iGaming in Colombia: Opportunities within the Law

General Considerations

The iGaming landscape in Colombia is marked by the coexistence of a growing legal market and a persistent black market. Is it possible to develop a business in this area from legality? Are players and operations protected? This article will address various aspects related to the subject.

In Latin America, regulating online gambling is one of the most controversial topics. Latin American societies are relatively new in political and social terms. Most nations have been in existence for 200 years or even less. Yet, online gambling thrives in LATAM's larger and more developed societies. This is because governments have implemented specific regulations to make gambling as safe as possible. Legal gambling generates confidence, and it is precisely this that helps the acceptance and promotion of gambling. We would like to highlight the following: The president of Coljuegos, César Valencia, assured that the illegal gambling sector constitutes 30% of the betting activity in Colombia. Colombia has already implemented complete regulatory frameworks, while other countries are still in different stages of development. (Source: SBCNoticias).

Let's take a closer look at Colombia's case against this scenario. They were the first to initiate the regulatory process in the region, starting the delivery of licences in 2016.

Online Gaming Revenues

According to the regulator Coljuegos, during the fourth quarter of 2023, around 207 billion Colombian pesos, a little more than US$ 56 million, were collected from face-to-face and online gaming. The numbers have been increasing year after year, and the growth of online gaming has been sustained. Some relevant aspects are detailed below:

• It is estimated that the Colombian iGaming market has experienced an average annual growth of 25% (Source: TecnoTV)
• Sports betting represents the largest segment of the market, with 80% of total bets  (Source: Yogonet)
• Colombian players invested around USD 20,000 million in sports betting during 2023 (Source: Yogonet)
• 3,300,000 players in a country of 48 million inhabitants, 68,2% between 15 and 65 years old (Source: iGaming Columbia)

Black Market

A significant iGaming black market persists. The black market is estimated to comprise about 83% of the total market. The iGaming black market represents a major problem for the Colombian government, as it loses millions of dollars in tax revenue each year due to the black market. In addition, because it is unregulated, it exposes players to a lack of protection.

Legal Gaming in Colombia

The government implements permanent measures to combat the iGaming black market. In 2016, the government established Coljuegos, a government entity responsible for regulating online gaming, attached to the Ministry of Finance and Public Credit. The Colombian regulatory framework, together with the transparency and efficiency of Coljuegos, has generated confidence in the operation of online gaming in the country and has prevented money laundering and other criminal activities associated with online gaming. Within legality, players feel safe knowing that their bets are placed on legal and regulated platforms, contributing to the sector's sustained growth, as we saw in the previous points.

Regarding the regulatory framework, there are some points to consider before operating in the country:

• Licences: Online gaming operators must obtain a licence granted by Coljuegos and comply with strict technical, financial, and security requirements.
• Types of games: a wide variety of online gambling games are allowed, including sports betting, casino games, bingo and lotteries.
• Player protection: such as age verification, problem gambling prevention and dispute resolution, are established.
• Taxation: online gambling operators must pay a tax on their revenues.

In terms of security, Coljuegos requires operators to implement robust security measures to protect players' information, prevent fraud and guarantee the integrity of the games. These measures include:

• Data encryption: players' personal and financial information must be encrypted to protect against unauthorised access, and they cannot sell players' personal information to third parties.
• Regular audits: Coljuegos conducts regular audits of operators to verify compliance with security standards.
• Fair games: online games of chance must be fair and transparent, using certified random number generators (RNG).

Also, they have implemented a series of measures to combat the black market, including:

• Blocking illegal gambling websites: Coljuegos has blocked access to hundreds of illegal gambling websites in Colombia.
• Public awareness campaigns: Coljuegos has launched a series of public awareness campaigns to inform players about the risks of illegal online gambling.
• Sanctions to illegal operators: Coljuegos has imposed fines on several unlawful gambling operators.

New Challenges

Artificial intelligence (AI) burst onto the iGaming landscape in Colombia, driving its evolution by leaps and bounds. This advance opens a range of opportunities for the sector, providing tools to improve the customer experience and optimise platform efficiency. Incorporating AI as a fundamental element in the future of iGaming becomes imperative for the growth and competitiveness of the sector.

At the GAT EXPO 2024 event, held in Cartagena from April 9 to 11, the director of Coljuegos, Marco Emilio Hincapié Ramírez, opened a crucial debate: the implementation of AI and the use of cryptocurrencies as a means of payment in operations. This desire for openness towards new technologies demonstrates the sector's commitment to innovation and growth.

Operating legally by looking at new trends is possible and convenient in Colombia!

If you have come this far, we hope you have found the information useful. WA.Technology offers personalised advice and a full spectrum of iGaming platform solutions to help you decide to start your business in the robust and reliable Colombian market. Are you ready to explore the opportunities the iGaming market offers in Colombia? Contact our sales team today and start building your successful business.

Disclaimer:

This article has been provided by Latam Entertainment for informational purposes and does not necessarily reflect WA.Technology’s views.

Investments in any market, including Latam, should be made after thoroughly analysing and understanding the local regulatory and market conditions.