Two successful online gambling regulation models: Colombia and Mexico
Colombia and Mexico are the two gambling jurisdictions in Latin America that, despite their deficiencies in regulatory, tax and market integration, have sufficiently demonstrated the advantages of a regulated online market. With the online expansion of gambling and sports betting, as well as digital payment methods, a regulatory framework adapted to the needs and preferences of consumers is more necessary than ever. Colombia and Mexico are the models in this regard. Peru, Brazil, Argentina or Chile could follow in its wake.
Latin-American it is one of the regions in which online gambling has experienced the greatest growth in recent years. But, although there are national jurisdictions for physical casinos and gaming halls, the regulation of the online market is still deficient . Steps are being taken in the right direction. The laws of Colombia and Mexico can serve as a model for other countries in the region.
Mexico: a decentralized model
The regulatory framework in Mexico dates back to 1947, the Federal Law on Games and Sweepstakes. Although there is a principle of reform, it does not seem that it will take shape in the near future. Online gambling and betting are legal in Mexico. ©Ricardo Esquivel/Pexels
The growth of the online gambling market is undeniable throughout Latin America. National jurisdictions such as Mexico are striving to adapt to the new digital reality, although approaches differ between countries. However, despite the existing disparity, everyone agrees about the benefits of an appropriate regulatory framework .
Online gambling and betting are legal in Mexico and are under the supervision of the General Directorate of Games and Draws dependent on the Ministry of the Interior (SEGOB) . Although the state has its own operator, pronosticos.gob.mx , which offers lotteries, sports forecasts and scratch-offs, there is no monopoly in this sense.
The federal Gambling Law is quite outdated, it dates back to December 1947. There is a reform proposal which, however, does not look like it will prosper in the near future. In this sense, the law was developed to regulate salons and physical gambling houses, so the online jurisdiction has a link with physical gambling, different from the case of Colombia and the vast majority of European regulations.
In Mexico, to operate online it is necessary to enter into an agreement with a physical casino, as we have recently seen in the principle of collaboration between BigBola and Betsson . This means that licenses cannot be applied for online directly, which is undoubtedly a setback for some of the big players international. In this sense, the Mexican jurisdiction, where the states have a great margin of maneuver, resembles the American one, where the states that have important physical casinos only allow online gambling on the basis of an agreement for the use of the license of the aforementioned casino. Anyway, once you regulation advances in the different states , the regulatory framework is being transformed towards more flexible forms of cooperation . A similar example in Europe is found in Belgium.
Argentina is one of the Latin American countries that, due to its political structure, has advanced a online gambling regulation model very similar to the Mexican. States have licensing powers and operators must partner with a local firm to enter the application process. Although the states maintain a maximum number of licenses allowed, this does not happen with the City of Buenos Aires. In Mexico there are also no restrictions on the maximum number of licenses to concede.
One of the problems associated with a decentralized system is that there is no central body coordinating self-exclusion programs of the game and prevention of the addition.
Colombia: towards a European model of the game
Colombia has a Moderna licensing system very similar to the European one. Its market is in full expansion and has exceeded all growth expectations. ©AltaGamba/Unsplash
Colombia happens to be the most successful regulated market in Latin America. The growth of the colombian online market has exceeded all expectations and the igaming industry is becoming a success story, surpassing the traditional physical betting and gaming establishments that, however, maintain a great local roots.
The legislation promoted by the Colombian authority Coljuegos it has facilitated the incorporation of international operators, so the Colombian online gambling market it offers greater integration that the Mexican market .
In this sense, the Colombian regulation it has been able to adapt to the demands of the market contextualizing their needs. With the cancellation of sporting events due to the COVID-19 pandemic adopted a more flexible approach and allowed live games as a compensatory measure for the losses caused by the coronavirus economic crisis. International operators did not miss the opportunity to obtain the relevant authorizations that have allowed them to operate with great success.
Thanks to the new developments of the software for live games it is possible to have more and better modalities of games and tables. Your authorization for Colombia it has been one of the great successes of Coljuegos.
Flexibility in introducing new requirements and incorporating new products , a moderate tax policy and an advertising regulation (which includes bonuses and sports sponsorships) without great restrictions, all this has made Colombia a model for Latin America.
Although online operators would have expressed the desire for Colombia to introduce measures on the integrity of bets , events of great international resonance such as the recent 2021 Copa América held in Brazil, have demonstrated the robustness of the regulated online market.
Colombia also has transparent gambling protocols, citizen attention and responsible gambling , with a dedicated website: www.juegabien.co , although, as in Mexico, there is not yet a centralized self-exclusion system for the country.
Challenges for the future
The enormous possibilities opened up by the development of software that has allowed to expand the variety of games, with virtual reality applications, for example, or the incorporation of new modalities in betting as the virtual sports and esports , have amplified the entertainment horizon of online gambling. Regulation needs to catch up on this aspect.
The digital payment methods they pose another challenge. Latin America is one of the regions where the use of bitcoin is most widespread . The use of cyber-currency for digital payments, which has recently been accepted in El Salvador , including deposits at online casinos, poses significant regulatory challenges. Bitcoin, Ethereum or Litecoin are not legal tender currencies, they are subject to great financial volatility and their speculative use can generate many problems.
Although Europe continues to concentrate the majority of the online gambling and betting market, legislative changes such as those that have happened in the United States with the legalization of gambling mean that it begins to be observed a shift of the igaiming business to the Americas . Latin America can benefit a lot from this, and Mexico and Colombia are the countries best placed to take advantage of the pull of digital casino games and online sports betting.
