Stake LatAm compliance chief calls for regulatory stability

LatAm is likely the hottest region in gambling right now, but regulatory issues ranging from new taxes to ad restrictions continue to persist. According to Laura Maria Gomez Betancur, Stake’s LatAm head of legal and compliance, the region needs regulatory stability.

It has been an intriguing period for the LatAm gambling sector. Brazil captured most of the headlines with its regulated online market launch this year, following on from that of Peru 12 months ago.

But despite the nascent regulations in those countries, already the regulated sector is facing increased pressure from new measures, with a new consumption tax in Peru. Meanwhile Brazil has also provisionally increased its tax rate, with additional ad restrictions also seemingly on the way.

While Gomez understands new regulations aren’t perfect and need to adapt, she also hopes for more time to be given by regulators to observe how the market plays out before making drastic alterations.

“What we as a company, and I think most companies, want to see is stability,” Gomez tells iGB. “I think that’s very important from a government to be able to provide that kind of stability to companies.

“Obviously, every new regulation is not perfect. Every new regulation will need some amendments. That will happen, that’s normal. But they should wait to see how the market is working, and then give some time to talk with operators.

“I think that as a new market, yes, they should let the market establish first before starting with all the changes.”

The risk of overregulation

For Gomez, regulators need to converse with operators to listen to their concerns of overregulation. Her fear is that this overregulation could have the potential consequences of increased black market activity.

This has been a particular fear in Brazil, where the government has issued a provisional measure to increase the tax rate from 12% to 18%. Alongside the approval of a bill to introduce new ad restrictions such as watersheds, this has led to major trade bodies sharing concerns over players and operators being driven into the black market.

“I do think that there is a risk of overregulating and I really hope that doesn’t happen, because sometimes you want to cover multiple topics, but you first need to understand the operation,” Gomez continues.

“You need to let the market grow. You need to talk to the companies and understand how the operation is working.”

Gomez says the regulator in Peru, Mincetur, has been successful in discussing regulation with operators, particularly the introduction of a 1% consumption tax on bets this year.

This discourse is something she hopes to also see with the Secretariat of Prizes and Bets in Brazil.

Gomez adds: “We really look forward to having meetings with the regulators to show them our best practice in other countries, but also to ask them, ‘So, how can we comply with this? We have this situation we don’t see is in the law, can we handle it this way?’

“And that’s the way that we want to move forward, because then you understand if the regulator sees this, then this is how we’re going to comply.”

‘Business as usual’ in Brazil for KYC after tough start

During the first three months following the launch of Brazil’s regulated online market on 1 January, many operators voiced their difficulties in transitioning players to licensed platforms.

This was largely down to players not understanding the importance of KYC processes such as facial recognition technology, which have been mandated by regulation.

While Gomez says that it is largely “business as usual” now in Brazil in terms of KYC, Stake also experienced troubles with KYC in the early stages of the year.

Education has been crucial in that respect, with Stake seeking to help players understand that KYC is for their protection.

“At the beginning, customers were very worried about data protection, or ‘What are you going to do with my documents? Or what are you going to do with my data’? But we explained to them, ‘This is for the protection of your account or the information that you’re providing to us, and also for us to verify your identity’,” Gomez says.

“Being an online gambling [operator], this is one of the highest priorities. You need to be able to verify the identity of the customers playing on your platform.”

That education extends to within Stake’s internal teams, with Gomez’s responsibilities including the creation of guidelines for other departments to educate customers on certain KYC situations.

Stake optimistic in LatAm

Gomez is keen to emphasise that, despite regulatory instability in LatAm, there is still an exciting future in store.

“I think the LatAm market obviously has a lot ahead and it’s obviously the place to be right now, 100%, in comparison to other markets,” Gomez concludes. “These are new regulated markets.

“So it’s a very good market and, being newly regulated, it’s very nice to be able to start fresh operations, and establishing those relationships with the regulators and basically build a reputation in LatAm.”