LATAM’s High-Stakes Game: Regulations, Growth, and the Industry’s Future

Latin America is shaping into a fascinating market when it comes to online gambling and betting. The market is still very uneven, of course, with certain countries on the continent having established clear legal frameworks for the industry, while other states still struggle to push the business out of the gray area. Still, the demand from the local players is high and the eagerness of local businesses to launch online casinos and develop games is obvious. 

Curious about the potential of LATAM and its emerging market, we decided to take a closer look at the regulations, supply, and demand country by country, starting with the leading nations.

Which LATAM Markets Are Currently in the Lead?

The leaders are those countries on the South American continent that have taken proactive steps to regulate online gambling. This led to clear licensing frameworks and taxation policies. Here are the most promising states at the moment:

• Colombia is among the first countries on the South American continent to adopt proper regulations for online gambling. Back in 2016, it introduced all the legal writing under the supervision of Coljuegos. As per this legal framework, online casinos that intend to supply games to players must comply with strict regulatory requirements, pass background checks and licensing, and have prevention measures for anti-money laundering. Since 2016, Colombia has served as a clear example to other progressive LATAM markets. It also regularly pops up in the international news due to all the major deals that it inks with global game suppliers.
• Argentina is another promising state when it comes to online gambling. The regulatory practices here are a bit more complicated and laws vary by province. Buenos Aires is in the lead as the most sophisticated market: online operators that have licenses can offer services to players. Other provinces, such as Mendoza and Córdoba, are also implementing regulations, making Argentina a decentralized but promising market.
• Mexico is a curious case. There is a set of licensing rules in place but the jurisdiction’s approach seems outdated. The Federal Gaming and Raffles Law dates back to 1947, with minor nods towards the modern gambling industry added later. At the same time, Mexican regulations allow international operators to partner with local license holders. This is good for players and local businesses alike and makes Mexico attractive to foreign investors. Mexican regulators are considering modernizing laws to increase government revenue from online gambling.

Which LATAM Markets Need to Step It Up?

• Brazil can really win it if it steps up. Size-wise, it is the biggest untapped market in LATAM. It also has a very active gambling and betting audience. Back in 2018, the country legalized sports betting but full implementation remains delayed. The expansion of legal regulations to online casinos is still uncertain, though many offshore sites already cater to Brazilian players.
• Chile is liberal but a bit of a mess when it comes to regulating the gambling and betting industry. The state does not prohibit its residents from gambling in international lobbies. At the same time, up until lately, the industry remained unregulated. In 2022, the legislators offered a bill to manage games of chance and online betting and it is currently in the works.
• Peru is an aspiring runner. The country began developing a proper legal framework for licensing, auditing, and taxing online casinos back in 2022. This country has a lot of potential once the laws are properly introduced.

Which LATAM Markets Still Have a Long Way to Go?

There are still quite a few countries avoiding having an open conversation about the disbalance between the popularity of online gambling and the lack of proper regulations around it. One such country is Ecuador which banned online gambling altogether back in 2011, while the activity of Ecuadorian gamblers at offshore online gambling lobbies clearly shows interest. Another country that clearly prohibits virtual games of chance is Venezuela and the current unstable political situation does not indicate that there will be a quality shift in adjusting the gambling laws sometime soon. No official framework currently exists in Bolivia either, and it does not look like the government prioritized its regulation.

Demand and Player Preferences in LATAM

While the legal framework may be behind for some countries, the demand for quality online games of chance is rapidly increasing across the entire continent. This uptick is backed up by cultural enthusiasm for betting, an increase in smartphone penetration, and the booming international gambling scene. 

This demand is not homogenous across all South American countries, however. Local social, cultural, and economic traditions are a major influence, and understanding these behaviors is crucial for operators looking to tailor their offerings to LATAM audiences.

When it comes to gaming and betting behavior, sports betting reigns supreme across a staggering amount of countries. Soccer dominates among other disciplines, and betting on matches from leagues like Brazil’s Campeonato Brasileiro Série A, Argentina’s Primera División, and European competitions such as the UEFA Champions League is widespread. 

At the same time, casino games, including slot machines and live dealer contentare gaining momentum. Three counties in particular — Mexico, Colombia, and Brazil — show immense engagement. Sports-themed slots are among the absolute hits and when it comes to live games, roulette and blackjack are in high demand among players. 

Lottery and Bingo are always in the leads, despite these betting activities showing the smallest return of investment for bettors. However, the popularity is based on strong historical and cultural traditions, especially in Mexico and Brazil. Both countries have a long history of lottery games. 

eSports are having their moment, too. This is a relatively young discipline but it is very attractive to local gamers. Activity in international lobbies shows that younger LATAM players are increasingly drawn to esports betting on games like Counter-Strike: Global Offensive (CS: GO), League of Legends (LoL), and Dota 2.

A Closer Look at Banking Options

Banking is the cornerstone of any online casino. The more convenient payment options there are, the easier it is for players to deposit and withdraw. On the other hand, if the cashier is limited to a few payment solutions unfavorable to particular countries, this disrupts the demand chain. 

Luckily, more international online lobbies are gaining locally-friendly payment methods, which leads to better engagement:

• Brazil – PIX (instant bank transfer system) is widely used.
• Mexico – SPEI and OXXO (cash-based deposits at convenience stores) are common.
• Argentina – Rapipago and Pago Fácil are leading cash deposit methods.

At the same time, traditional banking infrastructure across LATAM is not always aligned with online gambling needs, leading to a reliance on alternative payment methods. Among them are cryptocurrencies. Tokens like Bitcoin and Ethereum, as well as stablecoins are gaining momentum among South America-based gamblers aiming to play at international online lobbies. Argentinians and Venezuelans seem to be among the most active users of crypto. 

Another peculiarity of the local market is that many gamblers still appreciate cash deposits — as in go down to the store, give cash to the cashier, and top up a prepaid voucher (like AstroPay, Paysafecard, and ToditoCash) instead of linking their bank accounts to gambling platforms.

Player Demographics and Spending Habits

If we are talking about the age group, an audience of anywhere between 18 to 35 years old leads the race and a lot of it has to do with the increasing mobile penetration of the continent. The supply of smartphones across the countries is high and it directly correlates with spending time gaming online, on the go.

Currently, the segment of casual players and low-rollers dominates the industry but there is also an uptick in high-rollers, especially across Brazil and Mexico. At the same time, LATAM players value community and interaction. Features like live chat in casino games, in-play sports betting, and social media engagement with gambling platforms enhance their gaming experience. Therefore, social gaming is on the rise.

The State of the Industry: Local Game Developers and Online Casino Operators

One of the reasons why LATAM’s online gambling industry grows rapidly is a persuasive expansion of international game developers and casino operators to the continent’s markets, while there is also a growing number of local game developers. While global brands continue to dominate the market, the presence of local studios and platforms is expanding, offering regionally tailored content that resonates with players.

A Closer Look at Local Game Developers

For the longest time, international software developers were the golden standard of the local industry. But it looks like the local suppliers then reflected on the experience, and added a dash of their own culture to fill in the gap, and thus local productions started to rapidly emerge. 

Our team has seen absolute success from the likes of LATAM studios like Vibra Gaming, Caleta Gaming, and BetConnections across the international arenas. These studios took off once they delivered games inspired by South American culture and local folklore, and took into consideration regional gambling preferences. Unlike large international providers that develop games with a broad global appeal, LATAM-based studios prioritize slot mechanics, themes, and bonus structures that align with local tastes.

While this tendency is very encouraging, on the other side of the scale is the fierce competition from established software developing giants like Evolution Gaming, Pragmatic Play, or Playtech. These still dominate the game libraries of international online lobbies. 

Additionally, regulatory inconsistencies make it difficult for LATAM studios to scale across multiple jurisdictions without facing licensing hurdles. However, some companies have partnered with international distributors, allowing their games to enter larger markets while maintaining a LATAM-first focus.

How Are Things with Local Online Casinos?

While local game suppliers slowly expand across the market, when it comes to online platforms, the international ones are still shaping the LATAM industry. Brands like Betsson or Bet365 dominate sports betting, leveraging their reputation and extensive marketing campaigns, particularly in football sponsorships.

This causes local gambling platforms to struggle for resources, attention, and their share of the market. Plus, foreign giant brands have licensing advantages, too. Local brands can get a better share of the market in the countries where the regulations of the industry are still developing as local online operators can offer region-specific payment methods, promotions, and even games. However, in fully regulated markets like Colombia and Argentina, international companies tend to take the lead due to their experience in navigating compliance requirements.

One of the biggest shifts in the industry is the increasing demand for live dealer games and mobile-first platforms. Players seek interactive experiences, pushing both local and international operators to invest in localized live casino products, streaming technology, and enhanced user experiences. As regulations continue to evolve, the balance between international dominance and local innovation will define LATAM’s online gambling industry in the coming years.

Market Size and Growth Potential Across LATAM

Many experts admit that the online gambling market of South America is expanding at an impressive pace, and factors like regulatory developments, increased digital adoption, and growing player demand act like fuel to the fire. While exact market size estimates vary, some projections suggest that the region’s online gambling industry could surpass $5 billion in annual revenue within the next few years, with Brazil, Mexico, and Colombia leading the way. This estimation does not factor in the uptick in mobile internet penetration but it is obvious that the young and tech-savvy population will only speed up the process further.

All eyes are on Brazil. Due to its size and density of population, the country is in the lead, with its market hovering over billions in revenues annually, and most of these revenues are in the gray area. Of course, sports betting is already legalized but the games of chance are still to be accounted for. If this sector also gets legalized, Brazil will chop off around 40% of the region’s total market share. 

Breathing into Brazil’s neck is Mexico. This country also benefits from a dense population and a semi-regulated online gambling market. Local online gambling providers still have to partner with international businesses but at the same time, this is what stimulates international businesses to enter the arena and contribute to the local economy. Sports betting and casino games already generate substantial revenues, with local adaptation—such as payment integration and Spanish-language interfaces—playing a crucial role in player retention.

Colombia seems to run a race of its own. Being the only fully regulated online gambling market, and the most mature one in the region, too, the country benefits from a structured licensing framework. It has contributed to a stable and competitive environment, attracting both international operators and local startups. It comes as no surprise that many neighboring countries take Colombia’s lead and explore its experience to see the ways to effectively adopt the successful practices.

The Challenges that LATAM Faces

There is a grain of salt that we need to add to these sweet and optimistic summaries as per the leading nations of the region. We see at least three major challenges that can further impact the development of the regional industry. 

The biggest challenge by far is regulatory uncertainty, particularly in countries where gambling laws remain in flux. Look at Brazil. While showing a lot of potential, its hesitance to implement gambling laws directly affects and slows down the industry. Peru’s ongoing adjustments to its regulations also highlight the unpredictable nature of LATAM’s legislative landscape. This directly correlates with outdated or ineffective taxation policies, licensing fees, and possible state monopolies that heavily weigh on the profitability of the market.

Another critical issue is payment accessibility. Digital wallets, crypto, and international bank transfers can remain a temporary solution but they can also be very uncomfortable to large groups of LATAM players — those with no access to bank accounts and disbelief in crypto, in particular. A significant portion of the population still relies on cash transactions — this is a need that’s not covered that well by international online lobbies. 

Finally, international online casinos and game suppliers will continue to slow down the development of regional markets if they continue to dominate them. Of course, a way out is for these international suppliers to recognize the historic and cultural traditions and needs of the local gambling audiences and to create more localized offerings. These might include Spanish and Portuguese-language platforms, region-specific promotions, and enhanced customer support tailored to Latin American players.

Despite these concerns, the prediction stands strong – we are positive that the LATAM online gambling market will carry on expanding and more countries will embrace a regulated approach to gambling. The sooner the governments adopt fair licensing models and taxation structures, the sooner the industry could see a steady rise in revenue, ultimately positioning South America as a major global hub for online gambling.

Other Noteworthy Trends and Future Outlook

It’s fascinating to observe how the online gambling and betting market of South America grows, expands, and gets sophisticated. The region is on the right track with all of the trends that shape the industry, from the increasing role of mobile phones and cryptocurrencies to embracing eSports and slot machines. For as long as LATAM countries continue to explore ways to legalize and regulate the industry while letting in foreign investors, the industry is on the right track.

Let’s look at these hidden trends that help push the industry closer to success:

• An uptick in interest in eSports betting is an undeniable trend. This one comes from a younger generation as older players and bettors are dedicated to classic sports betting. The countries that introduced the trend are Brazil, Mexico, and Argentina. Across these markets, games like Counter-Strike: Global Offensive (CS: GO), League of Legends, and Dota 2 and subsequent betting on them prevail. The segment is represented by all sorts of activities, from eSports tournaments to dedicated betting markets for major competitions. Given that Latin America has a highly engaged gaming community, the esports betting sector is expected to see rapid expansion, especially as local teams and tournaments gain more recognition.
• Despite being loyal to payments in hard cash, LATAM players do give crypto the benefit of the doubt. Stats show that more players choose digital tokens to wager online. Part of this is not particularly from the good life as economic instability pushes players to look for alternative solutions. Countries like Argentina and Venezuela dominate this trend. Within these markets, gamblers prefer Bitcoin, Ethereum, and stablecoins. Digital currencies are equally used for deposits and withdrawals. Local gambling communities have started to see such currencies as safe, secure, fast, and affordable. Anonymity is another unbeatable benefit. That being said, we must acknowledge that crypto is still very much in the gray area when it comes to local economies. However, this trend is expected to continue, with more gambling platforms incorporating blockchain technology to provide transparency in gaming transactions.
• A trend that warms our hearts is the interest of governments in online gambling: the industry is recognized as an influential factor in shaping local economies. While countries like Colombia and Argentina have successfully integrated regulated online gambling into their economies, others remain hesitant. Brazil’s evolving regulatory landscape is particularly crucial, as its final legislative framework will set a precedent for how major LATAM markets approach licensing and taxation. If Brazil implements an investor-friendly regulatory model, it could encourage other nations, such as Chile and Peru, to accelerate their legalization efforts. On the other hand, if Brazil imposes high tax rates and operational restrictions, it could discourage international operators from fully committing to the region.
• An indisputable trend is the rise of localized gaming content. It looks like South American gamblers are fed up with generalized or international content and are gravitating towards local, familiar experiences. Games are seeing an uptick in referencing local history and cultures, and live dealer suppliers hire Spanish and Portuguese-speaking dealers. Customization is key in globalization as it leads to higher player retention rates. This realization even encouraged international developers to create LATAM-specific content, further cementing the region’s importance in the global gambling industry.

Looking ahead, Latin America’s online gambling industry will likely experience continued growth, but not without challenges. While demand remains high and technology adoption is increasing, regulatory inconsistencies and financial barriers could slow expansion. However, if governments establish clear frameworks and operators continue adapting their offerings to local needs, LATAM could become one of the leading online gambling markets worldwide.