Propelled by rapidly accelerating technological innovation and, crucially, sweeping state-level regulatory reforms, the South American iGaming industry has rapidly transformed in the last five-years, with the region becoming a major hub for global operators.
And, according to statista, LATAM’s betting market is expected to surge by some US$2.5 billion (£1.85bn) in the next half decade.
But the South American gambling boom exists in a huge variance of political and regulatory contexts, which directly shapes how quickly markets formalise, how effectively they are taxed and, critically, the extent to which illicit offshore operators retain market share.
In this special South American deep-dive, iGaming Future explores the political backdrops of the three major South American gambling sectors: Colombia, Argentina and Brazil.
Colombia: Regulated Success Story?
Gambling has a long-established history in Colombia, developing from informal pastimes into formal regulation with its legalisation in 1943.
Today the nation, South America’s second most populous country, is the “undisputed pioneer” of the region’s regulated industry.
In 2016, Colombia was the first to regulate the online market with its eGaming Act, enacted by state-authorised regulator, Coljuegos. By 2024, net iGaming revenue was COP 2.9 trillion (£545m/US$740m).
Significant regulatory milestones include the establishment of ETESA in 1993, its subsequent dissolution, and the creation of Coljuegos in 2011, which now serves as the principal regulatory authority.
Guerrillas
Since 2022, Colombia has been ruled by a Leftist coalition called Pacto Histórico (Historic Pact), headed by President Gustavo Petro, a former left-wing guerrilla fighter of the M-19 movement during the country’s devastating insurgency, one of the world’s longest ever armed conflicts.
And in keeping with the government’s socialist agenda, tax revenues from gambling have gone straight into the healthcare system serving the nation’s 52.9 million people.
Since taking power the Petro administration has pumped over £740 million (US$1bn) of gambling tax revenues collected by Coljuegos directly into healthcare – massively surpassing the welfare spending of previous Colombian governments.
Nevertheless, there has been growing opposition to Pacto Histórico’s decision–taken under emergency powers–to levy 19 percent VAT on all player deposits, which came into effect at the start of this year.
And the dispute highlights the constitutional limits of executive fiscal experimentation within iGaming regulation.
Presidential Elections
Colombia’s supreme Constitutional Court has since intervened, suspended the VAT hike and temporarily reverted taxation on gambling back to the previous 15 percent levy on GGR, while it reviews its legality.
Meantime, the Petro government has been ordered to repay these so-called ‘emergency taxes’, which have been deemed “unconstitutional”.
Colombia’s March 2026 parliamentary elections resulted in a fragmented Congress with neither a clear majority for the Left or the Right.
And there has been a significant upsurge in political violence in the run-up to the country’s presidential elections, which take place this Sunday, May 31.
Although by law Petro is banned from running again, polls show Petro’s protegé, leftist Senator Iván Cepeda, 63, as the front‑runner.
The son of a slain senator, Cepeda has pledged to extend social programmes and continue peace talks with armed groups, despite limited results.
If Cepeda wins, either outright or as head of a Leftist coalition, it’s fair to assume that the new government will renew its push to impose the 19 percent VAT – or at the very least maintain the gambling tax contribution to the national healthcare programme.
Brazil: A Busted Flush?
Spanning a whopping 8.5 million km2, Brazil is overwhelmingly South America’s largest country. It is also home to the fifth largest iGaming market in the world, and is predicted by some to contribute to half of South America’s online gambling revenue.
But this once hotly-anticipated regulated market, which only officially launched in January of last year, is hitting something of a legislative wall:
Referring to iGaming platforms on national television, Brazil President Luiz Inácio Lula da Silva recently threatened: “If it were up to me, I would ban them all.”
A striking statement, indeed, from the man who first launched industry regulation, by enacting Brazil’s regulatory gambling Law 14.790 in 2023.
Vibrant Illicit Market
Whilst Lula went on to stress in his interview that he was just “one component” of the institutional structure of governance–and emphasised the much needed input of the legislative arm of the government in such decisions–, his personal politics are clear.
And they will likely impact how the country continues to regulate and extend this massive, newly-formed gambling market.
Before legality and regulation, Brazil was still one of the world’s biggest online betting markets. And in just its first year of regulation, the industry generated roughly R$37 billion (£5.1bn/US$7bn) in GGR.
How much the still-vibrant clandestine iGaming market took is anyone’s guess.
A major driver of Brazil’s regulation of iGaming and online sports betting was fiscal potential – the government’s maximum capacity to generate revenue through taxation and other income sources based on its economic base.
Lula da Silva’s government brought some of Brazil’s explosive grey-market industry into a regulated framework – and generated significant tax revenue and licensing income for the state.
Gambling tax revenue surged dramatically from R$91 million in 2024 to R$9.9 billion in 2025 (about £1.4bn/US$2bn).
Consumer Protection
Officials also argued that regulation would increase consumer protection, as well as reduce illegal activity and introduce much-needed safeguards around addiction and financial transparency.
But it seems some hearts have changed.
Over 25.2 million Brazilians placed bets across the 79 regulated platforms available to them in 2025. That’s over 11 percent of the country’s 215 million population.
A centralised Self-Exclusion Platform was launched in December 2025 and received 153,000 registration requests within its first 20-days. The platform has since recorded over 217,000 self-exclusion requests in total.
In the face of this, gambling, particularly iGaming, has become rapidly politicised.
A Brazilian lawmaker, Deputy Pedro Uczai of the Workers’ Party, has even proposed a comprehensive ban on all iGaming platforms in a proposal to Congress.
He seeks to fully repeal Brazil’s current betting legislation and impose a nationwide ban on online gambling, including fixed-odds betting, while also covering related activities such as advertising, sponsorships, and payment processing.
The initiative gained early backing from 68 lawmakers within the Worker’s Party, giving it notable political traction.
But any measures designed to ban iGaming outright are unlikely to pass muster.
Argentina: Tangled Tango
Argentina is South America’s most mature and complex gambling market.
By some estimates the country’s online market will be worth a whopping AR$2.40 trillion (£1.36bn/US$1.72bn) in 2026. But Argentine gambling is also institutionally fragmented.
Despite the self-styled “anarcho-capitalist” politics of incumbent president “El Loco” Javier Milei–who came to power on promises of radical liberalisation, including a commitment to doing away with the Argentinian Peso and dollarising the economy–South America’s, second largest country and third largest economy remains a highly-devolved federalised republic.
Whilst the federal government remains in charge of areas like foreign policy, defense, and some areas of taxation and fiscal redistribution, regional governments hold a significant amount of domestic political control.
Libertarian Rhetoric
There’s no national gambling regulatory body in place, for example, and regulation is conducted wholly at the regional level. Each provincial government independently manages licensing, taxation and enforcement.
So despite the current ideological direction of the federal government, iGaming regulation is insulated at the provincial level, limiting the direct impact of national policy on the sector. Libertarian rhetoric at the national level still coexists with highly-regulated, provincialised markets.
This patchy regulatory landscape means market access, compliance and operator conditions vary significantly across the 13 jurisdictions and the autonomous region of the City of Buenos Aires.
As a result, its gambling market arguably does not function as a unified national industry, but as a collection of provincial regimes.
This map of contradictions inherently defines Argentina’s position within the broader South American iGaming frontier.
Because of this regulatory swamp, almost 60 percent of the country’s iGaming market remains in the grey – with most bets being made on unregulated platforms.
Conclusions
With new markets such as Chile–a previous regulatory vacuum with significant political resistance to the industry–now well on their way to joining the regulated fore; and neighbouring Peru being labelled “the most exciting new markets”, hosting top companies such as bet365 and Betway; one thing is crystal clear: iGaming in South America is here to stay – and flourish.
What differs significantly across the region, however, is not a trajectory of growth but the very political circumstances and structures that shape it.
Centralised regulatory systems such as Colombia’s have produced faster and more coherent market formalisation, even in the face of internal instability. While their centralised fiscal policy has, for now, led to an increase in available tax spending.
In highly-federalised contexts such as Argentina, the market forces persist but they are severely fragmented and much of it remains outside the regulatory fold in the absence of a national regulatory body.
Meanwhile in Brazil growing concerns around public health and addiction issues are fuelling something of an anti-gaming backlash.
Despite presenting a significant fiscal opportunity, political figures and policymakers right up to the presidential level are actively seeking regulatory restrictions – just one year after iGaming’s legalisation.
Markets are shaped and constrained by both political choices and structures, major operators must act accordingly, and expand into this new market with both South America’s people and its politics in mind.
