Andrea Avedillo Builla, the Head of Legal at Lazcano Sámano, S.C., the company that specializes in legal support of iGaming-related companies, has provided the information about the legislative peculiarities of the gambling industry.
Andrea, what legal challenges are the most difficult for the iGaming industry of 2020?
Each latitude has its own set of legal challenges due to the specific conditions of each market, such as political climate, social order, and economic situation. For instance, Mexico has developed a fruitful online market with 1947’s gaming law and 2004’s regulations, which can use an update according to the latest technological advances and international practices. A new law that acknowledges the difference between land-based/retail and online operations, and properly regulates the independent business lines in both sectors, will be the major challenge for this country.
Nonetheless, globally one of the biggest challenges iGaming operators have been dealing with over the past years is payment solutions. The more sophisticated financial products become, the more strict banking and financial legislation get, and banks are less willing to work with the gambling industry. I believe that this refusal is based more on perceptional reasons than actual risks, yet it has slowed down the industry’s growth. More inclusive legal provisions, concerning banking institutions, could benefit the gambling industry to surpass this discriminative tendency.
What sectors of the gambling industry require legal support most of all? Why?
I would have to say that those designed to protect the most vulnerable individuals, also, as the iGaming industry grows, so does the risk to get hacked. It can also contribute to developing problem gambling because players can access such products whenever they want, facing fewer restrictions than, perhaps, in a physical casino or a betting shop. Nowadays, we have the technological tools to refrain problematic gamblers and underage players from gambling. Legal support to protect personal data, privacy, problematic gamblers, and minors should be reinforced because laws should protect the weak and vulnerable. A fully regulated and committed industry will also help to change the negative opinion that a large part of society still holds regarding gambling.
Do you agree that gambling regulations in the majority of countries lack consistency and reasonability?
I don’t think that I’m comfortable talking about regulations outside of Mexico, but, in my opinion, the majority of countries maintain a contradictory posture concerning gambling activities. Governments are likely to avoid major and public discussions about gambling and to overtax gambling activities to discourage its practice. However, gambling prohibitions are consistently being lifted around the world because their positive impact is undeniable. From its large contribution to the public spend to its great job creation, the gambling industry, while properly regulated, can do more good than harm. The gambling industry forms part of the entertainment industry and we shouldn’t lose sight of that.
What are the most common legal obstacles that operators face?
On one hand, the prejudice against the gambling industry in general and gambling activities in particular. Operators, at least in Mexico and other Latin American countries, can find it difficult to approach governments and maintain a constructive relationship with regulators due to the negative perception around them. In addition to the lack of continuity or permanence of the regulators, that comes from a deficient and most of the time outdated legal framework.
On the other hand, gambling, in almost every country, is overtaxed. Operators are constantly defending their businesses and explaining decision-makers’ real costs and the fact that some taxes, created or imposed by complete ignorance of the industry, constitute such burden that leads to business closure, not to mention that an excessive tax charge discourages local and foreign investment.
In your opinion, what countries have the most favorable legal conditions for the development of the gambling industry?
Because our expertise is focused on the Latin America region, specifically on Mexico, I will center my attention in this area. From a legality perspective, or a law enforcement perspective, Chile is a great example. In this country, the regulator does not interpret the law but enforce it.
Colombia has developed a strong regulation system due to its willingness to observe, learn, and adapt whatever model results successfully in other jurisdictions. Peru has implemented an efficient and even exemplary regulatory system. However, it is focused on land-based operations because online gambling is not regulated yet.
Finally, Mexico, even though it could use an updated legal framework as previously mentioned, allows almost all kinds of gambling activities, whether land-based or online, and the gambling industry has shown consistent growth for the last decade.
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