(AsiaGameHub) – By: Elena Rostova
LatAm governments are hiking gambling taxes to boost public revenue and formalize the market. Every leading voice in the regional igaming sector says this move will backfire. Higher tax burdens don’t push players into the formal market. They drive them straight to unregulated offshore platforms with zero compliance costs. Regulators are creating exactly the outcome they claim to want to eliminate.
Five leading LatAm igaming executives and regulatory experts laid out their concerns in a recent industry panel. Gaming LatAm CEO Carlos Fonseca Sarmiento says excessive taxes break basic economic logic, directly growing the illegal market. Mexico’s AIEJA president Miguel Ángel Ochoa Sánchez notes suffocating taxes cut total state revenue over time, while creating unfair competition for legal operators. Brazil already shows this dynamic in action: its regulated market share dropped from 55% to 45% in three months, with total effective tax burdens on licensed operators exceeding 40%. Chile’s ACCJ president Cecilia Valdés adds that predictable, stable rules matter as much as the tax rate itself, while regulatory lawyer Tatiana María Vásquez argues taxes must be tied to actual operator gross gaming revenue, not arbitrary bases. Ramiro Atucha of Atucha Advisory notes every extra tax point on licensed operators directly subsidizes unregulated offshore competitors who offer far better odds to players.
Regulators treat the igaming sector as an easy fiscal cash cow to cover gaps in regular tax collection. This ignores the global, digital nature of online gambling, where players can switch to offshore sites in one click. The only viable path forward is to set moderate, stable tax burdens tied to real operator GGR, low enough to make formal operation more attractive than offshore workarounds.
Author bio: Elena Rostova, public policy expert specializing in compliance assessments for governments and sovereign wealth funds across emerging markets.