Regulatory stability is a coveted ideal in any industry, but for the burgeoning fintech sector of Latin America, it's practically the Holy Grail. Laura Maria Gomez Betancur, the LatAm compliance chief for Stake, recently underscored this necessity amidst the whirlwind of regulatory changes currently sweeping across the region. As iGaming Business reports, Gomez believes that regulators in new markets like Brazil and Peru should let the dust settle before clamping down with fresh amendments.
The core of Gomez's argument revolves around giving the market adequate time to adapt to initial regulations before piling on more. It's an approach that sounds entirely reasonable, yet is surprisingly rare. New regulations aren’t just about keeping the industry in check; they're about creating a sustainable environment where businesses can thrive and consumers can engage safely. While this balancing act is delicate, the alternative-rushing into regulatory changes-could stifle growth and innovation.
Brazil and Peru, notable for their recent entries into regulated online gambling, have already experienced the complexities of rapid regulatory changes. Peru introduced a new consumption tax this year, and Brazil is not far behind with a significant tax hike and looming ad restrictions. It seems that the ink barely dries on one policy before another is enacted. This hastiness can lead businesses into tumultuous operational rhythms that mirror trying to dance on shifting sands.
What's more, overregulation carries the risk of driving both players and operators towards the unregulated, or "black," markets. This is a particularly acute concern in Brazil, where increased taxation and restrictions could make unofficial avenues more appealing. It's a classic case of two steps forward, one step back, where the intent to protect can paradoxically create greater risks.
Gomez highlights the need for a dialogue between regulators and businesses, a practice she remarks has been beneficial in Peru through the efforts of Mincetur. If Brazil's Secretariat of Prizes and Bets could emulate this approach, they might find that fostering a collaborative environment with operators leads to more effective and sensible regulations. This practice of regulatory bodies working closely with businesses to refine compliance protocols can also be seen in other sectors, such as crypto and fintech industries, where rapid technological advancements often outpace legislative frameworks.
An important takeaway from Stake’s experiences in Brazil is the emphasis on customer education, particularly concerning the Know Your Customer (KYC) processes. Initial resistance due to privacy concerns has gradually given way to acceptance, thanks to diligent informational efforts from operators. This aspect of facilitating compliance through customer education is crucial, not just in gambling but across all fintech operations, whether it’s explaining crypto transactions or the benefits of secure online banking infrastructures.
In conclusion, while the push for stringent regulations in emerging fintech markets like those in Latin America stems from good intentions, Laura Maria Gomez Betancur’s advocacy for a pause and reassessment period could be the linchpin for sustainable growth. After all, stable regulations aren't just good for business-they're good for everyone.
