ESG, sustainability as the key to improving the reputation of the Latin American gaming industry.
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juancamilo@asensi.co
In the dynamic and growing gaming sector in Latin America, an increasingly relevant new dimension is gaining ground: corporate compliance based on sustainability, through ESG (Environmental Social Governance) criteria that encompass environmental, social, and governance aspects. The ESG impact can be materially seen in challenges specific to operations as follows:
Environmental (E): Climate impact, resource efficiency, energy consumption.
Social (S): Responsible gaming, impact on employees, social impact, channeling.
Governance (G): Regulatory compliance, ensuring ethical business practices and transparency – PTTE, corporate governance, and AML (anti-money laundering) policies.
These are the aspects that companies must currently consider to comply with the policies suggested by these criteria, which embody the major challenges for companies in the sector. By applying the ESG framework, organizations can manage, improve, measure, and report on their sustainability, i.e., their business practices and their results on various ethical issues. Today, investors, consumers, and regulators are requesting this information, demanding that organizations take responsibility for their actions and be accountable for their impacts.
A KEY STRATEGY
Why is sustainability in gaming of strategic importance?
The decision to adopt and communicate ESG principles is not just a passing trend, but a strategic response to an evolving business environment, with a highly positive impact on the industry’s relationship with governments, financial entities, and consumers.
The following advantages are projected for the gaming industry in Latin America, which the industry has already witnessed on other continents, where it has already shown significant benefits:
• Improved industry reputation. The sector is undergoing a transformation driven by the need to address its ESG impact, and by integrating principles into their business models, operators can enhance their reputation as a responsible industry. Being perceived as a leader in sustainability, governance, and business ethics improves corporate image and facilitates engagement with the financial sector and government.
• Channeling. Better consumer relations, through policies of positive social impact and environmental sustainability image, generate an intrinsic relationship between the connection with the betting brand and awareness of social responsibility, translating into greater channeling to the regulated market.
• Risk mitigation and long-term viability. The adoption of ESG criteria encompasses a holistic approach to sustainability, allowing operating companies to mitigate risks and improve their long-term viability, as it acts as an early warning and risk management system that goes beyond purely financial aspects. Long-term relationships that go beyond responsible gaming, positively impacting pillars such as Diversity, Equity, and Inclusion (DEI), in areas such as AML, PTTE, and government relations.
• Regulatory compliance. Integrating sustainable practices helps iGaming companies prepare to comply with developing regulations. Governments globally are demanding better practices around sustainability in all sectors.
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APPLICATION IN LATIN AMERICA
In the case of Colombia, companies under the supervision of the Superintendencia de Sociedades that meet certain annual total income criteria (30,000 SMMLV) and belong to sectors such as mining-energy, manufacturing, construction, tourism, telecommunications, and new technologies (or those that use or create information and telecommunications technologies) are obliged to implement a sustainability program.
Although specific regulations requiring ESG reporting for luck and chance games in Latin America may be under development and are not yet being demanded or implemented, it is undeniable that regulatory attention towards responsible gaming and consumer protection will eventually align with the social principles of ESG.
For example, in the province of Mendoza, Argentina, compliance with certain policies within the ESG framework was counted as additional points for the bidding of gaming operations.
Governments globally, jurisdiction by jurisdiction, have been aligning to demand better business practices regarding sustainability, regardless of the sector, urging these governments to exercise greater public control and oversight over private sector activities, rethinking economic development policies.
Governments in Latin America are focusing on large companies, but also on transnational ones, to adopt sustainable practices. Companies that actively adopt ESG practices, particularly regarding responsible gaming, will be better prepared to comply with future regulations and demonstrate their commitment to long-term sustainability.
It is important to highlight active participation in industry associations, as they recognize the importance of addressing sustainability collectively. These associations often work to promote standards and codes of conduct that align with ESG principles, as a unified approach can strengthen the credibility and sustainability of the entire sector.
In the Colombian context, there is an evolving regulatory framework that prioritizes sustainability and requires certain companies to implement ESG programs and submit reports. Proactive adoption of these criteria not only ensures regulatory compliance but also positions the industry as a responsible player committed to a more sustainable future.
CONCLUSION: A SUSTAINABLE PROJECTION
Do not wait for it to be mandatory. The adoption of ESG criteria is not just a good practice, but a strategic necessity for the betting industry in Latin America. Companies can strengthen their resilience, identify new growth opportunities, respond to stakeholder expectations, ensure their legitimacy to operate, and build a solid and lasting reputation. The path to sustainability is an essential journey for the future and an opportunity for the prosperity of the gaming sector in the region.
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