Coljuegos must promote the growth of the gaming industry and, at the same time, control and enforce the compliance of the licensed operators. Administrative, penal and financial procedures are commenced against illegal operators or non-compliant operators. Administrative procedures are usually commenced for breach of contract regarding reporting or technical compliance.

As the regulator has, by law, the power and jurisdiction to be judge and party, it is very common to begin the sanctioning process against non-compliant operators as a persuasive measure. This penalty comprises the difference between the balance to be paid determined by the administration and the balance that was declared by the operator.

Contractual fines and the penalty clause are enforced by means of the contractual procedure contained in Article 86 of Law of Sanctions regarding exploitation rights are enforced by means of the punitive administrative procedure contained in the Administrative Code Law of Natural persons who illegally operate either online or land-based games of chance without a concession contract or authorisation by Coljuegos can be penalised with fines that range from COP80 million to COP million.

The illegal operation of games of chance is a crime that is penalised with between six and eight years in prison and with disqualification from operating games of chance for up to five years. Commercial establishments and goods involved in the illegal operation of games of chance can be the subject of expired ownership processes.

The elements of games of chance involved in the illegal operations can be confiscated and subsequently destroyed. The Gambling Act and the regulatory decrees have stated two types of fees for the gambling industry: exploitation rights royalties and administrative fees.

Additionally, the majority of gambling activities — both national and regional — are charged with VAT, except internet-operated games and regional lotteries.

Exploitation rights are levied on all national and regional games. However, as the amounts collected from them go to the health and pension system rather than the Tax Authority, this is not technically a tax but merely a public charge.

The law prohibits any fees, stamp duties or taxes of a municipal, district or departmental nature, other than those that must be paid to the national government. It is important to bear in mind that the level of enforcement and surveillance by the Tax Authority in respect of gambling operators is the same as for companies of any other business sector.

As previously stated in 4. The legal minimum wages are:. As mentioned earlier, VAT applies to national and regional games, except for internet-operated games and regional lotteries. As an example, included here is a description of the application of this tax in relation to slots, casino games roulette, poker, blackjack, etc and bingo — all of them, of course, understood as land-based.

In order to better understand the application of VAT on these games, note the following variables for the calculation of this tax:. UVT is an index tributary value updated every year by the government in accordance with inflation see 3. It is also important to note that VAT cannot be part of the value of the stake to be placed by the player.

The operator will have to withhold this amount at the time of the withdrawal of funds or a prize payment. It applies to withdrawals over approximately USD There have been two unsuccessful draft bills regarding responsible gambling. The media is still praising the Colombian online betting market, and rightfully so.

It is a market that has consistently surpassed its own goals with rapid annual growth. The close of the year revealed the following figures: a turnover of USD6. The leading vertical remains real-event betting, especially sports betting, followed by slot machines and live casinos.

The latest figures for indicate a first-quarter turnover of USD2 billion, GGR of USD million, and tax payments nearing USD18 million. These figures depict a healthy and growing market that, after seven years of regulation, continues to develop, with experts suggesting there is ample room for further growth.

The only reform that was approved was the tax reform that will be in force by January , which will have a significant effect on salaried employees. The control entities of some economic sectors such as oil and gas and health, in which the gambling sector is indirectly included, considering that the health control entity also controls the gambling regulator due to the financial sustainability which comes from the gambling taxes, have been reduced to the minimum number of employees, generating a delay in their responses.

On 20 October , Coljuegos published what could be understood as the regulation on advertising for internet-operated games, the "Advertising Resolution", after an unusually short public consultation period of five days. With over comments on the initial draft and no second consultation round, it was published definitively.

The Advertising Resolution has a suspensive effect until January for existing operators and immediate applicability for new operators, creating a peculiar distinction that could affect equality and contractual economics.

Regulations aimed at resolving or preventing a problem typically come with technical studies identifying the issues to address. However, in this case, the Advertising Resolution lacks any technical study or justification based on figures that would pinpoint the problems.

It simply puts forward a hypothetical situation based on the overwhelming possibility of advertising without specifying the problems that arise. Another deficiency in regulatory technique is the absence of definitions for the terms used throughout the Advertising Resolution, and the few provided are insufficient to enable an understanding of the concepts and statements within the normative framework.

It is noteworthy that the Advertising Resolution an administrative act seeks to regulate trade mark law in Colombia, exceeding its normative powers. Lower-category norms must align with higher ones. The hierarchy of norms dictates that those of higher rank, with the Constitution at the top, validate those further down in the hierarchy.

The purpose of this harmony is to establish an axiological order that provides for a regulatory system ensuring its internal coherence. The author believes there is a contradiction with this hierarchical principle in Article 5 of the Advertising Resolution, as it seeks to limit the use of third-party trade marks not owned by the gaming operator or its business group.

The wording of this Article is ambiguous and contradictory to superior norms in trade mark law. This is also the case with the prohibition to mention or use another operator's trade mark.

Currently, in Colombia, the national league is sponsored by an online gaming operator, which leads one to think that no operator can mention the name of the football league. These normative provisions blatantly exceed the power of Coljuegos, as it is not an authority for trade marks and patents in Colombia.

For new operators, it sets an investment cap for the first six months, meaning that new operators will barely be able to afford an aggressive advertising campaign.

In general terms, the Resolution has several normative defects that operators will surely analyse, especially considering that the included provisions are likely to lead to a decrease in the online gaming industry and, consequently, a reduction in the revenues injected into the healthcare system in Colombia.

In ten years of normative developments, this is the first time that industry players have experienced a regulation that tends to regress and restrict rather than encourage growth.

Finally, various provisions of this norm are surprisingly similar to the Spanish Royal Decree , a norm that is currently under legal challenge in Spanish courts. In light of the normative suspense of this Advertising Resolution, it is hoped that the regulatory authority will find cause for a review.

Agreement 8 of included some regulations regarding responsible gambling, such as a Responsible Gambling Programme and a self-excluding mechanism for players. However, on 16 December , Coljuegos issued Resolution the "RG Resolution" , which regulated in extenso many aspects of responsible gambling such as the scope of the self-excluding mechanism, by including more warnings regarding responsible entertainment, requiring operators to be more prominent before the users and the regulator, and having RG implemented programmes.

The RG Resolution should have been in force from December ; however, the implementation period was extended to 16 April , and then to 16 October Finally, Coljuegos decided to move this last deadline to March , considering that other topics were more important to put in place.

The Superintendency has been investigating the use of advertising in the sector with an emphasis on the use of influencers by operators. The fact that this important public entity has started to focus on the sector demonstrates that the industry has become an important economic player.

The Superintendency found hat the misleading advertising came from streamers that were not engaged with or related to gambling operators. The Superintendency stated that if an influencer advertises without any contractual relationship with the gambling operator, the influencer will act as an advertiser and will respond as such to any claim.

Coljuegos is the governmental agency with the power to oversee the performance of obligations under a concession contract and the compliance with the regulations applicable to the operation of online games of chance. Since the new government came into power, Coljuegos has started a new campaign to modify several aspects that were already regulated, as well as defining new financial impositions.

New requirements have been introduced for new operators and those that are interested in renewing their concession contracts. The previous annex only required the inclusion of i the income projection within the term of the contract, discounting the bonuses and prizes, and ii the annual fixed exploitation rights and administrative expenses, in order to calculate the estimated value of the contract.

In accordance with the new Requirements Resolution, operators need to support the projections included in the estimation of the contract template with a technical study to prove that the estimated value of the contract is in line with the market.

Coljuegos added restrictions to the instant prize games regulation as it considered that the existing scope was too abstract. Coljuegos previously published a draft regulation for the industry to comment on; however, Coljuegos issued the new instant prize games regulation without considering the comments made.

On 7 November , Coljuegos issued Agreement 6 of , where the definition of the instant prize games did not change, but it specifically determined the games and brands that could be offered by the operators and which ones require prior authorisation from Coljuegos.

Chambers and Partners website Toggle navigation. Gaming Law Last Updated November 28, Law and Practice Trends and Developments. Law and Practice.

Expand All. Recent developments that have impacted on the gaming sector are summarised as follows. Land-Based On 25 September , Coljuegos published a draft project to govern advertising in the gambling sector.

Online As mentioned above, the draft regulation to control and restrict advertising will be applicable for the gambling sector. Lotto There are no recent developments regarding Lotto.

Social Gaming There have been no recent trends impacting on the Colombian social gaming market. Esports Coljuegos issued a legal concept under Resolution to the effect that esports may be offered as part of the non-sports real events product. Esports may be offered through fixed-odds betting or through an exchange.

Fantasy Sports Given that fantasy sports may be offered as part of the real sports events product, esports are available under the online licence. Skill Gaming There have been no recent trends impacting on the Colombian skill gaming market. Jurisdictional Overview. Operators are entitled to apply for any of the following products: betting on real sporting events and real non-sporting events; virtual games; bingo; slots; blackjack; roulette; baccarat; poker; live casino; and instant prize games.

Betting This includes bets on real sporting events and bets on real non-sporting events. Bingo Article 1. Slots and Casino Games The online gaming regulation offers a detailed definition of slots, roulette, blackjack and baccarat as part of the gaming portfolio to be offered by an operator.

Lotteries It is not permitted to provide betting on the results of lotteries, nor may bets be placed on real events similar in style to lotteries. Poker Poker is regulated and certain rules regarding tournaments are included in the regulation.

Social Gaming Social gaming is not specifically mentioned in any of the gaming regulations in force. Online Gaming Offered On-Premises An operator that has a contract licence with Coljuegos to operate online games — including bets on actual sporting events, bets on actual non-sporting events, virtual games and instant prize games — is allowed to offer a portfolio of these listed games through local establishments, but only where the following criteria or a combination thereof apply: casinos, bingos and premises where other games of chance are commercialised ISIC Code ; hotels included in the National Tourism Register; various additional economic activities can be performed; bars, restaurants and similar establishments; postal services and money transfer services; and online recharge and recharge card PINs for telephones.

Coljuegos, as the regulator, grants the authorisation through a concession contract to operate any of the following games: poker; roulette; METs; spherometers; bingo; other casino and table games; and racing and virtual sports betting. Poker Under the Gambling Act, poker is categorised as a land-based game and must be included as a type of game authorised to be offered on the premises of the operator.

Bingo Bingo in Colombia is part of localised gaming and, for the purpose of its authorisation, a minimum number of seats is established depending on the number of inhabitants of the municipality in which the game is to be offered.

Gaming Machines METs are defined by having an entry point for coins or notes, which allows the player to participate and receive their prizes. Casino Games Roulette, blackjack, craps and baccarat are among the gaming products generally permitted.

Lotteries are organised by the following, either directly or through an association or third parties: Bogotá, as the capital district; the Colombian Red Cross, which has the legal authority to exploit a lottery that is traditionally operated to raise funds; and those municipalities that were exploiting lotteries before the regulation came into effect.

Legislative Framework. Specific framework for the monopoly of games of chance: the Gambling Act; Decree of — modifies the structure of Coljuegos to specify new functions; Single Regulatory Decree of — compiles norms for the industry; and Law 80 of — the framework for government contracts.

Measures against money laundering: Resolution of — AML requirements for operators; Coljuegos Resolution of May ; and Decree of — expands the list of politically exposed persons PEPs and complements the KYC due diligence process. Responsible gambling: Resolution of — responsible gambling requirements for operators; and Resolution of Administrative, fiscal and criminal disciplinary framework: The Gambling Act Articles 43, 44 and 46 ; Decree of ; and Law of — the Criminal Code.

Punitive administrative procedure: Law of Article 86 ; Law of — the Administrative Code; and Law of Article Tax framework: the Tax Statute Article ; and the Gambling Act Article Online The specific legal texts that are in place and applicable to online gambling activity in Colombia are as follows.

The Gambling Act. Resolution — legal requirements for setting up the conditions and guarantees for applicants, amended by Resolution and Resolution The technical requirements document, which includes: the technical standards for internet-operated games amended with the last version on 5 October ; and the vault inspection system design reference document, amended with the last version on 5 October XSD ; and the standard procedure for signing, encrypting and compressing XML files in the inspection system.

The novelty games category includes: pre-printed lotto; instant lottery; online lotto in any of its forms; sports or event-based bets and all internet-operated games; and those operated through any other kind of information technology not requiring the presence of the bettor.

The key offences that can be committed include the following. Performing gambling activities without a proper licence concession contract.

Offering or selling games of chance to minors or people suffering from mental illness. The circulation, sale or operation of games of chance if they are related to — or involve — unlawful or prohibited activities, goods or services. The circulation, sale or operation of games of chance that: have not been authorised by the relevant authority; or ignore the rules or authorised limits of the relevant game.

Not permitting the control, inspection and monitoring of relevant information systems by the corresponding authorities. Not declaring or paying the exploitation rights within the applicable periods. The general consequences of non-compliance with obligations are set out as follows.

Breach of Contract Acts and omissions that constitute a breach of contract include: not providing the performance guarantee; not complying with AML regulation; not complying with the contractual obligations and their appendices ie, technical requirements and data model documents ; and evasion of exploitation rights and administrative cost.

Breach of contract is punishable with: financial penalties see Operating Games While Being Disqualified This is punishable with: criminal proceedings against those legally responsible — the unlawful exercise of monopoly profit activities is defined as a crime by Colombian law and exploitation rights are considered public resources, hence non-payment of such resources may lead to tax liability proceedings; invalidity and termination of the administrative act and termination of the contract; and sanctions that range from fines to criminal and tax liability.

Licensing and Regulatory Framework. Land-based casinos and bingo. National raffles and promotional games. Novelty games such as: online gaming; online lotto Baloto ; Super Astro a fixed-odds betting game ; and pari-mutuel sports betting and betting on sports events.

Recent or forthcoming changes to the licensing and regulatory framework include the following. Some changes are expected in AML requirements, advertising limitations, and the development of more types of games. Coljuegos is expected to issue rules that will require a licence for B2B providers to operate in the Colombian market.

Furthermore, in October there were changes to the technical requirements for online gambling in Colombia. Now, the regulations allow Venezuelan aliens with temporary migrant permits to register and play games of chance.

The concession contracts are subject to two essential rules: the duration period may not be less than three years, nor more than five; and the selection of concessionaries and other issues related to public tenders shall be governed by Law 80 of The operator must provide to Coljuegos, through a bank legally established in Colombia or an insurance company, a guarantee that covers the following risks: compliance with the concession contract; salaries and legal benefits; and the payment of prizes.

Online The online gaming regulation does not specify a limited number of licences, nor a specific period when the licences are available.

The guarantees requested from operators are as follows. Compliance insurance guarantee covers: a performance bond to cover the obligations of the contract and sanctions; and salaries and social benefits.

Liability guarantee civil tort liability guarantee. The value of the coverage must be updated annually. Land-Based The response to the authorisation request must be issued within a term not exceeding 30 days following the filing of the petition.

Online Once an application is received, the regulator has a deadline of two months for making a resolution or requiring additional information or clarifications. As previously discussed, exploitation rights apply to national and regional games. There are two types of exploitation right: fixed — an annual fixed rate applicable to internet-operated games, calculated as times the legal minimum monthly wage per year of operation equivalent to approximately USD, ; and variable — a monthly variable rate applicable to land-based and online games.

Land-Based Gambling. The following recent changes are impacting on the land-based gambling sector. Online Gambling. The operation of new games through third parties must be carried out by legal persons who have concession contracts with Coljuegos, under: the terms defined by the specific legal framework for games of chance; the General Statute for Public Tenders in Public Government; and the regulatory norms for such statutes or any provision modifying or replacing them.

Coljuegos is actively studying banking alternatives in the Colombian financial system. Financial Requirements With the new Resolution , Coljuegos is requesting a technical study that provides support for the numbers presented at the business plan.

Responsible Gambling RG , Also Known as Safer Gambling SG. The Resolution included a broad set of regulations that operators must implement before 16 December , which concern topics such as: control of pathological gambling; self-exclusion; advertising; and personnel training.

Gambling is entertainment, play in moderation. Sale to minors is prohibited. Being responsible is part of gambling. Anti-money Laundering AML.

The AML legal framework is based on the following regulations: Law of ; Law of , which set up the Financial Information and Analysis Unit Unidad de Información y Análisis Financiero , or UIAF ; Single Regulatory Decree of ; Law of — the Criminal Code; Law of — rules for the prevention, detection, investigation and penalisation of terrorist financing; Resolution of — AML requirements for operators; Coljuegos Resolution of May ; and Decree of — expands the list of PEPs and complements the KYC due diligence process.

Operators have a disclosure duty, both at an internal and an external level, as follows: internal level — the compliance officer must be informed about any transaction that may be related to money laundering or terrorism financing and, specifically, those included within the alert signals provided in the law; and external level — operators must inform both the Colombian Intelligence Directorate and the UIAF.

Special attention must be paid to the following control instruments: alert signals; technological infrastructure and electronic consolidation of transactions; and annual training. Operators must ensure that the operation of games is not affected by: fraud; defects or interventions aimed at changing the probability of predictions; or elimination of the random element.

The following must be reported: individual transactions of COP5 million or more; multiple transactions that total COP15 million or more; and the payment of prizes over certain amounts depending on the type of game. Operators must provide a code of conduct for their employees.

In Colombia, all commercial entities should comply with the Consumer Protection Statute, which mandates the following: the protection of consumers against risks to their health and safety; the access of consumers to adequate information; the education of the consumer; the freedom to establish consumer organisations and the opportunity for those organisations to make their opinions heard in the decision-making processes that affect them; and special protection for children and adolescents, as consumers, by the provisions of the Childhood and Adolescence Code.

The Gambling Act sets forth the following limits on marketing and advertising: no encouraging false expectations among players regarding gains; no advertising designs or content addressed to minors; and no advertising where minors might be present, regardless of the media used for its transmission.

Limits to the use of brands over other operators. The authors understand that this will be applicable when using the name of leagues sponsored by other operators. The investment limitations on advertising and sponsorship, due to the amount of gaming duties exploitation rights paid during the previous year.

This means that the more you pay to the regulator, the more you are authorised to invest. The limits are measured in Legal Monthly Salaries. New operators will be allowed to invest up to 80, LMS COP This is equivalent to USD23 million.

Operators will need to disclose an investment plan for advertising for the year to come, which cannot surpass the authorised range. Limits to professional sports teams to only accept sponsorships from authorised operators.

Limits to the conditions on how advertising should be promoted through social media, digital media, and others. This also includes concepts about responsible gambling and risk behaviours, without defining the scope of those elements.

Inclusion of certain reporting obligations about safer gambling measures. Acquisitions and Changes of Control. There are no distinctions made for passive investors. Coljuegos can impose the following financial penalties. The penalties are enforced through the insurance guarantee, as a claim for breach of contract.

Royalties Exploitation Rights As previously stated in 4. The legal minimum wages are: legal minimum monthly wage LMMW — COP1 million; and legal minimum daily wage LMDW — COP33, At the national level The following applies at the national level.

Bingo: between one and three LMDW s ; for municipalities under , inhabitants and cards of up to COP — one LMDW; for municipalities under , inhabitants and cards of more than COP — one-and-a-half LMDWs; for municipalities with more than , inhabitants and cards of up to COP — one LMDW; for bingo cards of COP to COP — one-and-a-half LMDWs; for bingo cards of more than COP — three LMDWs; and for interconnected chairs, no bingo card will pay a lower rate than that established for seats.

VAT As mentioned earlier, VAT applies to national and regional games, except for internet-operated games and regional lotteries. The following examples illustrate how VAT is calculated for the different land-based games. VAT for land-based slots For slots terminals, the taxable monthly base per terminal is UVT VAT for casino games table games For casino games, the taxable monthly base per table is UVT VAT for bingo For bingo, the taxable monthly base per seat is UVT3.

Anticipated Reform. Trends and Developments. Colombia — a Growing Market for Online Gambling The media is still praising the Colombian online betting market, and rightfully so. Restriction on Advertising On 20 October , Coljuegos published what could be understood as the regulation on advertising for internet-operated games, the "Advertising Resolution", after an unusually short public consultation period of five days.

Responsible Gambling Agreement 8 of included some regulations regarding responsible gambling, such as a Responsible Gambling Programme and a self-excluding mechanism for players.

Coljuegos Coljuegos is the governmental agency with the power to oversee the performance of obligations under a concession contract and the compliance with the regulations applicable to the operation of online games of chance.

New requirements for concesssion contracts New requirements have been introduced for new operators and those that are interested in renewing their concession contracts. Copyright © RouletteSimulator.

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