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Latin America's gambling revolution opens new regulatory frontiers
As online gambling continues to develop, Latin America is a region of opportunity. Yet, while the appeal of this growing market is indisputable, entering these diverse and developing jurisdictions is not without its challenges. From the complexities of regulatory environments to technical hurdles and market dynamics, operators must engage in strategic planning and tread carefully.
In an exclusive two-part series, James Kilsby, Chief Analyst and VP of Americas at Vixio Regulatory Intelligence, shares his insights into the regulatory landscape with SiGMA News and discusses the obstacles operators must navigate when expanding into Latin America and other global markets.
A two-pronged challenge lies ahead
James Kilsby nods thoughtfully when asked about industry challenges and opportunities in iGaming regulation. He explains that the industry is being challenged on two fronts.
First, an ever-increasing number of markets are regulating on a global basis. So, a considerable challenge is more opportunities to expand into new regulated markets outside of the long-established core. On the other hand, the industry faces stricter regulations in different areas. James adds that player protection and responsible gambling are at the heart of those regulations. This year is pivotal as online gambling expands beyond borders.
“This is a challenge for the industry to remain compliant in markets where operators and suppliers are already active.
Generally speaking, compliance burdens and regulations have become more onerous. At the same time, the good news is that increasing costs and burden can be mitigated by expanding to new, less mature emerging markets globally.”
James points out that this gives many opportunities to grow in less mature parts of the world but still increases the compliance burden because operators and suppliers who may have been in four regulated markets in Europe ten years ago now may be in ten in Europe alone, then anywhere from three to a dozen in the U.S.
The second part of the challenge is the quick spread of regulation in Latin America and Africa, another emerging frontier. The good news is that there are more opportunities to grow and expand globally, cultivating a sense of optimism and hope.
UK leads the global shift in gambling regulation
We move on to increased regulation in mature markets, and I mention that European governments are considering ways to increase tax income from the gambling industry. Some see this as a knee-jerk reaction to public opinion, while others see increased scrutiny and accountability as long overdue. James quickly points out that this is a clear global trend, not just a European initiative.
“The UK and Australia may have been at the forefront of it, but policymakers in a great number of jurisdictions have felt the need to revisit and revise the initial regulations that they established on online gambling, motivated by concerns of player protection and the wider visibility of gambling as a result of advertising and sponsorship.”
He adds that this is something we’ve seen across Europe, Australia and North America. Of course, North America, Latin America, and Africa are further back in the process. However, the increased visibility and prominence of online gambling and its immediate availability have naturally led to concerns among politicians and governments.
Reiterating my point about the populist reaction to negative stories about the gambling industry, I note how the mainstream media and social media adopt hostile problem gambling narratives. Even when we read about a lottery winner, there’s a pessimistic underlying theme to most articles. While it’s true that gambling is an addictive activity for some, more people enjoy gambling responsibly than not.
James agrees that in some countries, there has been more direct policy backlash against the industry. In others, he says they tighten the rules gradually.
“This is something the industry has been confronting and will continue to confront, not just in 2025 but in the longer term. There are clear concerns among governments around responsible gambling and advertising that have followed the liberalisation of online gambling.
“However, the online gambling industry is quite diverse in terms of the type of corporate background of different operators, where they’re based, and how big they are, so it’s difficult to speak for what the industry thinks about something in general terms without taking account of different stakeholders and different perspectives.”
The growing threat of illegal gambling markets
James moves on to the threat of illegal gambling and says that regulated operators and the industry generally support long-term regulatory objectives. Everyone is on the same side in wanting sustainable long-term growth. Having regulated and licenced operators represent the industry in different markets ensures that there’s not necessarily a conflict between government requirements and what policymakers would like to achieve. He says this avoids those ‘knee-jerk’ reactions I mentioned earlier.
A concern for the industry is the bleed to illegal markets. The gambling industry continually points to the increasing mountain of processes and the cost of meeting regulatory standards. James points out that this plays into the hands of the illegal operators. He declares, “For all the various mechanisms to block and direct players to legal sites and away from illegal ones, there is no silver bullet. It’s not 100 percent perfect.”
He adds that it is challenging for the gambling industry to comply with multiple regulations in differing jurisdictions. Globally, governments direct their own trajectory with their individual interests at heart. To do this in many different ways makes this a burden for operators. So, while the industry would like to look at the burgeoning risks of the illegal market and coordinate an efficient response, the differing layers of burden that come with multiple jurisdictions and their political priorities make this mission impossible.
The good news is that James believes these nuances can and should be challenged.
“Harmonisation is an interesting word, isn’t it?” he asks. SiGMA News recently published a five-part series based on Vixio’s comprehensive report around the U.S. Sweepstakes market. The articles examined the tangle of regulations each individual state has. I asked him whether the U.S. or even continents like Latin America may one day develop a more unified regulatory roadmap to improve sustainability. You can read the full series of articles by SiGMA News.
“Full harmonisation of gambling regulation is a pipe dream, right? It’s inconceivable without a black swan event that changes the game. Complete harmonisation is not a realistic goal.
“In Europe, it is well-settled that regulation is delivered on a member state-by-state basis. The U.S. is grounded in a state-by-state framework. So, a harmonisation where you have the same tax rates, identical permitted products, aligned licencing structures and regimes across multiple jurisdictions is unlikely.”
James believes the way the gambling industry can gain greater consensus is at a technical level. This requires more detail because of increasing jurisdictions regulating a larger volume of work with many regimes to account for.
Technology will shape regulation
We arrive at the subject of artificial intelligence (AI). James is sure that 2025 will be a pivotal year for AI, but the key question is, how will the industry deploy it? He feels it will be a more urgent policy question as the decade develops.
“There are two questions about how AI gets used. First, how should operators be expected or mandated to use AI from a player protection and responsible gambling point of view? We know this is happening already. Some companies use AI to spot changes in player behaviour. They then flag risks of potentially addictive play or problematic play. This is a regulation that most jurisdictions will require and develop to become a core area of regulation.
“Second, how can AI be deployed to actually enhance the gambling experience itself? For example, delivering players the types of casino games or the types of bets that they prefer. Their favourite sports and the appealing bets to save them from sifting through myriads of offerings, many that won’t suit them.”
This is clearly the direction the industry is racing towards. Immersive, localised and customised experiences offer many benefits, including player retention. This equates to brand loyalty and, thus, profitability. James points out that while AI delivers an engaging, tailored experience a player demands, it also follows a logical business objective. He remembers that U.S. and Brazilian policymakers questioned the depth of AI’s use in customer profiling. He advocates for AI’s use to leverage the benefits of responsible gambling, achieving the right balance between player satisfaction and protection.
Part two tomorrow concludes with Latin America’s regulatory shift, with Brazil offering the iGaming industry a new frontier. Is there a pot of gold at the end of the regulatory rainbow, or will the colours fade in a sea of complexity? You can read part two of this exclusive interview here!
*James Kilsby heads up Vixio’s North American-based operations. He has extensive industry experience and has spoken at industry conferences in the United States, Latin America and Europe, including at the European Parliament in Brussels. A fluent Spanish and Portuguese speaker, James also takes a keen interest in emerging Latin American gambling markets, including Mexico and Brazil. James holds an MA in Latin American History and Politics from the University of London.
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