Latin America Requires Regulatory Consistency to Undermine the Black Market

(AsiaGameHub) –   The fear of over-regulation and excessive interference is driving players toward the black market, where no responsible gambling safeguards or player protection measures exist.

This was the primary conclusion drawn during SBC Media’s latest webinar, ‘Are Latin American Players Actually Safer Today?’, which gathered several industry experts to discuss the current state of player protection in the region. The panel featured:

• Luis Felipe Maia – Founding Partner, MAIA YOSHIYASU ADVAGADOS.
• Simon Westbury – Strategic Advisor, 1xBet.
• Simon Vincze – Head of Sustainable & Safer Gambling, Casino Guru.
• Alfredo Lazcano – Gaming Lawyer, Lazcano Samano.

Is excessive regulation undermining player safety?

Latin America finds itself at a crossroads regarding gambling regulation. The region is diverse, containing offshore-grey markets, provincially regulated markets, and fully federal or national regulatory frameworks.

However, there are instances of regulatory shifts, such as proposals in Brazil to ban sponsorships and tax increase proposals in both Brazil and Mexico, which are raising concerns among operators.

The panel unanimously supported regulated markets and the expansion of new markets across Latin America, yet they highlighted clear warning signs that excessive interference does more harm than good.

Maia shared his expertise on Brazil’s framework, stating: “It’s a curve. You reach an optimal point of protection, but once regulation becomes excessive, players become less protected because channeling is damaged.”

Vincze acknowledged that over-regulation can be detrimental to players but countered the idea that regulated markets are inherently unsafe.

“It would be inappropriate to claim that regulation doesn’t make them safer, because at least now they have an option that provides a sufficient safety framework and is overseen by an authority.”

Player confusion in Latin America

The webinar was hosted in partnership with 1xBet, which commissioned SBC Media to produce the International Player Safety Index series. The third part of the series was recently published, focusing on Latin America, and the webinar sessions provided a platform to debate some of its findings.

Simon Westbury, Strategic Advisor at 1xBet, recently spoke in-depth with SBC News about the report’s findings, reflecting on the lack of regulatory consistency across Latin America.

This supports Westbury’s Three Cs theory: if a market lacks clarity, consistency, or communication, a Big C emerges—confusion.

“I believe there is a consistency gap across Latin America. We are not suggesting a one-size-fits-all approach to player protection because every player is different, but player protection must be enshrined in every regulatory environment,” he noted.

The theory is also supported by practice. Vincze reflected on research he conducted using Google search analysis in Brazil and Mexico to estimate channelization rates in those markets.

Following his analysis over a 30-day period, Vincze cited that 74% of specific casino name keyword searches in Brazil were for offshore sites, while that figure stands at 56% in Mexico. For comparison, the UK is around 20%, Sweden 21%, and Spain 27%.

Vincze noted: “I believe this is because there is increasingly more exposure on the internet and social media for unlicensed brands, which can advertise through influencers and strong accounts without real enforcement.”

Areas for improvement

The positive news is that operators have a variety of tools at their disposal to help keep players safe on-site. KYC measures are the primary step, but others like deposit limits, time limits, and cooling-off periods have also been cited as useful for players globally.

However, the panel noted that these tools can create more confusion than benefit if not applied correctly.

Lazcano stated: “Safer gambling tools can be difficult to use, and operators don’t know how to properly explain their usage to players. In the worst-case scenario, these tools might simply be ignored by players.”

Maia cited another Brazilian example where a national self-exclusion list was introduced. However, due to a lack of understanding regarding its purpose, it has resulted in fraud against operators rather than aiding players.

He said: “We don’t see the regulator and the government supporting the regulated market. We had people with social benefits banned from playing, and then threats to increase taxation in Brazil. The message this portrays, and the result, is that Brazilian authorities are driving players to the illegal market.”

Westbury noted that tools should focus on education and making the experience fun and engaging, rather than being limiting and, in his words, clinical.

“I think sometimes we get it wrong as an industry. Some of these tools are intrusive. No one likes going to the doctor or the dentist because of the clinical environment; it’s generally not enjoyable. I think we actually need to focus on education. Players need to be educated about these tools.”

Watch the entire session and hear the full range of insights and opinions from the panel here.