The gaming market in
Colombia is the first jurisdiction in Latin America to set up a regulated
online gambling environment. The eGaming Act was approved in 2016, and since
then, the Colombian gambling market has been open to licensed operations.
Colombia and Latin America have been targeted by major players in the industry
due to the immense potential the region holds. Recent studies point towards a
spike in demand for online gambling services in past years in the area. That
has led to a surge in the number of gambling operators and service providers
becoming interested in investing in local markets. The positive reaction is
that multiple jurisdictions are considering the possibility of legalising
online gambling and opening up their markets for online gaming with licensed
operations.
Paving the way for Latin America with
Legislation
Colombia is
essentially paving the way for countries like Mexico and Brazil to follow suit
and fine-tune and update their existing gambling laws meet contemporary demand.
Colombia is moving away from its notorious status as a drugs capital. With
recent headway made to end decades of conflict and revolutionary between
militia groups, Colombia is finally emerging from that shadow. Colombia’s
emergence as a jurisdiction for online gaming stems from Law 643, that is a
2001 provision aimed at increasing regulation of the gambling industry. Over
60% of Colombian adults regularly place wagers and are enthusiastic about
gambling. Land-based casinos, slot parlours, bingo and lotteries are currently
legal in Colombia. The state passed a set of laws in 2008 outlining the rules
for the operation of slot halls and casinos. All operators were required to
abide by the new set of regulations to continue operating in the country. The
law stipulates casinos can only operate in commercial venues with the main
activity being gambling. All electronic gambling games must be connected to a
national information database network, and also follow the protocols.
Colombian eGaming Act
The Colombian government
introduced measures to block any gambling website that does not follow proper
licensing procedures. The Colombian eGaming Act contains a set of rules that
govern the operation of online cash gaming activities, including poker, casino
games, and sports betting. Instead of having to obtain separate licenses for
every type of gambling, operators can opt for one license covering all
activities. Moreover, to operate legally in Colombia, operators need to pay a
licensing fee of around $200,000 a year and 15% tax on gross gaming revenues.
Colombian Gambling Authority
The gaming industry in
Colombia is regulated by a governing body, just like other jurisdictions. The
El Consejo Nacional de Juegos de Suerte y Azar (Coljuegos) ensures operators
follow the protocols and legal requirements. The organisation replaced the
defunct Empresa Territorial para la Salud (ETESA) in 2011 due to allegations of
rampant corruption. The Coljuegos was responsible for drafting new gambling
legislation and regulations, enabling it to exert a tighter grip on gambling
activities and increase revenues.
Building on the Past
The Colombian
government was restructured under a new Constitution in 1991, and Law 643 was
enacted. The objective was to organise the prevailing, unsupervised collection
of casinos, bingo halls, and slot parlous. However, by 2001, gambling was
entirely controlled by underworld figures and paramilitary organisations that
plagued the country for generations. The new rules proved successful, and under
the guidance ETESA, Columbia saw its tax revenue from gambling increase by over
500%. Nevertheless, up until 2008, illegal gambling was rampant to such an
extent that 20% of all betting on the county was unlawful, and 20,000 out of
the country’s 65,000 slot machines were unlicensed. ETESA issued ten new gaming
licenses by 2009, extended operations of 9 other venues, and renewed 22 permits
for existing gambling enterprises. Colombia is only rivalled by Argentina in
terms of South American casino operations. Cartagena, San Andrés, and Bogotá
are home to many casino establishments. ETESA was disbanded in 1012 following a
series of corruption scandals; however, the agency has been replaced by
Coljuegos.
A Growing Market and Future Challenges
Colombia has a
population approaching 50 million and an expanding economy that is fast
becoming a hotbed for gambling activities. One of the most significant
challenges the Coljuegos faces is to modernise the existing system of issuing
gambling licenses to regulate the online gambling industry. A new draft was
presented by the Coljuegos in 2016 outlining the new regulations for online
gambling. Changes in Colombian gambling laws means operators need more starting
capital; however, it will help players develop a sense of trust. Prior to the
Coljuegos taking control of gambling activities in Colombia, the system was
rife with corruption and illegal gaming activity. The association was formed to
eliminate bribery and illicit activities, thereby creating realistic
regulations that fully reflect modern gambling trends, and increase revenues.
These positive changes are already attracting betting companies to set up
operators in Colombia and growing revenues through taxes and licenses. The
Colombian gambling regulator Coljuegos has already granted an iGaming license
to locally owned betting company Aquila Global Group, which was the first
authorised by the regulatory body. Colombia’s regulated online gambling market
closed strongly in 2019, while over 1.7m new customers registered in 2018. Colombia
has steadfastly persevered through years of turmoil to become a shining example
for South American countries to follow in terms of gambling legislation. The
online gambling industry in Latin America is about to be transformed, and
Colombian law is the catalyst!