Just How Big is iGaming in South America?19 May, 2022
The iGaming industry has seen massive growth worldwide, and in the last few years, that has included South America. iGaming is the term used to refer to any video games played over the internet, fantasy sports leagues and online casinos where you will find table games and thousands of slots available.
Access to the Internet
In Latin America, there is still a significant issue accessing the Internet as the cost of PCs and laptops has been prohibitive for many people. However, the growth of the mobile phone industry has been explosive and gives users the required tools to enjoy the iGaming industry. At the end of 2021, around 422 million players registered for various online gaming across South America.
Showing Good Growth
Mobile devices are still primarily being used for watching movies or streaming music in Latin America. But the gaming industry is very aware of this new audience and therefore targeting advertising in the region. Studies report that over 2/3 of the population in South America plays around an hour of games online each day, which shows a thriving iGaming following that could easily be expanded.
Thanks to recent legislative changes in North America and this new supply of smartphones in South America, the sports betting sector has become the fastest area of growth in the iGaming arena. There are many soccer fans in the region, and this forms a natural partnership between watching games and supporting teams while betting on the outcomes. Across the globe, sports betting is looking at a 10% growth in the next three to four years.
Another popular sector within the iGaming industry is the online casino, and with apps downloaded, players can access their favourite games from smartphones making this another area of growth. There tends to be a significant uptake amongst the younger 20 something generation, and this will continue to be the case as more people purchase mobile phones and discover the easy access that online casinos offer. The software houses that develop casino games are aware of this target market and work hard to bring modern or themed twists to classic casino favourites to hook this new generation of millennials.
Gambling Regulation in South America
Not all states of South America have legalised gambling. It is still prohibited in Brazil and Ecuador, where only state lotteries are legal. However, others, such as Argentina, have regulations in place, governed on a provincial level where for the most part, it is allowed. In fact, it is a valuable income source, with the industry generating an annual revenue of $2.4 billion. Due to the financial crisis seen in 2020, the government increased federal tax rates for online gambling operations to 5% instead of 2%. This is on top of all city or provincial taxes.
Largest Area of Growth
It is not just South America that has seen iGaming growth, and although it is not considered a traditional part of the entertainment sector, that is where it sits. Across the world, online gaming is responsible for half the entertainment industry’s value. Even the combined value of the music and film industry does not come close to the gaming revenue. There are so many factors combining to create this growth, including relaxing regulations, access to smartphones and the continued evolution of technology that enable software creators to build increasingly realistic experiences. Industry experts predict that by 2025 a further one billion gamers will sign up worldwide, and it is likely that a significant number of these will come from South America, as the early indications show there is definite interest.
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