Since the passing of the eGaming Act in October 2016, Colombia has seen tremendous growth in its online gambling sector. The current scene comprises legitimate domestic and offshore operators that provide various games of chance and all kinds of casino products. However, things haven't always been smooth. Before the 2016 regulations, operators focused on eGaming products had no formal way to apply for a license and provided services illegally. In July 2015, GTECH, a prime operator in the region, announced its intention to release an online service in 2016 following the success of its mobile app. This prompted a response from the Colombian government to enforce new gambling regulations that accommodate online gambling. In the next sections, we explore how casino regulations look like in Colombia, including licensing, legal games, taxation and more.
History of gambling in Colombia
Colombia is a Central and South American country bordering Venezuela, Brazil, Ecuador, Peru and Panama. It also has the Pacific Ocean and the Caribbean Sea to its west and north, respectively. The Colombian population is famously enthusiastic about gambling and stats show that around 61% of adults engage in at least one form of wagering. However, the country was plagued for many decades by Militia groups until its reconstruction under a new constitution in 1991. Since then, the government has put forth measures to help Colombia bounce back and home to several land-based casinos.
Law 643a of 2001 is the primary regulation that opened doors to legal gambling prospects in Colombia. Before this law, casinos were mainly operated by underworld figures. The law sought to identify the scattered casinos and gambling platforms and unify them under strict regulations that govern the practice. Land-based gambling was, at the time, regulated by the Empresa Territorial Para la Salud (ETESA) and Colombia saw a tremendous increase in gambling taxation revenue of up to 500%. Unfortunately, Law 643a did little to prevent illegal gambling, which was still rampant in 2008. Illegal bets accounted for up to 20% of all bets and some 20,000 slot machines remained unlicensed.
ETESA also faces torrid times with corruption scandals that led to its ultimate disbandment by President Uribe. It was replaced by Colijuegos, which is the current regulatory body for both land and casinosonlineencolombia. Colijuegos has made incredible strides and is credited with the present legal gambling in Colombia. Today, punters in the region have access to a wide variety of casino products and eGames from around the world. eGaming operators interested in the Colombian market can apply for a legitimate license from Colijuegos, allowing them to offer interactive games, bets, sports betting and poker.
The first legal eGaming operator, Wplay.co received a license in mid-2017 after completing a thorough review process. Since then, Colijuegos has licensed many local and offshore operators to ensure the Colombian gambling pool has enough options. The commission is tasked with upholding and enforcing all gambling regulations to eliminate illegal operators and activity. Those found guilty of operating illegal online casinos and gambling products may face up to 8 years in prison. Nonetheless, Colombia is still under transition. While most gambling and eGaming products are legal, new amendments are bound to happen, as we have seen in most gambling nations.
Gambling license in Colombia
The gambling license in Colombia is issued by Colijuegos, which is the body tasked with regulating the market. As aforementioned, online gambling regulations were introduced in 2016 when eGaming was defined. Before that, Colijuegos only regulated land-based gambling, starting with the infamous Baloto Lottery. However, in 2016, it was given the mandate to regulate interactive games, including products offered in online casinos. Colombia also became the first South American country to legalize online gambling. Proper setup for the licensing process has been the key to Colombia's eGaming success and all gambling operators are required to obtain a valid license from Colijuegos.
The Colombian gambling license runs for five years and is awarded to operators that meet all compliance requirements defined in Law 643 a 2001 and eGaming Act 2016. The licensing procedure involves reviewing all applicants to ensure they meet all rules and requirements before being awarded a license. A separate review is conducted every year to guarantee ongoing compliance and operators found in violation may face fines or even license revocation. On the other hand, operators running illegal cash gambling websites are prohibited and may face fines of up to €10.9 million (COL$193 million) or prison sentence from 6 to 8 years.
All eligible operators must pay a licensing fee of $200,000 per year in addition to gross tax revenues. More on Colombia gambling taxation is discussed in the sections below. Wplay.co was the first operator to receive a valid eGaming license in Colombia. This happened in mid-2017, and by the end of 2018, Colijuegos has issued licenses to 18 different online gambling operators. There are strict protocols to be followed by all operators and Colombia also opens its doors to offshore operators interested in providing their service to the ever-growing betting pool in the country. Illegal gambling websites are aggressively sought out and banned to ensure sustainable gaming.
Unlike licenses in other countries, the Colombian eGaming license houses all gambling forms, including poker, sports betting and casino games. As such, you don't have to get a license for each category unless you only offer those specific products. Instead, you can acquire one license covering all eGaming products. Since the legalization of online casinos in 2016, Colombia has become the heart of gambling in South America and a challenge for countries like Brazil and Mexico to update their existing gambling regulations. The strict rules also include player data protection to ensure punters gain access to true RNGs and certified fair results.
The legality of online gambling in Colombia
Colombia has a fully-regulated online gambling industry with a government-approved licensing commission, the El Consejo Nacional de Juegos de Suerte y Azar, or Coljuegos as it is popularly known. All operators interested in offering their services to Colombians must obtain a valid gambling license from Colijuegos and the license runs for five years. Online casinos must also ensure their clients meet the legal gambling age of 18 years and above. Online gambling in Columbia encompasses all games of luck, poker and sports betting accomplished through a website. There are still illegal websites and operators in the country, so it is upon players to review online casinos before joining. Some of the crucial aspects to examine include eGaming license validity, security measures, player data protection and software reliability. At the moment, all forms of online gambling are legal and many legitimate operators are serving the growing market, but players should keep an eye for new regulations and amendments.
Gambling taxation laws
Taxation is a big part of why countries across the globe have regulated gambling markets. Gambling generates billions in revenue and governments are determined to tax all gambling revenue. In 2019, Colijuegos reported that the industry tax revenue reached COL$680 million, a 16% increase from the COL$574 reported in 2018. Bingo contributed 57% of this income as Colijuegos surpassed the COL$3 billion mark on funds generated from gambling taxes. Online gambling accounted for 10% of tax revenue, generating COL$70 million, an 81% increase from the previous year. This trend is set to continue considering the gambling tax burden on land-based casinos and a growing preference for online platforms.
The current tax of online gambling gross revenue is set at 15%, which is the same tax required of all operators, online and offline. An additional 1% tax is paid to the regulatory body. However, not all operators have to pay this tax. There's an exception for those providing games of skill, which is distinguished from games of chance or luck. This includes operators providing daily fantasy football and other skilled games platforms. Such providers can enjoy legal tax-free operations. However, if your offer constitutes games of luck, you are expected to pay all taxes on time.
Failure to pay taxes on gross revenue can result in costly fines or revocation of the gambling license. Colijuegos and the Colombian government have aggressive measures to identify rogue operators and those eluding taxes. This includes a requirement to link casino systems with the government for real-time monitoring of gambling winnings. Colijuegos also requires operators to return at least 83% of gambling turnover to customers. In 2018, the turnover hit COP1.8 trillion (around $593 million) and at least 89% was given back to customers through various frameworks like bonuses.
Legal forms of online gambling
Like other regions with fully regulated online gambling activity, Colombia has several legal forms of gambling for its market. The country licenses domestic and offshore operators, ensuring players have access to all kinds of casino products and games of chance. Some of the popular legal online gambling options players can enjoy include:
- Interactive games – This is a broad class of casino games that includes slot machines, table games, keno, craps, Slingo, arcade and other instant win games. Slots are the leading interactive games across all regions, so players can find thousands of titles to explore. Table games like blackjack, roulette and baccarat are also in abundance.
- Poker – Online poker is one of the most popular casino products in Colombia and other regions. There are many poker variants available to Colombian punters, ranging from the famous poker hold em to exotic punto banco. Players can also enjoy live poker games with real human dealers.
- Sports betting – Online sports betting includes betting on professional sports like football, basketball, hockey and rugby matches. It also covers horse racing, dog racing and pari-mutuel betting. Virtual games and leagues provided by simulators are also legal in Colombia.
- Live casinos – These are games featuring a live human dealer that broadcasts the event from a studio. Players connect to the studio via webcams and can interact with the dealer and other players. The dealer shuffles and deals cards, spin roulette wheels, roll dice and perform various other functions of a typical casino dealer.
- Lottery and bingo – The Batolo Lottery was one of the first legal gambling options available for Colombian punters. The lottery is still popular and so are bingo games. Players can enjoy all kinds of classic 90-ball and 75-ball bingo as well as unique 40 and 80-ball variants.
Colombia boasts a legal gambling scene and Colijuegos also introduced regulations that allow operators to provide new legal games of luck. This is quite an incentive for operators and game developers to wow players by creating modern games depicting the immense technological advancements available. Currently, almost all forms of betting are legal, which results in an abundance of options for players. Whether you prefer classic reels or fancy scratchcards, many legitimate online casinos provide impressive game lobbies.
Future of online casino regulations
Colombia has trailed in one direction since the enacting of Law 643 in 1991. Law 643a also came with new possibilities and amendments in 2008 eventually led to the 2016 eGaming Act. The South American country is leading the path for many neighbors and seeks to emulate European states with thriving regulated gambling markets. While its laws are strict, Colombia allows offshore operators to serve its market, attracting investors to the country. It also has a gambling population, with up to 60% of adults involved with betting. As the country bounces back from its former drug reputation, gambling will be vital and the government is careful to ensure sustainability.
Summary
Colombia is a famous destination with tourist hotels, stunning landscapes and several things to enjoy. With over 2000 casino locations, gambling is almost inseparable from the culture. It became the first country in South America to have a legal gambling scene and continues to influence surrounding neighbors as more states ponder the prospects of regulated eGaming. There are several casinos and websites run by domestic and foreign operators with products accessible across mobile and desktop platforms. If the current trend continues, Colombia is set to become a betting hub in the region and has the framework to support a flourishing gambling scene.