Opinion: Time to cash in on the LatAm opportunity

Latin America is the great unknown of the online gaming industry, both in real-money gambling (RMG) and the recent social casino phenomenon. Most of the industry, dominated by an Anglo-Saxon mentality, sees Latam as difficult to navigate, mostly in the” grey” or “black” corners of the industry and, to top it off, has a scent of corruption and muddy bureaucracy.

When given the opportunity to speak at gambling conferences I always challenge the audience with the same question: “are you aware today of anyone operating legally in Mexico in the RMG space?”.

Nine times out of ten there is nobody in the audience who knows, for example, that IGT (not an example of a second tier operator) and Codere, the recently troubled but large Spanish land-based operator, have a perfectly legal online casino called greenplay.mx up and running and a few powerful media partnerships to go along with it.

It is live, generating significant revenues, perfectly legal and most of the industry is unaware of it. Ironically the same companies that are ignoring Mexico are throwing money and energy for what is still today a much smaller pie north of the border in the United States.

But the truth is Latam offers an amazing opportunity for gaming companies if they are willing to understand the region. Social casino in particular is perhaps both a complement and a substitute for RMG and also operates in Latam under a different framework compared to other regions.

First, from a platform perspective, the open web is still a dominant platform which needs to be combined with the Facebook canvas and mobile. Akamon´s main market, and my personal favourite Brazil, encapsulates in one example all the good and bad of Latin America: huge potential, complex regulation and the need for local knowledge.

In Brazilian social casinos, for example, if you operate under a Brazilian legal entity, your relationship with the indispensable local payment systems will be exponentially easier. The flip side is that you will have to be careful on the use of virtual currency, particularly with bingo and poker, as unclear regulation can bite back precisely because you decided to be closer to the market and create a Brazilian company.

Navigating these catch-22 situations is what Latin America is all about. Still in social casino, when publishing on Facebook or mobile it is the platform itself facing the same issues with regulators and payment processors and it has become frequent at Akamon, due to our local knowledge, to advise our colleagues and the above platforms on the constant and sometimes confusing changes on regulation and policies of payment systems. But this is Latin America where not everything is straightforward and stable but this is how business is done.

However, even with these enormous challenges, turning your back on Latin America is, in my opinion, a bad idea. The continent has lived through a decade of unparalleled political stability and what lies ahead is even more encouraging.

The population is young, mobile savvy (Android will battle in Latam eventually even if monetisation is substantially better on IOS today) and governments in the most progressive parts of the continent such as Colombia and Peru are starting to seriously consider full-fledged, European style regulation.

Moreover, Latinos love to play on social casino sited such as Akamon´s, on land-based casinos scattered in the streets of Bogotá, Lima and Panama city and, of course, on hundreds of affiliate networks or skins benefiting from lucrative agreements with dot.com operators that are quietly making a bundle in Latin America while the gaming establishment chooses to ignore the region at its own risk.