Famous for its diverse landscapes, aromatic coffee, and emblematic cuisine, Colombia is a unitary republic with a population of 51.5 million and an economy mainly driven by the agricultural, manufacturing, and service sectors. Comprising 32 departments and the capital district of Bogotá, the country is home to a gambling industry that generates over $13 billion in bets annually.
Figures from a 2019 survey suggest local gamblers tend to favor chance-based games, lotteries, sports betting, raffles, and bingo, although casino table games are also very popular in the country. All of these activities are legal under Colombian law. Many locals are starting to transition to online gambling, as roughly 68% of Colombian gamblers place their wagers on the web.
Mobile gambling apps rank second in popularity, with 25% of Colombians using them to bet. As many as 31% of locals say they play online casino games about two to three times per week. Online sports betting is also popular in the country, with 32% of online punters placing sports bets at least once a week.
The migration from land-based to online betting hardly comes as a surprise, given that Colombia was the first country in South America to legalize and adequately regulate remote gambling. The sector has experienced steady growth since licensing started in 2017. In this article, SuperCasinoSites looks at the legal landscape of Colombia’s gambling sector and the laws that regulate it.
Laws That Govern Gambling in Colombia
Between 1810 and 1991, Colombian authorities tolerated gaming houses even though such activities were not yet legally sanctioned. In 2001, the government officially legalized gambling to drive criminal elements away and curb the corruption that had long plagued the sector.
Gambling Monopoly in Colombia
General Gambling Act (Law № 643/2001)
Decree № 4144 and Decree № 4142
Gambling Monopoly in Colombia
As a result, the entire gambling industry is subject to a state monopoly under Article 336 of Colombia’s National Constitution. The government-owned entity Coljuegos (the Colombian National Gaming Authority) regulates the industry at the national level. It is authorized to award concession contracts to third parties rather than standard operating licenses.
Third parties operating under concessions must pay exploitation rights, known as royalties, instead of gambling taxes. Accordingly, Article 336 specifies that the royalties collected through these concessions must be used exclusively to fund public health services.
General Gambling Act (Law № 643/2001)
The Colombian National Congress officially authorized gambling with the passage of the General Gambling Act, also known as Law № 643/2001 (Ley 643 de 2001 in Spanish). The legislation empowered the state-owned Coljuegos to regulate and develop the gambling sector by issuing decrees, setting new rules, and granting concession contracts to gaming operators. The country hosts around 25 large commercial casinos, most of which are located in the capital, Bogota, and Colombia’s second-largest city, Medellin.
More than one hundred slot halls and video gaming machine parlors are scattered across the country. The Codere Group and CIRSA are two of the largest privately owned casino gaming operators in the local market. Authorized entities can provide gambling products at both national and regional levels.
Decree № 4144 and Decree № 4142
Decree № 4144 of 2011 (Decreto 4144 de 2011) created the National Council of Games of Chance (Consejo Nacional de Juegos de Suerte y Azar, abbreviated as CNJSA), which operates under the Ministry of Health and Social Protection. The CNJSA monitors compliance with Law № 643 at the regional level and regulates horse race wagering, chance betting, and instant and regional lotteries.
Decree № 4142 of 2011 (Decreto 4142 de 2011) authorizes the nationwide provision of various gambling products. These include land-based casino games such as blackjack, roulette, and slots, as well as bingo, raffles, sports wagering, pari-mutuel wagering, a fixed-odds game locally known as Super Astro, and novelty games. All of these products fall within the regulatory remit of the National Gaming Authority, Coljuegos.
Online Gambling Regulations in Colombia
As previously mentioned, Colombia was the first country in Latin America to introduce full-fledged online gambling regulations and, as such, has become a role model for the region. Interactive gambling officially became legal after the Colombian legislature modified Law № 643/2001 with Article 93 of Law № 1753/2015 (Ley 1753/2015).
Colombian law defines online games as those conducted via interactive channels such as websites, mobile applications, and downloadable clients. The legislation places no cap on the number of licenses, and their duration again ranges from three to five years.
Requirements for Online License Applicants
Regulatory Enforcement and Taxes
Requirements for Online License Applicants
Coljuegos grants operating permits and monitors compliance with the terms of each agreement. Various requirements apply to operators seeking to enter the Colombian online market legally. Foreign firms must establish a local presence through a Colombia-based company and manage customers’ funds via a local bank approved by the Superintendent of Finance.
The minimum equity requirement for applicants is set at $450,000. A single license covers a broad spectrum of online gambling products, except for horse race and pari-mutuel wagering, numeric games, and lotteries. Colombian customers must access licensed websites exclusively through .co domains, as .com addresses are strictly prohibited.
Additionally, operators must apply for and obtain technical system certificates from testing agencies approved by the Colombian regulator. The legislation imposes no restrictions on jackpots or promotional incentives. The theoretical return of online slots must be at least 83%.
All applicants must provide prize payment and player reimbursement guarantees of at least $200,000. Coljuegos usually requires up to two months to review license applications, provided no additional information or clarifications are necessary. The Colombian regulator has licensed many local and foreign online operators, including William Hill, Betfair, Bwin, Codere, Rushbet, and Betplay.
Regulatory Enforcement and Taxes
The Colombian watchdog has adopted the widely used practice of blacklisting unauthorized gambling sites and reporting them to the Ministry of Information Technologies and Communications. The Ministry, in turn, has the authority to order local internet service providers to block access to illegal websites. As of September 2020, the Colombian authorities had restricted access to 4,131 unauthorized offshore sites.
Similar to land-based operators, licensed gambling sites must contribute royalties and administrative fees to cover Coljuegos’ regulatory expenses (typically more than 1% of the annual fixed and variable royalties). Online gambling operators are exempt from paying Value Added Tax (VAT).
Fixed fees for online operators are set at 811 times the LMMW for the respective year of operation, plus a 1% charge on their royalties to cover the regulator’s administrative expenses.
Regarding variable fees, Article 38 of Law № 1753/2015 stipulates that remote gambling firms are taxed at a minimum rate of 15% of their gross gaming revenue (GGR). GGR represents total betting turnover minus prizes paid to customers. If an operator’s theoretical return is below 83%, the tax rate increases to 17% of turnover.
Finally, players who win more than $400 must pay a 20% income tax on their profits under the Colombian Tax Code. Gambling operators withhold this percentage from players’ winnings either immediately or during withdrawals.
Social Responsibility Policies and Advertising
Colombian law strictly prohibits providing gambling services to underage individuals or to people with mental health disorders. The age of majority in Colombia is 18 years old. Coljuegos works with its licensees to address problem gambling among local consumers.
The Juega Bien Program for Responsible Gambling
Advertising Restrictions
Anti-Money Laundering Policies
The Juega Bien Program for Responsible Gambling
All licensed online operators must promote the Juega Bien responsible gaming program and provide information about the harms associated with compulsive gambling. As part of these efforts, gambling sites must display how much time has passed since players began their betting sessions.
Colombians who gamble with locally authorized operators can also take a break from gaming. Players may set limits on their betting sessions and deposits. Remote gaming operators must offer a self-exclusion feature and prompt customers to set daily, weekly, and monthly deposit limits during registration.
Players can adjust these limits at any time. Reductions take effect immediately, while requests to increase limits become effective no sooner than 72 hours after the player confirms the change.
Advertising Restrictions
These responsible gambling policies also apply to the marketing of gambling services and products, which is permitted but subject to restrictions. All gambling-related ads must warn viewers about the risks of developing a gambling addiction. They must also promote responsible gaming and state that such activities are limited to persons of legal gambling age (18+).
Marketing materials should advise players to gamble in moderation and only for entertainment, as excessive betting can lead to addiction. Unsurprisingly, advertising unauthorized gambling products or businesses violates Colombian law.
Anti-Money Laundering Policies
Colombia is a member of the Financial Action Task Force on Money Laundering in South America (GAFISUD), an organization that unites Latin American countries in the fight against financial crimes. Formally founded in Cartagena, the organization reports directly to the international Financial Action Task Force (GAFI). It represents 14 other countries in addition to Colombia, including Peru, Argentina, Brazil, Ecuador, Uruguay, Chile, Mexico, and Cuba.
Because Colombia adheres to GAFI guidelines on preventing financial crimes, AML policies for locally licensed gambling operators largely mirror those in other countries. Businesses must notify the authorities of all suspicious monetary transactions that may be linked to money laundering or terrorism financing. Betting firms must report any single transaction over $5 million, cumulative transactions of $15 million or more, and payouts that exceed specified thresholds.
Conclusion
Colombia is a popular tourist destination, boasting numerous luxury hotels, picturesque landscapes, and, last but not least, dozens of gaming facilities. All this makes it an attractive spot for gambling enthusiasts worldwide. It was the first country in Latin America to introduce a full-fledged gambling regulatory framework, serving as a role model for neighboring countries looking to regulate their eGaming industries.
Colombian gamblers have access to a full range of gambling products, available at land-based venues or via desktop and mobile platforms. The local regulator, Coljuegos, reported a staggering 148% growth in online gambling revenue for the first half of 2021, as the sector generated a record $2.1 billion. Colombia is set to become a major gambling hub in the region if these positive trends continue.
The Juega Bien Program for Responsible Gambling
All licensed online operators must promote the Juega Bien responsible gaming program and provide information about the harms associated with compulsive gambling. As part of these efforts, gambling sites must display how much time has passed since players began their betting sessions.
Colombians who gamble with locally authorized operators can also take a break from gaming. Players may set limits on their betting sessions and deposits. Remote gaming operators must offer a self-exclusion feature and prompt customers to set daily, weekly, and monthly deposit limits during registration.
Players can adjust these limits at any time. Reductions take effect immediately, while requests to increase limits become effective no sooner than 72 hours after the player confirms the change.