Lawyer interview: Influencers and their effect on LatAm gaming

While Argentinian hit series ‘The Eternaut’ is watched around the world, Argentinian gaming is currently moving at a slower rate of growth. With regulatory uncertainty, and concern surrounding black markets and underage gambling, Argentinian gambling is at an important juncture. On May 16, for example, the city of Mar del Plata, Argentina, unanimously approved a motion to stop the rise of online gambling addiction among young people.

In addition to limiting access to betting sites from educational establishments, the motion aims to reopen the debate on youth gambling addiction and the impact of sports betting on mental health. Argentina’s Chamber of Deputies also approved a bill aimed at banning online gambling advertisements nationwide on November 27, 2024, which passed with 139 votes in favor, 36 against and 59 abstentions, now awaiting consideration by the Senate at the time of writing.

MF Estudio – Abogados Attorney Partner Tomas Enrique Garcia Botta joined Gaming America at the SBC Summit Americas in Fort Lauderdale to discuss the issues seen in Argentina and share his views on the legislation being considered by the country’s Senate. Botta also spoke on the role of influencers in Argentina and how a lack of knowledge has resulted in criminal action against certain public figures.

So how do influencers come into play?

They are mostly affiliates and they lead customers to operators. There is an issue in Argentina with poor channelization of the market and it is estimated that around 10% of the market is legal, whereas the remaining 90% is illegal. This is key to influencers because they don’t know any better and they mostly promote black-market sites, which leads to their activity becoming top of mind for society. They get caught having public figures go on TV and then you have a quite strong backlash from the audience that sees minors being directed to gambling products. But since they are being directed to unregulated or illegal gambling products, there aren’t any measures in place that can prevent them from participating.

The conversation with influencers right now is that there is no regulation and, as I said, you could have potentially 24 different regulations covering the same topic, which is the activity of an influencer. Because online activity doesn’t do well with geographical boundaries, it becomes messy. Studies conducted by the Association of State Lotteries in Argentina suggest influencers are one of the main forces attracting minors into gambling. This is when influencers in of themselves become very relevant as it’s somehow a centerpiece to the strategy of fighting the black market, but you don’t have specific criminal provisions to cater for the activity of influencers.

Is it worth it for a black-market site to utilise influencer promotion, if it may result in higher regulatory scrutiny of its operation?

They want traffic. They will bring traffic any way they can and in any way they see suitable. This is also when enforcement comes into place, because the vision from a black-market operator currently is: there are no consequences.

We had a situation where influencers were openly promoting black-market sites and the initial reaction was to contact the influencers and begin reporting the accounts to relevant social media platforms. This didn’t really work so influencers, in most cases, became affiliates and because they were on revenue-sharing agreements, it was argued they were partners to the black-market operators.

By becoming partners of the black market you could very well say they are offering gaming without approval. Criminal actions were filed against top influencers, subpoenas were issued and now they are being subject to criminal proceedings. We don’t know the outcome yet, but this has had a beneficial impact on the social media platforms, because you start to see less activity related to the black market.

Could you also speak on legislation currently being discussed in Argentina in regards to prohibiting online gambling advertisements?

Yes, there are a number of bills that were mainly motivated by underage gambling. The politicians believe resolving this issue is by limiting advertising and attacking the regulated sector, which is an incorrect approach in my view. Minors playing is a symptom, but it’s not the disease. The disease is a lack of enforcement, and this is where we stand right now. One of those bills, despite several having been filed or brought to Congress, was approved by the House of Representatives in November 2024. It will be treated by a joint commission, but it’s currently within the internal process of the Senate.

If I had to say just one thing, however, the approach is incorrect. There is an issue with the black market and minors playing is a reflection of this issue. You need to fight the black market and, as a national congress, you need to be aware of your limitations. You cannot step into the provinces and tell them whether they can issue licenses, allow advertising, set the conditions to apply for a license and ultimately ban any sponsorships or promotions. It is the provinces that need to regulate, the Federal Government cannot step in and say, ‘Okay, I’m regulating this.’

A massive challenge for the industry is working together to educate the audience on the issues involved, the stakes and the risks. Instead of a bill to fight the black market, it’s a bill to promote the black market that is currently being drafted. It’s a Trojan Horse. The bill will be approved and then you will hand over the keys to the black-market operators that don’t pay taxes, allow minors to play, are involved in criminal activities, don’t protect consumers, don’t abide by AML regulations and are, overall, criminals.

With Argentina operating similarly to the US in that provinces are responsible for individual regulation, could you foresee a compromise of sorts to restrict black-market activity?

At least from a strictly legal point of view, in Argentina, if you don’t have approval, you can’t do it, so the lack of a framework means you cannot do it. The challenge is the fact that you are using tools from the 19th and 20th centuries to fight an activity that is running on technology that is way more advanced. You will block a URL, then you have three mirror sites and they will update every day and it’s a never-ending story.

The approach should be holistic. You go after influencers, request URL blocks, follow the money and see how customers are gambling on illegal sites, funding their accounts and collecting payments. This is part of the work and requires interaction with federal offices, local offices and different regulatory frameworks, which is in the making at this time.

We’ve also heard the term “floating casino” in Argentina. What does this mean specifically for land-based gaming within the country?

The city of Buenos Aires has a specific situation because it is the seat of the Federal Government and, until 1994, when the national constitution in Argentina was reformed, it had a special status within the organization of the country. After the amendment to the constitution in 1994, the city of Buenos Aires was given an autonomous status. They have their own constitution and now they are able to elect the judiciary and legislative branches as well as a proper executive.

So how does the floating casino come into place?

The concession to operate was granted before the constitution of the city of Buenos Aires was enacted. It’s not sitting on a river because it needs to be seated on a river; but because it was said the river was subject to federal jurisdiction and the concession was granted by the National Lottery – it kept going based on that. Now, the National Lottery is dissolved and all the competencies were transferred over to the city of Buenos Aires.

There is no obligation. In fact, if you go to the constitution for the city of Buenos Aires, you will see a specific section that addresses gambling and the possibility of operating gaming within the city. It’s not necessarily a situation where this one waterside or riverside casino needed to do it, it was just older framework or older laws from back when the city of Buenos Aires did not have this autonomous status. There is also a slot hall sitting underneath the Palermo racetrack. The difference between the floating casino and the racetrack has to do with the fact that you don’t have tables in the racetrack; it’s just electronic gaming machines.

So any casino in Argentina would have authorization to conduct business in Argentina as long as all necessary requirements are met?

Yes, but unlike other jurisdictions or other markets, it’s not a straightforward process. They would need to call for a tender, which takes time, and it’s not a market where we normally have consultations from clients or prospective clients. They could think they have an opportunity to apply for the license, but this may or may not be the case depending on the moment in time they make the query.

Kirk Geller

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