Attorney Carlos A. Fonseca Sarmiento, a partner of Fonseca Abogados LLC and a specialist in gaming legislation in Peru and Latin America, shared his analysis of the gaming industry in Latin America during 2022 and highlighted the growth of the online sector as a result of the pandemic.
In an interview with Yogonet, Fonseca also referred to the debates on regulatory frameworks for remote gaming in Latin America and evaluated the political and legal scenarios occurring in Peru, Chile, Uruguay, and Brazil.
After two pandemic years, what is your assessment of the performance of the gaming sector in 2022?
The land-based casino sector is recovering. Slowly but surely. It was one of the economic activities, in general, most impacted by the pandemic, since it is characterized by the concentration of people and, in many countries, the governments temporarily decreed the suspension of its operations. In several cases, as in Peru, longer than was reasonable. But on the other hand, the online gaming sector had impressive growth and its numbers are rising. These have been the “wonderful years” for remote gaming operators. The business exploded in Latin America and this will continue for many years.
How do you assess the impact of the online sector on the industry? What can we expect specifically?
The pandemic has radically modified the public’s behavior in relation to entertainment activities. E-commerce has become friendlier and that has benefited the online gaming industry. But this also brings with it a greater concern in optimizing service and generates a snowball effect on all involved. Providers of gaming platforms, gaming content, and software related to remote gambling services have increased. For example, those that serve for the digital identification of users, to manage the affiliates system, etc. The gaming industry is going through one of its most disruptive moments and whoever is willing to innovate will benefit from this attractive market.
Countries like Chile, Peru, Brazil, and Uruguay are discussing the legal direction of online gaming. What is your assessment of these debates in the region?
Of the four countries, the only one that gave an immediate response was Peru. In this country, it is legal to offer its residents remote gambling games, both from abroad and from Peru, but there was neither a special law nor a special authority. It has already been approved and in the next months, it will come into force. In other countries, the lack of special regulation and the existence of anachronistic norms has left the possibility for international operators to offer their products from abroad and this will continue to happen until a law defines the specific conditions in those countries. These are very attractive markets and we are dealing with a cross-border service. Therefore, if specific regulations are not established, international operators will not stop offering their products, as they generally have their gaming licenses in other jurisdictions and offer them according to the rules and licenses of those jurisdictions.
In the face of this, there is also the constitutional right to the development of personality which implies that each person is free to decide what they do with their private life and whether they have a smartphone or a computer and, as long as they are not prohibited from doing this activity, they may choose the option to satisfy their entertainment needs in general or their right to play, in particular.
The one that seems to me the closest to passing a law after Peru is Uruguay. In Brazil, there are many conflicting interests and in Chile, passing a law takes a long time because it has a Bicameral Congress. On the other hand, the bills being debated in these jurisdictions, unfortunately, do not maximize the positive externalities offered by the sector. There is a lot of bias, prejudice, and paternalism that makes them shoot themselves in the foot. The world is irreversibly going digital and it seems that politicians do not see it.
2022 also meant the return to in-person attendance at various events around the world. What is your assessment of the trade shows that took place this year?
There are fairs and events for all tastes. Each one focuses on some or all of these benefits: networking, training, getting to know the competition and new technologies, promoting products, and increasing sales. On the other hand, in addition to global trade fairs and events – which are basically those in London and Las Vegas – regional and national trade fairs and events are becoming increasingly important. Trade fairs are a response to the market. The same market growth demands more events, not all of them with the same purpose. In Latin America, for example, regulation generates the need for these events.
I also believe it is convenient to promote the idea of our good friend Evert Montero from Fecoljuegos of Colombia: to create a Latin American federation that can watch over the interests of the sector in the whole region. Every time a law on this activity is discussed, there is a lot of misinformation on the part of the legislators of our countries. In Peru, for example, there is no economic activity more regulated than the casino games and slot machines sector, and even its authority, the General Directorate of Casino Games and Slot Machines, is considered a model to follow. It is necessary to work at a regional level to improve the image of this sector. In each of these events that take place every year, professionalism and union of the sector can be appreciated; this could be institutionalized through a Latin American association.
What would be your year-end message to the sector, where will the industry continue to grow or what changes do you see in store for 2023?
The sector will continue to grow and they need to keep three things in mind. First, if you are not disruptive and do not recognize that the digitalization of the sector is an irreversible reality, you are not going to enjoy “surfing the wave”. Second, the industry has to spread its good things, such as jobs, taxes, and infrastructure, and for that, you have to research, compile and disseminate. And third, social responsibility has to be a fundamental part of companies’ internal policies.
On the other hand, in a globalized market, information is the main asset. It is impossible to process all information because it advances faster than it is humanly possible to digest. In this regard, Yogonet has played a fundamental role. There is no person who considers himself or herself involved in the gaming industry in Latin America who does not start the day reading Yogonet. Such has been its influence that, for the recent law on remote gambling in Peru, the MINCETUR officials who drafted it took the information that Yogonet offers us on a daily basis as sources for its elaboration.