Safer gambling in LatAm: Can markets raise standards as they regulate?
At a time of significant regulatory upheaval across the continent, Latin American regulators and operators are working to ensure they develop an effective safety net for customers. However, in order to take into account regional and cultural variations, tailored approaches will be required, writes Sonya Stonelake.
Although Latin America is an emerging market, the region has a lengthy gambling culture that dates back centuries. In pre-Columbian Mexico, Aztecs could lose all their belongings to a single game of patolli. Meanwhile, Brazil’s infamous jogo de bicho started by betting on zoo animals in 19th-century Rio.
Since then, governments have imposed restrictions of varying severity, from a total ban in Cuba to state monopolies in Argentina and Uruguay to neither prohibition nor regulation – creating grey markets – in Mexico and Peru.
But over the past few years, Latin America has been looking promising following a regulatory trend taking place across several countries. Colombia regulated both land-based and online gambling in 2016 and 2017 respectively, and reported $5.03bn in annual revenue for 2020.
To put more pressure on regulators, the novel coronavirus (Covid-19) pandemic hit, forcing retail to close and leaving players to continue gambling online, a vertical largely dominated by offshore sites across the continent.
Regulators that had opposed gambling began considering how regulation could restore the economy post-Covid. And as part of that regulatory process, player safeguards must be developed.
Former president of regional lottery association Corporación Iberoamericana de Loterias y Apuestas de Estado (CIBELAE), Luis Gama, argues that good regulation extends beyond taxation. “The most effective way to regulate [gambling] is to include all of its aspects, addressing problems without losing sight of the consequences of the measures to be implemented.”
This includes implementing responsible gambling systems, from player protection programmes to educational initiatives to prevent problem gambling. Administering RG policies in the region is more complex than duplicating the European framework, as Latin America differs in its customs, languages and preferences as well as suffering from specific limitations that must be addressed through safer gambling processes.
Currently, the region relies predominantly on operators to safeguard players. Equally an approach tailored for ‘Latin America’ as a whole will simply not work – each country, even city, has its own unique culture that will affect what works and what does not.
Despite Colombia being an established market thanks to regulation, Francesco Rodano, former Italian regulator and current chief policy officer of Playtech, doesn’t think this has translated much into safer gambling.
“The incentive behind [Colombian] regulation was to recover the black market,” he explains. “RG efforts were left to the good will of operators.”
Instead, Argentina could be Latin America’s benchmark for consumer protection. The country allows gambling as long as it is authorised by a competent authority, leaving it up to its 23 provinces to regulate gambling. ALEA (the Argentinian State Lottery Association) is a the country’s umbrella association for provincial lotteries. Social responsibility coordinator and ALEA member Diana Fusco says “provinces cooperate to have a national impact upon measures they’ve agreed on”.
The association is vocal about a range of issues, including the federal tax increase announced in November 2020, which it argued violates the provinces’ constitutional powers. Moreover, ALEA devotes a week in February to spreading awareness across Argentina towards RG, this year having rolled out prevention programmes and giving guidance tools to players and their families using the slogan: ‘Give the Green Light to Responsible Gambling’.
To promote this, each lottery building was lit with a green light to emphasise the message. Similarly, on 10 June, ALEA took steps to prevent problems initiated by the pandemic-driven rise in online gaming by releasing a Code for Responsible Advertising.
Influenced by international practices, the code outlines a list of behaviours online operators shouldn’t do, such as appeal to minors, provide misleading information about the chances of winning and playing anonymously, and using urgent language. Although ALEA can’t legally enforce its guidelines, it doesn’t necessarily mean operators won’t listen.
As Cristina Romero de Alba, Partner at LOYRA, puts it: “Operators don’t want addicted customers because they introduce a lot of issues.”
Aside from ALEA, each province has its own institution that deals with gambling. Argentinian psychiatrist, Dr Julio Angel Brizuela, is dedicated to counselling, researching and teaching pathological gambling (ludopatia) and behavioural addictions.
Furthermore, he co-wrote the Responsible Gaming Manual (2007) and was invited to different countries in Latin America and Europe to talk about his training programmes. “Each of the provinces’ frameworks vary in complexity. Most of them have a helpline and offer consultations with a specialised team. I’d say Neuquén is the most developed, followed by the Province of Buenos Aires, Cordoba, Misiones, Formosa, San Luis and Mendoza,” he comments.
As his work helped shape some of their RG policies, he stresses the importance of training all casino employees regardless of their involvement in gambling – even bouncers.
“We do it because casino employees are at risk of developing ludopatia,” Brizuela clarifies.
Fusco adds: “If a problem gambler becomes aggressive at a casino, the bouncers need to recognise that there’s an underlying problem instead of seeing them as just a hooligan.” Safer gambling safeguards, in her Province of Neuquén, are extensive, she continues. “RG here is broad and involves the police, judiciary, security, Ministry of Education and the community.”
Neuquén organises workshops in schools which use new technologies to teach children and young people about the risks and realities of gambling.
Safer gambling activist Mariela Huenchumilla has also worked with schools to teach safe play. She juggles roles as director of corporate RG at SunDreams LatAm, founder of the International RG Alliance and president of player protection body Corporacion Juego Responsable (CJR) roles.
“Education should start at an early age so that they can understand the issue,” she says. “Problem gamblers need help in recognising that they have a problem.”
Rodano speaks of the role technology plays in detecting players at risk of problem play. Although he acknowledges that these tools can be applied to retail, he says they remain most efficient online.
He divides safer gambling measures into prevention and intervention. In intervention, Playtech is developing in-play automated messages and nudges to alert players of problematic behaviour.
However, Chile is yet to regulate online gambling, despite the Ministry of Finance confirming that it is currently drafting a law to do so: “RG isn’t regulated within Chilean law, but the Superintendence of Gambling Casinos offers voluntary self-exclusion and self-assessment.” Huenchumilla adds.
SunDreams is currently pushing for RG to become a part of public policy. It has taken player protection into its own hands, and is challenging the myth that RG decreases profitability: “Operators need to understand its sustainability, in the sense that it’s about looking after customers, instead of fearing it’ll work against them.” Huenchumilla explains.
She’s firm in her stance that safer gambling should be aimed at stages prior to problems developing, because once it reaches that stage, it’s only treatable by healthcare professionals.
This means that in SunDreams’ casinos, trained counsellors, social workers and psychologists are present. SunDreams’ efforts didn’t go unnoticed, and they were certified by G4 in October 2021. “Regulating online gaming ensures player protection,” Fusco asserts, “anything that goes unregulated threatens society.”
Brazilian law is complicated and characterised by loopholes that can be exploited. Although progress was made with legislation paving the way for regulated fixed odds sports betting becoming law in 2018, the framework for the market is yet to be finalised, and licences awarded.
Like Chile, online gaming remains unregulated in Brazil, however many offshore operators manage to access the market. Consequently, the sleeping giant is only protected by the Consumer Protection Code rather than specific gambling regulation involving comprehensive safer gambling measures.
“There used to be an advertising watchdog called CONAR which was very active in taking down abusive or illegal campaigns,” founding and managing partner of Montgomery & Asociados, Neil Montgomery, says. “But since sports betting was legalised, CONAR has no control over these campaigns so sportsbooks are making a lot of money through advertising.”
Regardless, he hasn’t seen anything too ‘over the top’ from operators because they don’t want to risk missing out on a licence in the future. SECAP has promised to launch the sports betting regime before the 2022 FIFA World Cup, although there’s been scepticism as to whether this deadline will be met.
But Montgomery, who has already seen the draft regulations, has faith: “It contains provisions on RG as that’s a major concern for SECAP,” he says. “Since gambling has been banned for so long, they want to get it right. Their conversations on RG have been most intense with regulators from Sweden and Denmark.
“They’ve also been speaking with US regulators at ICE, especially about sports betting. They want to put KYC in place, allocate some taxes towards a problem gambling fund and operators will need to demonstrate that they’ve got efficient measures for avoiding addiction.”
If safer gambling is going to make a significant impact on the region, it needs to resonate with the people as much as possible. This even starts with its name – juego responsable (Responsible Gambling) is a direct translation from English and doesn’t convey its meaning well enough, local stakeholders argue.
Those stakeholders interpreted juego responsable as ‘playing responsibly’ – as in, incumbent on the player to moderate their play rather than the efforts by operators to prevent problem play.
The term could even be seen as insensitive, to some people. Brizuela agrees with changing the name: “Juego responsable is stigmatised and carries negative connotations. It needs to have its own Spanish name,” she says.
But we might not be able to look to Spain or Portugal for help with this one: “the Spanish or Portuguese there is different to the ones spoken in Europe,” Romero comments. Fusco suggests “juego saludable” [healthy play] as an alternative.
Romero worries that LatAm will follow Spain’s anti-gambling trend if advertising continues to be as prevalent as it is currently. “Advertising needs to communicate messages in a softer and more commercialised way than in Europe.”
Those suffering from the industry’s ill effects seem to concur. One person, speaking to ICE365 on the condition of anonymity, has suffered from problem gambling for ten years, and raises concerns regarding the volume of advertising in Mexico.
“There’s lots of it here, especially during sports games,” they say. “Let’s say you’re watching the football – during the game, ads flash onto the screen and the pitch is surrounded by logos and banners saying, ‘deposit here’.”
Brizuela agrees there needs to be more control over advertising. “Especially where it’s aimed at the general population. We need to protect minors and be careful not to stimulate magical or false thinking towards gambling.”
Better KYC could further protect players from gambling unsustainably. After all, poverty prevalent in LatAm.
“Most Brazilians live on the minimum salary, which is as low as £150 per month,” Montgomery says. “Effective KYC would help operators know who’s betting and limit spending among those who can’t afford to bet as much, otherwise they could quickly become indebted.”
Similarly, in Chile, almost half of problem gamblers occupy the lowest social class (stratum D). “RG doesn’t just concern addicts,” Huenchumilla says. “But also those who can’t afford to gamble as much as they do.”
The anonymous problem gambler sheds light on why poorer Latin Americans might fall into problem play by explaining how their own gambling spiralled from recreational to compulsive. “If I had 10 pesos, I’d bet it and lose, so then I’d ask someone to lend me another 10 to recover my losses.”
This kind of mentality shows how much impact widespread educational initiatives on safer gambling could have. According to Huenchumilla: “it’s important to teach gamblers that they can’t control the game’s outcome, like through superstitions.”
Chile is unique in that women appear to be more likely to develop problems with gambling – most markets’ problem play stats are dominated by men. A study by the University of Santiago and CJR found that 79.7% of problem gamblers are female.
There’s even an online support group dedicated to ludopatas (female problem gamblers) in Chile. Daniel Martinez, director of good practices in RG at CJR, states that women in Chile are drawn towards slot machines.
Research conducted by Robert Breen, a Brown University psychiatrist, found that slot machine players have a higher prevalence of addiction than those playing cards or betting on sports. Perhaps this is Chile’s motive behind approving the bill to ban slot machines outside of casinos in June 2021.
Martinez says the high percentage of female problem gamblers may be related to heavy reliance on family life – when their children leave home, mothers employ gambling as a coping mechanism. However, it may be more advantageous to establish treatment programmes and support groups for problem gamblers.
The anonymous individual playing unsustainably points out they doesn’t know of any support groups specifically for problem gamblers in Mexico, leaving problem gamblers to seek out help online: “Even most of the online groups are generally targeted towards people with addictions, not specifically gambling addiction. I think that’s because in Mexico, it’s not taken seriously.”
sOURCE : igamingbusiness.com