
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