Famous for its versatile 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 agriculture, manufacturing, and services 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 huge 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 the locals say they play online casino games around 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 landbased to online betting hardly comes as a surprise, given the fact Colombia was the first country in South America to legalize and adequately regulate remote gambling. The sector has been experiencing steady growth since licensing started back in 2017. In this article, SuperCasinoSites looks into 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 although such activities were not yet officially legal under local law. The government gave the thumbs-up to legal gambling in 2001 in an attempt to drive criminal elements away and curb corruption, which was rampant in the sector before the legalization.
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 on a national level. It has the remit to award concession contracts to third parties rather than standard operating licenses.
Third parties under concession must pay exploitation rights, known as royalties, rather than contributing gambling taxes. Respectively, Article 336 states that royalty proceeds obtained through such concessions must go exclusively toward the funding of public health services.
General Gambling Act (Law № 643/2001)
The Colombian National Congress officially authorized gambling with the passage of the General Gambling Act, otherwise known as Law № 643/2001 (Ley 643 de 2001 in Spanish). The legislation gave the state-owned Coljuegos the authorization to regulate and develop the gambling sector by issuing decrees, setting new rules, and granting concession contracts to gaming operators. The country is home to approximately 25 large commercial casinos, most of which are located in the capital Bogota and Colombia’s second-biggest city Medellin.
Over a hundred slot halls and video gaming machine parlors are strewn across the country. The Codere Group and CIRSA are two of the largest privately owned casino gaming operators on the local market. Authorized entities can provide gambling products on a national and regional level.
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 functions as part of the Ministry of Health and Social Protection. The CNJSA observes for compliance with Law № 643 on a regional level and regulates horse race wagering, chance betting, instant and regional lotteries.
Decree № 4142 of 2011 (Decreto 4142 de 2011) authorizes the provision of different gambling products on a national level. These include landbased casino games like blackjack, roulette, and slots, bingo, raffles, sports wagering, pari-mutuel wagering, a fixed-odds game locally known as Super Astro, and novelty games. All of these fall under 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 somewhat of a role model in 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 does not limit the number of available licenses, with their duration again ranging from three to five years.
Requirements for Online License Applicants
Regulatory Enforcement and Taxes
Requirements for Online License Applicants
Coljuegos grants the operating permits and observes for compliance with the conditions of the agreements. Various requirements are in place for operators looking to legally penetrate the Colombian online market. Foreign firms must have a local presence through a Colombia-based company and handle customers’ funds via a local bank approved by the Superintendent of Finance.
The minimum equity requirement for applicants stands 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 the licensed websites specifically through .co domains as .com is strictly prohibited.
Additionally, operators must apply for and receive technical system certificates from testing agencies approved by the Colombian regulator. The legislation imposes no restrictions on jackpots and promotional incentives. The theoretical return of the online slots on offer should be no less than 83%.
All applicants must provide prize payment and player reimbursement guarantees of at least $200,000. Coljuegos normally requires up to two months to consider the license applications, provided no additional information or clarifications are required. 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 commonly implemented practice of blacklisting unauthorized gambling sites and reporting them to the Ministry of Information Technologies and Communications. In turn, the Ministry has the mandate to order local internet service providers to block the access to illegal websites. As of September 2020, the Colombian authorities have restricted the access to 4,131 unauthorized offshore sites.
Similarly to landbased operators, licensed gambling sites must contribute royalties and administrative fees to cover Coljuegos regulatory expenses (typically over 1% of the annual fixed and variable royalties). Online gambling operators are exempt from paying a Value Added Tax (VAT).
The fixed rates for online operators stand at 811 times the LMMW for the respective year of operation plus a 1% rate over their royalties to cover the regulator’s administrative expenses.
As for the variable fees, Article 38 of Law № 1753/2015 states that remote gambling firms are taxed at a 15% minimum rate of their gross gaming revenue (GGR). The GGR represents the total betting turnover minus the prizes paid out to customers. If an operator’s theoretical return is under 83%, the tax rate increases to 17% of their turnover.
Last but not least, players who happen to win more than $400 must pay a 20% income tax on their profits under the Colombian Tax Code. Gambling operators withhold this percentage from their patrons’ winnings on the spot or during withdrawals.
Social Responsibility Policies and Advertising
Colombian law strictly prohibits the provision of gambling services to underage individuals or people who suffer from mental health disorders. For reference, the age of majority in Colombia is 18 years old. Coljuegos works jointly with its licensees to address the challenge of 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, the interface of the gambling sites must display how much time has elapsed since players have started their betting sessions.
Taking a break from gaming is an option for Colombians who gamble with locally authorized operators. Players can self-impose limits on their betting sessions and deposits. Remote gaming operators must cater to customers with a self-exclusion feature and prompt them to set daily, weekly, and monthly deposit limits on their accounts during registration.
Players have the option to adjust these limits, with reductions taking place immediately. If the customer asks for an increase of their deposit limits, the changes will take place no sooner than 72 hours after the player confirms the request.
Advertising Restrictions
These responsible gambling policies extend to the marketing of gambling services and products, which is allowed but with some restrictions. For instance, all gambling-related ads must contain messages that warn about the risks of developing a gambling addiction. Similarly, they must promote responsible gaming and inform the audience such activities are restricted solely to persons of legal gambling age (18+).
The marketing materials should contain messages advising players to gamble in moderation and for entertainment purposes only since excessive betting might lead to addiction. It makes sense that the advertising of 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 the countries in Latin America in the combat against financial crimes. Formally founded in Cartagena, the organization reports directly to the international Financial Action Task Force (GAFI). It represents 14 other countries apart from Colombia, including Peru, Argentina, Brazil, Ecuador, Uruguay, Chile, Mexico, and Cuba.
Since Colombia adheres to the GAFI guidelines for financial crimes prevention, the AML policies for locally licensed gambling operators largely coincide with those in other countries. Businesses must alert the authorities about all suspicious monetary transactions that may be associated with money laundering or terrorism funding. Betting firms must report all single transactions over $5 million, cumulative transactions of $15 million or more, and payouts exceeding certain amounts.
Conclusion
Colombia is a popular tourist destination, boasting numerous luxury hotels, picturesque landscapes, and last but not least, dozens of gaming facilities. All this renders it an attractive spot for gambling mavens worldwide. It was the first state 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, accessible on landbased premises 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 the record $2.1 billion. Colombia is set to become a major gambling hub in the region if these positive trends continue to manifest.
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, the interface of the gambling sites must display how much time has elapsed since players have started their betting sessions.
Taking a break from gaming is an option for Colombians who gamble with locally authorized operators. Players can self-impose limits on their betting sessions and deposits. Remote gaming operators must cater to customers with a self-exclusion feature and prompt them to set daily, weekly, and monthly deposit limits on their accounts during registration.
Players have the option to adjust these limits, with reductions taking place immediately. If the customer asks for an increase of their deposit limits, the changes will take place no sooner than 72 hours after the player confirms the request.