Understanding the regulatory framework to operate online gaming in the City of Buenos Aires

In this profound and extremely interesting report, our experts Alejandro Serrano Zaera and Javier Cantarero (Tecnalis) synthesize and explain the main points of the regulatory text that opened the doors to iGaming in the important Argentine territory. 

By Alejandro Serrano Zaera, COO, Tecnalis*

Email: aserrano@tecnalis.com
Website: https://www.linkedin.com/in/alejandro-serrano-zaera-97440769/

By Javier Cantarero, Compliance Gambling, Tecnalis**

Email: javicanta@hotmail.com
Website: https://www.linkedin.com/in/javier-cantarero-2b730753/

LOTBA, the Regulator of the City of Buenos Aires, Argentina, has done an impeccable job and has been concerned with standardizing, in an exhaustive and detailed way, each and every one of the most relevant points related to an online gambling operation, addressing gaps that other similar previous regulations left initially uncovered. Thus, while creating a great opportunity for eventual operators, it sets the bar very high, because, in the future, there will be internal procedures and policies in relation to players in the same level of the most advanced gaming regulations in the world.

From this very complete regulatory framework, due to its importance for the operator, we can highlight the following aspects:

a) It contemplates the wide range of verticals that an operator can exploit with its license.
b) It is very demanding in relation to the obligations on responsible gambling.
c) It emphasizes control tools, which allow real-time monitoring of the operations of online gaming.
d) It obliges to have a complete and well-designed Internal Control System (ICS), with data quality controls.
e) It requires having tools and security practices in the communication management and information systems, as well as procedures for future changes.
f) It establishes a specific regime for advertising and its corresponding sanctioning system.

In order for its online gaming operation to be successful, the aspiring operator must understand very well the critical role played by two fundamental components: the Operator Management Platform (OMP) and the Internal Control System (ICS), both part of what the regulation calls ‘the Technical System.’ The OMP is the nuclear engine of the online gaming business, since it supports the internal processes of the operator: from the recruitment and registration of players, the management of their accounts and payment systems, commercial management with players, campaigns and promotions, fraud and risk control, data protection, financial management and business management information, regulatory compliance and other business processes. The second, ICS, is the main element of regulatory compliance, and is responsible for recording and making available in detail to the Regulator operations and transactions made by players.

For Tecnalis, the regulatory framework revolves around six issues, which ensure business objectives, with the risks derived from the activity. It is about guaranteeing the protection and stability of the management system, analyzing the risks of a market as changing and disruptive as the current one, constantly affected by new realities. The reliability of the platform depends on compliance with legal and regulatory requirements. It is essential to be able to disaggregate each of the verticals by degree of importance to establish compliance priorities. If we look at the center of the scheme, we have those that make up the core of these priorities, which calibrate and control the legislative principles of online gaming in the City of Buenos Aires.

The first scenario, defined with the yellow color in the image, is made up of compliance with the R.G.P.D, regarding the protection of natural persons about the treatment of their personal data and their related rights. This is followed by the security measures corresponding to the data protection established by the supervisory authority. Finally, there is the inescapable obligation of the report and the adequate periodicity of the log files. All of this is under the monitoring of processes that facilitate their surveillance and control. The second scenario appears in green color, in which the Compliance team analyzes, documents and keeps updated legislation knowledge. It is about understanding law in a comprehensive and balanced way, in order to provide the necessary protection to reduce the risks caused by gaming activity. Tecnalis recognizes that the prevention of fraud and money laundering is among the main challenges of the operator, as well as attending to all those measures that guarantee the responsible gambling of the participants. Compliance with both scenarios would not be possible without constant information and communication with regulatory authorities. This is the channel that makes possible the solution of this strategy, and it is continuously evaluated by audits that certify the gaming platform.

Our Alira platform helps the leisure and entertainment industry to avoid compromising the stability and reputation of the gaming operator. Undoubtedly, combining the technological development of online gaming with compliance is a successful move. Furthermore, it is important to have experience in regulated markets to correctly understand all these flows. These two are the permanent components of the operation because, as the figure shows, the games and the means of payment are multiple and will change to present the player with an attractive offer at any time.

The choice of the platform and its ICS is, as can be seen, of enormous importance for operators. On the one hand, it’s important because improper operation can imply significant penalties, including the loss of the license. It is also key for the complexity and economic cost of a subsequent change of platform, motivated by a misguided initial choice. On the other, it’s essential because the platform depends on its operational efficiency, the ease to evolve the gaming offer, and the competitive agility of the business. It is equally critical to be able to keep the ICS updated to diligently comply with the new requirements of the Regulator, because, with experience, these will be adapted.

The advantage with which potential operators start is that they can use the experience and technical resources developed in the most mature markets, although choosing wisely from the range of products from the different suppliers will require a high degree of discernment. For example, there are very few platforms that present a successful and proven experience in regulated markets with demanding regulations, which have information security processes, practice in fraud management and money laundering prevention, and tools for responsible gaming. At the same time, these platforms will have to be flexible and scalable, equipped with personnel who can communicate with the Regulator, at all levels of dialogue, and in their technical language.

It is gratifying to observe the path that Latin American regulators (in this case, LOTBA) are following, continuing what Coljuegos started in Colombia, for the sake of adequate regulation of online gaming, necessary and beneficial for Argentina. Such a comprehensive and well-designed regulation will require a great effort from the authorities of the City of Buenos Aires, and from all the actors involved, to be able to rise to the technological challenges and unceasing advances in this industry. They will undoubtedly capitalize the best of experience from the world’s most advanced markets and also be smart in utilize the products and solutions developed there. Starting like this will mean taking a giant step. The future of their business will depend on it.


*Alejandro Serrano Zaera is the COO of Tecnalis, a technology company specialized in gambling. The main product is Alira, a management platform for online and land-based gaming operators.

**Javier Cantarero is responsible for Compliance in Gambling at Tecnalis. Among his functions are to apply and design internal procedures and controls that guarantee compliance with the law and the regulations that respond to it, as well as manage both audits and possible investigations of compliance and regulations.