LATIN AMERICA
The combination of ignorance and the presence of public figures associated with these sites in the media creates a compelling case for players to believe they are engaging with an authorized entity. However, mere awareness of these sites would not be sufficient without an efficient payment system that funds players and facilitates gambling activities. This is where key figures in the operation come into play: “Cajeros” (bookies), “Respaldos” (backers), and “Administradores” (administrators). “Cajeros” serve as the public face of the operation. They are responsible for attracting players, creating accounts, and most importantly, acting as intermediaries with the “Respaldos,” who provide the funds players use on the platform. In contrast, “Respaldos” are tasked with ensuring liquidity for the “Cajeros” and handling payouts for players looking to cash out. Lastly, “Administradores” are responsible for recruiting new “Cajeros,” and successful “Cajeros” may ascend the ranks to become “Administradores.” Funds circulate among players, “Cajeros,”, “Respaldos” and “Administradores” through payment accounts offered by companies under the purview of the Central Bank (“CB”) but distinct from traditional financial entities, cash, and cryptocurrencies. Many of these accounts are available for purchase on online marketplaces. The use of diverse accounts by “Cajeros” and “Respaldos” presents significant challenges in tracking fund flows and determining their ultimate destination. The dominance of an illegal market creates several issues. Firstly, the local government is not able to collect taxes from the operation of these activities. Secondly, there is no assurance of any Anti- Money Laundering (AML) procedure in place. Lastly, there is no responsible gambling application which is highly problematic as there is no guarantee that minors are not accessing these products.
Despite this lack of a specific regulation regarding these assets, different government bodies have issued regulations addressing the matter. In the first place, the Financial Information Unit (a regulatory body similar to FinCen) issued in 2014 a resolution in which it stated that all obliged subjects shall practice enhanced due diligence on clients that are involved with these assets. The National Congress and many local legislative bodies have imposed taxes on the purchase and sale of these assets as well as gross income taxes. The National Tax Authority established reporting obligations on platforms offering the sale, purchase, and custody of these assets. However, the regulatory body responsible for the most regulation may be the CB. Last year, the CB issued a prohibition on financial entities regarding the offering of any kind of cryptocurrency or cryptocurrency-related products. This prohibition was later broadened to include payment accounts as well as offering companies. Notwithstanding this lack of specific regulation of cryptocurrencies, and some form of exclusion by regulatory bodies, the latest “Crypto Adoption Index” 5 published by Chainanlysis shows that Argentina is the fifteenth country when it comes to crypto adoption (second only to Brazil in the LATAM region), and the twelfth in retail-oriented products. This shows that Argentina boasts a technologically savvy population that is familiar with this technology that, to a certain extent, serves as a proxy for US dollars. Seizing the opportunity: how cryptocurrencies can transform Argentina’s online gaming industry In a landscape where illegal gaming operators thrive, the need for innovative solutions is becoming more pressing with each passing day. The introduction of cryptocurrencies into the equation opens up a world of possibilities. Here, we examine the potential benefits that cryptocurrencies could bring to Argentina’s online gaming industry. In the first place, one of the most significant advantages of cryptocurrencies lies in their inherent transparency and traceability. Each transaction on a blockchain ledger is recorded, immutable, and publicly accessible. This means that every movement of funds, from player deposits to payouts, can be
Legal status of cryptocurrencies Cryptocurrencies are legal in Argentina, and, unlike gaming and gambling, their regulation falls under the scope of the National Congress. At the time of writing, there is currently a bill being debated which adopts many of FATF’s recommendations on virtual assets. For instance, the inclusion of a specific license for the offering of virtual assets in the form of a “virtual assets service provider”. 5 https://www.chainalysis.com/blog/2023-global-crypto-adoption-index/#top20.
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IMGL MAGAZINE | OCTOBER 2023
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