Igaming in Latin America: opportunities of an expanding industry

Companies in the igaming industry have noticed that Latin America is an important territory for expanding their businesses and taking advantage of a diverse region with increasing opportunities. According to Statista, gross revenue from online gaming is projected to continue increasing, reaching $3.4bn by 2025 in Latin America.

Despite this huge potential, to leverage all the possibilities of a rapidly evolving market, institutions must overcome some challenges. Specifically, they must figure out how to move money cross-border with cost-efficiency, speed and transparency, as well as how to operate in different countries in compliance to local regulations, with the ability to make and receive payments in local currency.

The technology offered by Bitso Business – the B2B arm of Bitso that provides the infrastructure for the future of cross-border payments – is a solution that has been increasingly used by industries like gaming, composed of companies that move massive volumes of money and need high liquidity and fast settlement times.

It also has significant applications for businesses that aggregate multiple payment methods and need one integration for multiple countries at the same time. With a unified API, payment service providers (PSPs) and merchants can have seamless integration with local banking systems, and so expand their businesses to Latin America in a regulated manner.

Localised payment systems and regulations

In Brazil, the regulations on the matter are very recent. For online gaming companies, it is mandatory to have payment platforms that are regulated locally and authorised by the Central Bank of Brazil. In addition, there must be an integration with the country’s Pix system for real-time payments to safeguard transactions.

Pix has rapidly established itself as the leading payment method in Brazil’s gaming industry, showcasing a remarkable trajectory since its launch by the Brazilian Central Bank in 2020. By September 2022, Pix facilitated an astounding 26 billion transactions totalling $2.24bn, highlighting its significant impact on the financial landscape.

Its seamless, instant payment capabilities have resonated well with users, evidenced by its impressive userbase of over 150 million by mid-2023. This widespread adoption underscores Pix’s dominance and pivotal role in transforming payment transactions within Brazil’s burgeoning igaming sector.

Meanwhile, in Mexico, the Federal Law on Games and Lotteries regulates, authorises and controls the industry’s businesses. Several changes since 2014 have allowed the operation of igaming, however businesses must have a licence from the Ministry of the Interior to operate in the country and operators must also meet requirements regarding tax collection, security and protection of operations.

In Mexico, the igaming industry is thriving, with approximately 66.5 million gamers who use a variety of payment methods to engage with platforms and purchase digital content. Over the last two years, there has been a notable increase in transactions via SPEI – the electronic payment system developed and operated by Banco de México – highlighting its critical role as a payment choice in the swiftly growing gaming market.

On the other hand, in Colombia, there are administrative authorisation processes through which operators must make a request and comply with the necessary requirements. This measure seeks to prevent its use for illicit activities or money laundering.

Argentina is one of the countries with strict regulations that have slowed the attraction of foreign investment in igaming, especially since each province promotes these regulations. In most cases, it is necessary to partner with a local entity that supports the transactions.

A payment gateway

In the same way the internet has revolutionised industries in communication or entertainment, the use of digital payments continues to strengthen and support businesses’ expansion by offering safe, regulated and low-cost alternatives.

As a great example, stablecoins are set to revolutionise the digital economy, enabling real-time international transactions, remittances and commerce. It combines the cutting-edge technology of cryptocurrency with the stability of national currencies, making them stablecoins an exciting development in the financial sector.

As global commerce continues to become more ubiquitous, Bitso Business offers direct connections to local banking rails and is a gateway to safe and regulated business expansion. It is the first exchange in Latin America with end-to-end regulatory and compliance coverage with licences across Latam, even for the newest gambling regulations such as those found in Brazil.

About Bitso Business

Bitso Business is the infrastructure for the future of cross-border payments. We are a payments infrastructure provider that enables global companies (and their customers) to pay and get paid in local currency and move money across borders.

Leveraging blockchain-based technology, Bitso Business allows you to execute cost-effective and transparent transactions, eliminating the need for pre-funding. Our platform is built on top of a single, easy-to-integrate API with direct connections to local banking rails, enabling instant local and cross-border transactions.

Rodrigo Faria is head of product and engineering at Bitso Business. With a 20-year career in tech companies and startups, Faria has gained solid experience leading multicultural teams on business strategy, product development and innovation. In his role, he directs the team in designing the next generation of blockchain-based rails technology that enables transparent and cost-effective cross-border payments.