Latin America series: The Gap Between Regulation on Paper and Players in the Channel

What Channelisation Measures

Channelisation describes the share of a defined gambling market that takes place with locally authorised operators. The denominator matters. A share measured by GGR is not interchangeable with a share of players, visits or deposits, and a count of licensed websites is not a market share.

For example, 90 percent channelisation by GGR would mean that nine-tenths of estimated player losses in the measured market accrue to licensed operators. It would not show that 90 percent of people use only licensed sites: some people use both.

European experience offers questions to investigate rather than a ready-made answer for Latin America. Tax, product restrictions, enforcement, brand familiarity and payment access may all affect where people play. Establishing their individual effects requires comparable data over time, rather than assuming that every change in licensed revenue is offshore migration.

Brazil: Growth and Enforcement Are Different Measures

Brazil's federally authorised market opened on 1 January 2025. SPA's January 2026 statistical presentation recorded approximately BRL 37 billion in GGR and 25.2 million unique people who bet with reporting operators during 2025. These are measures of licensed activity, not estimates of the whole market.

The same presentation recorded about 25,000 blocked URLs from October 2024 through December 2025, alongside the removal of 324 influencer profiles and 229 pieces of content. The blocking period therefore begins before the regulated market's first calendar year.

These totals describe enforcement activity. One operator can use multiple addresses, and a blocked address can be replaced. Counting URLs cannot establish the unlicensed market's revenue or prove that demand has moved to licensed sites.

The commercial gap remains relevant. A federal authorisation costs BRL 30 million for five years and can cover up to three brands, in addition to operating and compliance costs. Complementary Law 224/2025 had already legislated a rise in the GGR-based statutory allocation from 12 to 13 percent from April 2026, then 14 percent in 2027 and 15 percent in 2028. The enacted schedule is the relevant baseline for planning at this date.

The same law also established potential joint tax liability for specified intermediaries facilitating unauthorised betting, subject to the conditions set out in the legislation. As at March 2026, enforcement development was therefore not limited to a proposal awaiting passage. Its practical effectiveness still needed to be evaluated.

Colombia: Tax Design, Suspension and a New Measure

Colombia's 2025 emergency measure imposed 19 percent VAT on deposits into internet-gambling accounts. A deposit-based charge and a GGR-based charge apply to different amounts, so identical percentage rates do not imply identical burdens.

The subsequent legal timeline is essential. Decree 1474 of December 2025 provided for 19 percent VAT on GGR in 2026, but its effects were suspended from 29 January 2026 following the Constitutional Court's intervention. It is therefore inaccurate to describe January's change as a settled correction that continued uninterrupted.

On 12 March 2026, a separate emergency measure, Decree 240, introduced a 16 percent national consumption tax for online gambling. Its Article 2 specifies GGR — bets less prizes paid in the relevant two-month period — as the tax base. This was a different tax under a different decree, not a continuation of the suspended 19 percent VAT measure.

Industry concern about the impact on licensed operators is relevant, but it does not establish a national channelisation percentage. A fall in licensed revenue alone cannot demonstrate how much activity moved offshore or establish that a tax change was its sole cause.

The defensible conclusion is narrower: tax-base changes alter the economics of serving players, while repeated changes and judicial intervention add planning risk. Assessing the effect on the unlicensed share requires consistent definitions, comparable periods and evidence about activity outside the licensed channel.

Mexico: Separating Authorisation from Enforcement

Mexico's gambling permits and financial-crime controls answer different questions. A gambling authorisation does not remove obligations under anti-money-laundering law; an enforcement action does not, on its own, establish that an operator never held a gambling permit.

On 11 November 2025, SEGOB announced the suspension of 13 casinos following an investigation by the Finance Ministry and the Security Cabinet. Its statement described operations in both physical and virtual form and linked the suspensions to financial-intelligence action against the entities' accounts.

The announcement described one group of 13 casinos with physical and virtual operations. It concerned suspected unlawful activity; an investigation or suspension is not a final determination of criminal liability.

Likewise, an estimate that a certain proportion of websites lacks authorisation would not show the proportion of bets or GGR going to those websites. Mexico's licensed and unlicensed market shares cannot be calculated from platform counts alone.

For market participants, the practical distinction is between checking a permit's scope, examining compliance with other legal duties and estimating the volume of activity outside the authorised market. Each needs its own evidence.

Three Markets, One Measurement Challenge

Licensing totals, blocking statistics and tax receipts are useful administrative indicators, but none is a complete channelisation measure. They describe different parts of the market and should be reported with their dates, units and limitations.

Product availability, price, payment access and player protection may influence the attraction of the licensed channel. Enforcement can make unlicensed services harder to reach. Evaluating how those factors interact requires more than a list of websites removed or a comparison of headline tax rates.

Industry Implications

A regional business case should distinguish the total estimated gambling market from the part an operator can legally and realistically serve. Turnover is not GGR, and traffic is not revenue.

Brazil provides substantial official information about licensed activity, but that does not settle the unlicensed denominator. Colombia demonstrates why the date, base and legal status of a tax belong in any comparison. Mexico illustrates why permit status and financial-crime enforcement must be assessed separately.

For operators and investors, the useful next question is not which country has the largest headline figure, but which estimates are comparable and which assumptions remain uncertain.