The online gambling market in Argentina: lessons learned and challenges for 2023

In this first part of the INFOPLAY SPECIAL RESEARCH on the situation of the online gambling market in Argentina, we will focus exclusively on the reality of the Autonomous City of Buenos Aires and the Province of Buenos Aires. Undoubtedly, the two most developed markets and with the highest activity in the country.
Despite endemic problems such as unemployment, the devaluation of the peso, inflation, and the crisis caused by COVID-19, many provinces in Argentina have managed to boost the regulation processes of online gambling activities that should have been underway since at least 2021.

Among all of them, the Province and the City of Buenos Aires are considered the two most valuable legislations for comparative studies with other jurisdictions in Latin America and Europe. Even more so when both were able to be 100% operational a year before the great world event of Qatar 2022, where the Argentine national team led by Lionel Messi would win their third world championship title.

The provinces have the competence in this matter

The online gambling market in Latin America continues to attract more and more attention from investors, both local and international. Thanks to the success stories of regulated markets like Colombia since 2017 and the enormous expectations placed on Brazil, the sector is in constant growth and strengthening through processes like the one experienced by the City and the Province of Buenos Aires.

However, unlike most jurisdictions, it is the power granted to each of the 23 provinces and a federal district (the Autonomous City of Buenos Aires) that makes the Argentine online gambling market a confusing and not very well-known reality abroad.

This is because Argentina has a federal government system that guarantees that several territorial powers share the attributions of the administration. The Constitution determines which laws and regulations are governed by the Federal, Provincial, and Municipal powers. And in terms of gambling, almost all of these competencies are granted to the Provinces.

This is the case because, even before the phenomenon of online gambling, gambling (lotteries, casinos, bingo, and slots) was left out of the National Legislative Power when the Supreme Court of Justice of the Nation decided that gambling is a provincial matter.

This means that, very similarly to what happens in Spain, most of the regulation on gambling is the responsibility of each province, and not the Central Government. Despite this, also as in Spain, there are issues related to advertising or criminal offenses that can generate controversy over whether some rules of the National Legislative Power or even Municipal Ordinances could conflict with provincial regulation.

Regulation in the Autonomous City of Buenos Aires

Argentine politics is mainly divided into two political parties that often succeed each other in power and, although they change their denomination, usually represent the two main currents: the classic center-left that governs, for example, the Casa Rosada - headquarters of the Executive Power of the Argentine Republic -, the Province of Buenos Aires, in the Province of Córdoba, and in the City of Córdoba (Partido Justicialista) and the more liberal alternative, associated with the center-right that currently represents Juntos por el Cambio, which, for example, governs the City of Buenos Aires.

Despite the logical nuances and many differences, this duality could be compared to the one we experience in Spain between PSOE and PP.

From the Partido Justicialista (heir to Peronism and currently dominated by Kirchnerism), we would find the late President of the Nation from 2003 to 2027 Néstor Kirchner, his successor and wife Cristina Fernández, Axel Kicillof, Juan Schiaretti, or the current President of the country Alberto Fernández as representatives, as prominent figures. On the other hand, for Juntos por el Cambio, we could mention Mauricio Macri, Maria Eugenia Vidal, and Horacio Antonio Rodríguez Larreta as their main figures.

Understanding this political context and some of the mentioned leaders will help us comprehend the differences between the gaming legislations in the Province and the City of Buenos Aires. However, the first aspect to highlight is that despite the significant differences and the fact that Juntos por el Cambio governs the City and the Partido Justicialista governs the Province, both executives have approved online gaming legislation in both jurisdictions.

The City of Buenos Aires opened the call for online gaming operators in early 2020. Due to the pandemic, the process took longer than expected (operations were expected to start in November 2020), and it was not until December 2021 when Codere Online, BetWarrior, and Jugadón announced their launch in this new regional market.

It was a more agile process than that of the Province and has been able to attract 10 operators to date:
  • SUPER7
  • BET365
A dynamism that is demonstrated with the entry of new brands and products, such as BETURF, the online platform for Argentine Turf, owned by the leading gaming groups in Argentina that successfully operate with the online market leader, BetWarrior.

Additionally, the Regulator (the Lottery of the City of Buenos Aires) has relaxed some of its initial principles, and for example, has allowed associated in-person acquisition channels, such as, to date, the largest sports betting venue in Latin America: BetWarrior Sportbar, located at the Palermo Racecourse.

In the same way as was done in Colombia since 2017 or in Spain since 2012, the City of Buenos Aires guarantees safe and legal gambling by identifying licensed operators through the domain, with a wide variety of regulated products that include online poker, casino games, and sports betting.

The regulatory body for the jurisdiction is the Lottery of the City of Buenos Aires (LOTBA), chaired by Martín García Santillán and having Federico Romano as the Director at the Lottery of the City of Buenos Aires.

Regulation in the Province of Buenos Aires

In this INFOPLAY SPECIAL RESEARCH, in addition to the reality of the Autonomous City of Buenos Aires, we consider a brief specific analysis of the Province of Buenos Aires necessary.

The fact is that the data dictates, and the relevance of the Province is much greater than that of the City, with almost five times more population. With that said, almost simultaneously with the start of the regulated online gambling market in the City of Buenos Aires (C.A.B.A), the Province also made its debut in December 2021.

However, in this case, it was only one brand (the current market leader, Betwarrior) that began operations, while other companies like BPlay or Bet365 announced delays in their original plans, and others like Playtech, PokerStars, or Betsson communicated to their shareholders that there was no upcoming date for their launch.

With stricter economic and advertising requirements, setbacks were expected in this territory due to political issues. Governor Axel Kicillof (well known for being the Minister of Economy for President Cristina Fernández de Kirchner) had presented himself as a defender of not accepting regulation that his predecessor in office, the liberal María Eugenia Vidal, planned and which he related to favoritism towards the interests of sector entrepreneurs that Kicillof used to attack demagogically (Daniel Mautone, Daniel Angelici, Antonio Tabanelli, or Cristóbal López).

In any case, seeing that the figures moved by the online gambling industry are very large and could generate good profits in terms of tax contributions, the provincial government of Axel Kiciloff followed the steps of the City of Horacio Rodríguez Larreta, and both markets went ahead as a formula for receiving income to face the recession and the post-pandemic economic crisis.

In this case, the regulator is the Lottery and Casinos Institute of the Province of Buenos Aires (Provincial Lottery or IPLyC) with Omar Silva as the director and having two delegations: Mar del Plata and Bahía Blanca.

Currently, there are only four operators in the jurisdiction:
  • BET365

Province vs Autonomous City

The regulatory framework for online gambling at the international level is extensive and has clear references to what works better and worse. And it seems evident that although land-based gambling can work correctly through regional or autonomous regulation, online gambling does not. In fact, as we will see in this comparison between City and Province, players' access is restricted depending on where the connection is from.

At first glance, the regulations and requirements for operators from CABA (City) are much more advantageous for the sector, avoiding the dreaded limitation of licenses (which does exist in the province and has meant that despite meeting the requirements, some operators have been left out by evaluation and the Province's final decision) or that these are not extendable.

Regarding the duration of the licenses for the operators, the City establishes 5 years that can be extended for another five, so the arrival of more companies is expected and there is no limit of licensees. While in the Province, with a 15-year non-extendable license, what has abounded is the withdrawal of international operators who have finally not opted for this market.

It is no secret that the ultimate objective for most operators that have licenses in both jurisdictions would be to develop online activities in the City and Province: the synergies and economies of scale with licenses in the Province and City should guarantee a return on investment. and good positioning. For this reason, some of the future licensees of online gaming in the Province's Lottery make their operations in LOTBA territory subject to the start-up of their platforms licensed by the Province.

At the policy level, in the case of the City and the Province of Buenos Aires, it has not happened as it will happen soon with the Province and the City of Córdoba, where the Province will have licensed operators to operate on the Internet while In the City of Córdoba, a municipal ban will be maintained that does not allow this activity throughout the city.

And it is that in Córdoba, province and city are in the hands of the Justicialistas Martín Llaryora in the City and Juan Schiaretti in the Province, and in the City the discourse contrary to activities related to gambling continues to prevail.

Another difference between the Province and the City is that in the latter, in addition to the Argentine peso, the payment of the fee to the operators is also allowed in US dollars ($).

Finally, remember that Argentina is a nation made up of 24 provinces, and to date there are 15 that have approved legislation to grant licenses for internet gaming operators: Buenos Aires, the Autonomous City of Buenos Aires, Corrientes, Córdoba, Tucumán, La Pampa, Neuquén, Río Negro, Mendoza, Misiones, Santa Cruz, San Luis, Chaco, Entre Ríos and Santa Fe.

For this reason, beyond the approximation carried out on the online gambling markets of the Autonomous City and the Province of Buenos Aires, we invite you to a second part of this INFOPLAY SPECIAL RESEARCH in which we will detail the most important aspects of the regulations of the other provinces that we have not covered in this article, paying special attention to the current bidding process in Córdoba and where we will also summarize the peculiarities of the country in these four aspects: pre-existing legislation, lobbies, social perception and economic framework.

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