LATIN AMERICA IN FOCUS
LatAm Q2 Results Display Brazil Boom, Colombia Hit by Tax Hikes
With the majority of gambling companies having published their Q2 earnings, many operators have reported huge success in Brazil, though tax issues in Colombia continue to impact profitability.
Brazil was Flutter’s fastest-growing market in Q2, with revenue up 144 percent to $44 million, and CEO Peter Jackson hinted the company could look to expand into other LatAm markets.
Entain, meanwhile, posted a 21 percent year-on-year uptick in Brazil NGR over H1, with the company stating this is in line with its expectations. LatAm accounted for 28 percent of Entain’s Q2 revenue, driven by growth in Argentina and Peru.
But while Rush Street Interactive’s GGR in Colombia rocketed by over 70 percent in Q2, its net revenue from the market remained largely flat due to its bonusing strategy, introduced to offset the impacts on players from the temporary 19 percent VAT.
Notably, Codere Online stated it had reduced operations in Colombia to “the bare minimum” because of the tax, while CEO Aviv Sher also reiterated the company’s hesitation over entering Brazil due to the financial cost of such a move.
Lawyer Warns Peru Consumption Tax Risks Legal Market Collapse
It’s been more than a month since Peru began applying a 1 percent consumption tax on bets. A local legal expert warns that unless the measure is scrapped, the licensed market’s very survival could be in jeopardy.
After an initially scrapped consumption tax was approved in mid-December last year, the full 1 percent rate came in for operators on July 1, after a transition period where the rate was just 0.3 percent.
Nicolás Samohod Rivarola, founding partner of Samohod Lawyers, warns the current consumption tax could have a “catastrophic” impact on Peru’s regulated market.
“We are talking about the future, about the very permanence of the activity in the market,” Rivarola tells iGB. “That is how apocalyptic the impact of the ISC would be on the Peruvian market if it remains as it is currently.”
Report Says Brazil Could Collect $2.3 Billion from Retrospective Taxes
Brazil’s government is reportedly weighing up retroactive taxes on betting companies for their operations during the long pre-regulation gray market period.
Local outlet Metrópoles reports a working group between the Secretariat of Prizes and Bets (SPA) and the Federal Revenue Service (RFB) is considering taxes on companies that operated in the gray market.
The gray market period extended far beyond expectations. Former president Michel Temer signed online gambling legislation into law in December 2018, but it took five years for the Chamber of Deputies to give final approval, with full regulation coming into force this January.
According to Metrópoles’ report, the retrospective taxes could bring the government as much as BRL12.6 billion ($2.3 billion).
CT Interactive targets Argentina via Ondiss deal
CT Interactive has formed a strategic partnership with Argentine online casino platform provider Ondiss.
CT Interactive’s games are now live on the Ondiss platform, extending the company’s footprint in Argentina’s regulated iGaming market.
The agreement expands on the companies’ existing retail partnership at Casino & Hotel Casino Magic in Neuquén.
“Partnering with Ondiss marks a pivotal step in our Latin America strategy,” CT Interactive Chief Operating Officer Martin Ivanov explained. “This collaboration allows us to strengthen our footprint in one of the most promising markets in the region.”
Flamengo Ends Pixbet Deal as Flabet Shuts Down in Brazil
Flamengo, one of Brazil’s biggest soccer clubs, has terminated its sponsorship agreement with Pixbet, bringing an end ahead of schedule to their Flabet sportsbook partnership.
The master sponsorship, valued at around BRL470 million, was hailed as the biggest club deal in Brazilian football history.
However, Flamengo said on August 13 it had ended its deal with the online operator after reports emerged of delayed payments from Pixbet.
Flamengo is rumored to already be in negotiations with other betting operators to take over the master sponsorship, with Betano and Superbet reportedly among the suitors.
