Recent Changes to Gambling Laws in Colombia
Coljuegos is the gambling regulator for Colombia. This year, they revised their list of legal gaming operators in the country to 15 platforms. This came after a previous year in which $82 million was paid to the country through licensing fees. Marco Emilio Hincapié, President of the Association, noted that this is to provide more security for those placing bets and gaming online. We discuss this year’s changes below.
The Growth of Gambling in Colombia and Latin America
There were some changes to the list of operators that can legally provide services in the country. Mozzart ended its contract due to bankruptcy. It is no longer authorized for use. Other platforms still operating but changing their names were the well-known Betfair, which has changed to Stake Columbia S.A.S. They join a host of other well-known names in the country, such as William Hill and Bwin. It is expected changes and renewals of licenses will add a round of $92 million to the revenue made. The money has been marked to improve health services for low-income families.
Over the past few years, the Latin American market has been a wealth of revenue for the online casino industry. As the internet and communication infrastructure have grown, so have those who are able to game online. The industry has also made vast improvements, with a host of casinos that offer the fastest withdrawal turnaround along with improvements in customer service and security. For many of these countries, the right taxation and levies can be a huge boost to the economy.
The industry across the globe is expected to grow by 12.4% in the run-up to 2030. Latin America will play a huge part in this, especially as the European market reaches saturation and many US states remain defiant against the implementation of online casinos. Colombia was ahead of the pack, being the first Latin American country to allow online gambling in 2020. This was followed by Argentina, which adopted a more province-based approach like the US, then Chile.
The region is also interesting, as the changes being adopted can be used as case studies in other areas. The Chilean government is one that is creating new rules and regulations to ensure they get the best in revenue from these operators without damaging their business through high taxes. It is antiquated gambling laws, or often gray areas in regulations, that are proving the real barrier to expansion in the region.
Colombia itself has a very fair system of taxation for gambling companies. Companies that have a return-to-player rating of 83% of their stakes are taxed at 15%. Those who have over this amount are taxed at 17%. This is viewed as a tiered approach and much more palatable for operators than the one-size-fits-all method adopted in many countries.
Online Gambling Boosts Colombian GDP
To get an overview of just how important the revenue from online gambling has been to Colombia, you only need to look at the second quarter of this year. Both the National Department of Administrative Statistics and Coljuegos released data that showed online gambling as a key factor in the growth of GDP.
In this sector, 2.1% was added to the value of gross domestic product. Revenue for the gambling sector was at $2.5bn and was buoyed by numerous sporting events. This included the Copa America, in which Colombia made the final. Events abroad, such as the European Cup, also added to this. Of all the income made, sports betting revenue accounted for around 47% of gross gaming revenue nationally.
However, it was not just sports betting that contributed to this. Online gambling games such as bingo and casinos also put 33% towards the gross gambling revenue. The lottery AstroSport generated 17% and a further 7% was added by the Baloto Lottery.
Colombian Vat Issues
However, not everything seems entirely rosy for the industry. In a bid to constantly update its regulations, changes suggested to VAT could impact the sector, according to one body. Asojuegos is the Association of Colombian Gaming Operators, and their statement was in response to a report the Colombian government is ready to add 19% VAT to online gambling operators in the upcoming budget.
According to Asojuegos, the tax could send people to black market gambling and harm revenue destined for the health industry. The government has argued that it can raise around COP2.1bn from the tax, based on a revenue figure from 2023. They believe this would leave operating unviable and turn people toward the black market.
Colombia has always been at the forefront of innovation and acceptance when it comes to online gambling. This change will be a test of its policies, and the eyes of Latin America and the wider world will be on it to see how and where its gambling industry goes next.
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