South America remains a hotbed for investors and operators as both Chile and Peru’s markets experience new developments, but Brazil remains front and centre. 

Discussing the state of the continent in detail, the trio of SBC Media Manager Charlie Horner, SBC Noticias Business Journalist Damián Martínez and SBC Noticias Brazil Business Journalist Ana Maria Menezes all deliberated the latest news across the three countries on the latest iGaming Daily Podcast. 

Brazil’s current tax tug-of-war threatens to sabotage its regulated market before it has a chance to stabilise with the proposed rise in tax from 12% to 18% could fuel black-market participation.

The latest sponsorship deal secured by one of Brazil’s biggest football clubs Flamengo, which will see them enter the top 20 for football sponsor deals, could see the government intervene as well. Authorities could look to tax the newly agreed deal. 

Menezes said: “The amount of money coming with this deal, which could be up to 200 million reais, could place Flamengo in the top 20 main sponsorships in football, in the world.

“What does it say to the government? This is the question.”

However, the excessive taxation in newly regulated markets shown in Italy and Spain have shown what is likely to happen, with players being pushed into the black market. Menenzes also said that it could lead to less “regulatory efficiency”. 

Peru’s tax course correction

The country’s tax hikes, initially proposed to be around 90%, has been pulled back with one of the key reasons stipulated by Peruvian congresswoman Lady Mercedes Camones Soriano, is to keep players out of the black market.

While the government is still looking to raise up to $80m through selective consumption tax, Peru is seen as a pragmatic outlier and there is positivity over its future as a market. 

Martinez explained: “Camones has introduced a bill that would cut the tax by up to 90%. She explained that this is because the tax would only encourage the illegal market, given the digital nature of the business.

“There are no similar precedents in modern regulations. There are still no dates to discuss this project in the congress so we will have to wait and see if this proposal moves forward in the country.” 

Chile’s slow progress 

With interesting developments including imposing a 20% tax on land-based casinos and with authorised platforms now made to pay an annual tax of 2% of its gross revenue from sports betting to the National Sports Institute, there are strong structures that have been put in place. 

On top of this, substantial progress has been made on the bill that regulates online gambling platforms in the country. However, the future of the market, especially compared to its South American neighbours, is unlikely to surpass either of Brazil or Peru anytime soon.

Martinez said: “I don’t think anyone in Latin America can compare to Brazil. They are a whole continent on their own. 

“But the Chilean market, I also won’t think that it will be like the Peruvian market. If we look at the numbers, Chile has a population of almost 20 million and Peru has 34 million people in the country.

“I think it will be a smaller market than them.”