The Latin American market for coin-operated amusement machines is “fractured or fragmented” with some areas of strength and many areas under pressure.
This is the view of one of the industry’s best-known experts on that geographical sector - Mark Haim of Gold Coast International, based in New York, US. Haim, talking to InterGame recently, said that the entire region’s future prospects made it the ‘"land of the future," but that promise was constantly hampered by "corruption, poverty and high taxes."
Many companies, he said, view Latin America as one market, but it is really composed of many sub-markets with different operating regulations, different importing impediments and different levels of maturity. “Chile and Panama are quite free, with low duties and many business freedoms. Brazil is at the other extreme regarding import barriers, but the large population and solid middle class has allowed successful operators to grow.”
He said that nearly every market faced competition from gambling, although not all suffered from it. Colombia, Argentina and Peru faced strong competition from casinos and street gambling operators, yet successful amusement operations exist. “In my mind the two most consequential barriers to prosperous amusement operations are import barriers and currency exchange rates.”
He continued: “Import barriers can take the form of high tariffs, outright prohibitions and rampant corruption. Low exchange rates make the economics of high import costs in dollars, while earning low revenues in local currency, a difficult combination.”
Mexico, he said, is a special case “because Mexican importers enjoy duty free access to American supplies. But that access has translated into successful operations for only a few operators because the exchange rate has beaten down the cost of play to a low level. Additionally, since gambling was legalised about 10 years ago there has been an explosion of gambling parlours and many of our amusement operators migrated to the gambling business.”
