Uruguay’s push to legalise online gambling may help further drive a “healthy wave” of regulation across South America, a leading industry executive said.?

The country’s Chamber of Senators voted in favour of legalising online gambling in mid-August. The proposal now needs to be debated by the House of Representatives before final approval.

Under the proposals, the General Directorate of Casinos of the Ministry of Economy and Finance will regulate online gambling in Uruguay. The bill will allow state and land-based casinos in the country to offer online gambling services. Sports betting is already legal.

The regulator will be required to contribute 5 percent of its gross profits to a fund dedicated to combat problem gambling.

Online already popular in Uruguay

“Uruguayans like online gambling, like many others, and they’ve been using foreign websites that the government blocks from time-to-time, but then starts again,” said Gabriel Szlaifsztein, general manager LATAM at technology and hosting company, Continent 8 Technologies.

“Additionally, there’s a “healthy wave” of legalization in all of the LATAM region since governments have realized that people are going to play anyway and because of the effects in terms of players health, technical controls, and tax revenues, that means a benefit for all parties.”

Online gambling regulation in LATAM began with Colombia in 2016, followed by Argentina, where regulation is on a province-by-province basis. Peru’s president signed a bill into law last month, while all eyes are currently on a push to pass legislation in Brazil. Chile has also begun the legislation process, publishing a delayed bill earlier this year.

The migration to all things online as a result of Covid, combined with a desire from governments to raise tax revenue to shore up pandemic-battered economies, has also helped stoke a move to legalisation.

“So, Uruguay is a key participant onboarded in this regulation wave to motivate other countries to regulate the activity to have a regulated environment in all LATAM,” Szlaifsztein said.

Solid market potential

Szlaifsztein said there is considerable potential in the Uruguay market, where sports betting is already highly popular. The country also has a relatively high income per capita, however, the downside is the small population of just 3.7 million. The World Bank put gross domestic product per capita at $17,020 in 2021, higher than Argentina and just ahead of Chile.

Soccer and horse racing are popular, as are live casino games.

“So, I believe that all games related to these activities have a very good opportunity to succeed. From my experience, slots are not the most popular, but a good offering could add an option to Uruguayan preferences.”

Uruguay also has good technological infrastructure with two submarine cables connecting with the rest of the world. It also has TIER III-certified data centres, both public and private, which offer a good level of service.

“In fact, many companies have established their operation there to supply the region,” Szlaifsztein says.

He adds that the regulation is likely to lead to strong competition for one of the licenses.

“It is a good opportunity to present a very interesting offer to the market with high-quality proposals and to live up to what the industry demands today. As it is projected to assign several authorizations, it implies certain competition to win the market and consequently requires betting on the best gaming platforms.”

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