Insight
COVID-19 UPDATE - LATAM Colombia
Juan Camilo Carrasco, Partner at Asensi Abogados.
Colombia: a role model for the Latin American gaming industry
Iván Mauricio Guzmán, Associate at Asensi Abogados.
Contributors Juan Camilo Carrasco joined Asensi Abogados, a boutique law firm specialised in the gaming and gambling sector with offices in Bogotá, Colombia, Madrid, Spain and Mallorca, Spain in 2015 as the head of the Bogotá office and lead lawyer for gaming and corporate law for clients in the region. Juan Camilo, in addition to his law degree has studied international business law at Harvard Law School and Centro de Estudios Garrigues and conciliation and dispute resolution at Universidad de la Sabana. Juan Camilo is currently a member of IAGA.
Ivan Mauricio Guzman is an Associate at Asensi Abogados who joined the firm in 2020 after focusing his practice as an In- House Legal Specialist for Latin America at Microsoft based in the Fort Lauderdale, Florida and Bogotá Offices. Currently based in the Asensi Bogotá office, Ivan has a law degree from Pontificia Universidad Javeriana Cali and an LL.M from the University of Miami School of Law, in addition he has studied International Commercial Arbitration at American University Washington College of Law.
juancamilo@asensi.co ivan@asensi.co www.asensi.es
Te gaming industry in Colombia is a monopoly held by the Government and is regulated under the Colombian Gambling Act, Law 643 enacted by Congress in 2001. Colombia is currently a reference for the industry in Latin America, since the structure of the law has been designed to provide efficient regulations issued by Coljuegos, the national agency. Coljuegos has been granted full autonomy to issue new rules, agreements and resolutions and, therefore, has created legal stability for investors and an environment that protects their investment with a regulator that has pro-operator attitude and full openness to allow foreign operators to participate in the local market.
Resources obtained from exploitation rights (gaming duties) and paid to Coljuegos from local and foreign entities operating in Colombia are used to fund public health services. As a result of this, by March 2020, the agency reported Exploitation Rights at COP$139.10bn (USD$37,59 million) for all verticals land-based, instant betting, lotto and online which are transferred as revenue for health services in Colombia.
In addition, Colombia has developed landmark regulations for online-based gaming, which is the first regulation of its kind in Latin America, by December 2019 turnover reached US$798m, a GGR equivalent to US$81.38m providing Coljuegos with a US$1511m profit which was also transferred to fund health services in the country. Tese regulations were put in place in 2016 and have achieved a total of 16 authorised operators in the country. By March 2020, online-based gaming produced a total of GGR US$33.483m and COP$20.24bn (US$4.5m) revenue for exploitation rights in the country.
By market share, the portfolio of the industry concentrates high regard among the public in the permanent betting (known as chance) by around 84 per cent, followed by “Baloto” at 55 per cent and regional lotteries at around 43 per cent. Online sports betting and live casino are known by 8 per cent and 5 per cent of the public respectively. However, the online gaming sector in Colombia has been steadily growing in the country. Since online gambling regulations were put in place in 2016, the market grew from US$24m online turnover to US$441m by 2018 (a 1533.7 per cent increase) and achieved US$798m of turnover on online portfolio by December 2019, representing a 2908.85 per cent increase in around two years of operations for online-based participants.
Online market participants started operations in P70 NEWSWIRE / INTERACTIVE / MARKET DATA
Colombia with an estimated GGR at COP$23.27bn (US$6.2m) in 2017, growing to a COP$198.82bn (US$52m) in 2018 and COP$309.71bn (US$81.38m) by December 2019 which has translated to sharp increases in the Regulators revenue for exploitation rights from COP$5.3bn (US$1.3m) in 2017 to COP$48.89bn (US$12.8m) by December 2019, which has resulted in higher resource transfer to Colombia’s health services.
Te openness from the local regulator to ensure that foreign participants in the gaming industry (which represent almost the entirety of the online-based market in the country) have a clear set of rules to enter the market and the overall stability that the current regulatory, banking, safety, corporate, tax and investment regulations Colombia offers to foreign investors, has been the key factor to allow exponential growth in the industry.
Tis openness has been a major factor in making Colombia one of the most stable markets for online gaming in the world and particularly in Latin America.
By December 2019, Coljuegos estimated a total of 2,761,030 active online gaming accounts, a 1091 per cent increase from 2017 in a market which is still growing along with continuous support from the regulator to adapt requirements for prospective licensees entering the market.
THE IMPACT
Colombia has been one of the hardest-hit countries in Latin America, with a total of 489,122 confirmed cases and 15,619 deaths as a result of Covid-19 as of August 17th, 2020
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