Gaming Law 2023 Comparisons

The gaming industry in Colombia is a monopoly held by the government at the constitutional level and is regulated under Law 643 of the Colombian Gambling Act 2001 (the “Gambling Act”). The Gambling Act organises the administration and control of the gaming industry at two levels – national and regional. At the national level, the administration and control of the gaming industry is undertaken by Coljuegos (the national gaming authority). At the regional level, administration is undertaken by the corresponding regional government, and is controlled by the National Council of Games of Luck and Chance (CNJSA) and by the Health Superintendency.

Having received a monopoly over all kinds of games from the government, the regulator (regional or national) grants concession contracts instead of licences and collects exploitation rights (royalties) instead of gaming taxes. These exploitation rights are paid when the games of chance are operated by third parties under a concession contract or by specific authorisation. These resources are used to fund public health services.

The resources obtained from exploitation rights (gaming duties) are used to fund public health services.

Recent developments that have impacted on the gaming sector are summarised as follows.

Land-Based

On 25 September 2023, Coljuegos published a draft project to govern advertising in the gambling sector. Technical standards and connectivity conditions for METs were also put in place. 

Online

As mentioned above, the draft regulation to control and restrict advertising will be applicable for the gambling sector.

The Responsible Gambling (RG) regulation enforcement has been postponed again until March 2024. In 2021, Coljuegos produced Resolution 20214000036784 to tackle pathological gambling (see 7.1 RG Requirements for further details). This Resolution includes a broad set of rules that the operator must implement by 15 March 2024. 

By the date of this publication, a draft was published for public comments, amending the online regulations with regards to instant prize games. The draft included certain restrictions for operators to offer Keno under this category. As this is in a draft stage, the authors cannot yet provide further comments.

Lastly, on 22 September 2023, Coljuegos issued Resolution 20231200017474 modifying one of the requirements for licence applications. Now, it is a requirement that the interested party obtain a benchmark study that supports the proposed numbers presented in the business plan.

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 20194000840100001 to the effect that esports may be offered as part of the non-sports real events product. Therefore, in order to offer betting on esports, a general gambling licence approved to offer bets on real non-sporting events is required, and the provider must be duly certified and integrated in compliance with technical requirements and Colombian gambling regulations.

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.

Blockchain or Cryptocrrency

Blockchain was mentioned in Coljuegos’s Strategic Plan for IT of Coljuegos. Cryptocurrency is not allowed for internet betting.

Online gaming falls into the category of novelty games under the national level of regulation. The licensing regime and the operating conditions are set out in the Online Gaming Regulation (“Agreement 8/2020”), which covers all kinds of gambling. The interested party must comply with the legal, technical and financial requirements, and must list the games it wants to offer in its gaming portfolio. 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. Bets may be offered in a fixed-odds capacity or in the exchange betting format.

It is prohibited to offer pari-mutuel betting on sporting events as this is part of a specific licence in a different category. Horse-racing events are also not covered, as they are regulated at the regional level. The law states that it is forbidden to take bets on the results of real events, such as casino table games, slots and bingo, where the results are defined by a random number generator.

Bets on the results of national political events are also forbidden to operators. The regulation also sets out special attributions and prohibitions on events related specifically to bets on financial markets and cryptocurrencies.

Bingo

Article 1.3.6 of Agreement 8/2020 includes a definition of bingo as a pari-mutuel game and includes a standard set of rules that should govern the game. 

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. Live casino could be streamed from local casino rooms in Colombia that are integrated within the licensed operator’s online platform or from specialised studios abroad.

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. However, traditional lotteries and instant betting may offer recently regulated scratch-card games as instant prize games through online operator platforms.

Poker

Poker is regulated and certain rules regarding tournaments are included in the regulation. The law states the concept of co-organised operations, which is intended to create liquidity among the operators with a licence in Colombia. International liquidity is not allowed.

Social Gaming

Social gaming is not specifically mentioned in any of the gaming regulations in force. It should, in any case, be reviewed on a case-by-case basis to verify that the game does not include the essential elements to be categorised as gambling.

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 9200); 
• 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.

An operator licensed with a concession contract is solely responsible in the eyes of the law and the regulator. A retailer that offers real sports events bets/fixed-odds bets and virtual events acts under an extension of the operator’s authorisation (eg, as a franchise). 

The licensed operator should verify that the establishment offering the option to bet on sporting events complies with the aforementioned criteria (or combinations thereof) and always includes the commercial activities known under the International Standard Industrial Classification as games of chance and betting activities (ISIC Code 9200) – or anything equivalent to it.

The regime for land-based gambling is under national regulation. 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.

Land-based gaming is commonly known as localised gaming, which must be operated by legal entities in commercial establishments, where the physical presence of the player is a necessary condition to bet.

For land-based casinos, the minimum number of gaming instances required for authorisation is 80 in total per concession contract, and the minimum per establishment depends on the number of inhabitants the municipality has, pursuant to Decree 1905 of 2008 and Decree 1144 of 2010. The quantity of games is regulated based on the size of the municipality/city or region, according to the National Department of Statistics.

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. According to Colombian law, slot machines can only be operated in casinos and at commercial premises that comply with the relevant regulation.

The regulation of METs permits the operation of slots in casinos and other establishments such as hotels, restaurants and bars, and keeps the same certification conditions as those in casinos.

The regulation for interconnecting METs requires that all slots be connected to the regulatory reporting system. For control and reporting purposes, all the slots and other gaming machines must be integrated into a system that is connected to the regulator and that allows access to all the information from each machine. The software and the system must be certified by an authorised laboratory before the regulator.

Casino Games

Roulette, blackjack, craps and baccarat are among the gaming products generally permitted. The law includes the category of “others” for providing broad gaming offers.

The law states that a “casino” is defined as an establishment dedicated exclusively to the operation of localised games that require the presence of the person in order to be played.

Virtual Sports/Racing Betting

These are regulated as part of the land-based portfolio, with a specific set of rules governing the legal, technical and financial conditions for such games to be offered. The conditions are stated with detail in Agreement 14/2013 and Agreement 06/2015. No applications have been received for a licence to operate these games; however, under a different modality and conditions, they may be offered through the online verticals.

Lotteries and Permanent Betting

Lotteries and permanent betting (commonly known as “chance”) are regulated at the regional level, which means that the authority that supervises their operation is the National Council of Games of Luck and Chance (Consejo Nacional de Juegos de Suerte y Azar, or CNJSA).

Lotteries are a type of game carried out on a periodic basis by an authorised legal entity. Such entity issues indivisible or fractional tickets – which are each singled out by a numerical combination and other characters on display, at a fixed price – and puts them into circulation. The operating entity is bound to award a previously fixed amount of money as a prize to the holder of the lottery ticket containing a combination of numbers (or pre-established approximations thereof) that coincide in their order with the one obtained at random in a public drawing carried out by the operating entity.

These games are administered at a regional level. 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.

Permanent betting, known as “chance”, is a game in which the player states the value of their bet manually or systematically on an official form and chooses a number of no more than four digits. If that number matches the result of the top prize of the lottery (or a game authorised for that purpose), the bettor wins a prize in money, in accordance with a predefined prize plan and as authorised by the national government by regulatory decree. The responsibility for administration also lies with the regional government.

Horse-Race Betting

These are among the regional-level games under the control of the CNJSA and were regulated in detail under Agreement 179/2015. Responsibility for administration lies with the regional government of ‒ or the entity who holds the monopoly in ‒ the district in whose jurisdiction the game will operate.

The monopolistic regime in Colombia is set at the constitutional level in Article 336 of the Colombian National Constitution. The National Congress has issued the Gambling Act. The regulatory framework for games of chance is referred to in the following instruments, depending on the regulatory subject matter or its relation thereto.

• Specific framework for the monopoly of games of chance:
1. the Gambling Act;
2. Decree 1451 of 2015 – modifies the structure of Coljuegos to specify new functions;
3. Single Regulatory Decree 1068 of 2015 – compiles norms for the industry; and
4. Law 80 of 1993 – the framework for government contracts.
• Measures against money laundering:
1. Resolution 20195100044514 of 2019 – AML requirements for operators;
2. Coljuegos Resolution 20215000012784 of May 2021; and
3. Decree 830 of 2021 – expands the list of politically exposed persons (PEPs) and complements the KYC due diligence process.
• Responsible gambling:
1. Resolution 20214000036784 of 2021 – responsible gambling requirements for operators; and
2. Resolution 202334000007094 of 2023.
• Administrative, fiscal and criminal disciplinary framework:
1. The Gambling Act (Articles 43, 44 and 46); 
2. Decree 4643 of 2005; and
3. Law 599 of 2000 – the Criminal Code.
• Punitive administrative procedure:
1. Law 1474 of 2011 (Article 86);
2. Law 1437 of 2011 – the Administrative Code; and
3. Law 1150 of 2007 (Article 17).
• Tax framework: 
• the Tax Statute (Article 420); and
• the Gambling Act (Article 48).

Online

The specific legal texts that are in place and applicable to online gambling activity in Colombia are as follows.

• The Gambling Act.
• The Online Gaming Regulation (Agreement 8/2020), which comprises all novelty games, and its last amendments, Agreement 2/2021 from March 2021 and Agreement 2 of 2022, which include new types of ID that are authorised to register a player account.
• Resolution 2016120025334 – legal requirements for setting up the conditions and guarantees for applicants, amended by Resolution 20201000008294 and Resolution 20231200017471.
• The technical requirements document, which includes:
1. the technical standards for internet-operated games amended with the last version on 5 October 2022; and
2. the vault inspection system design reference document, amended with the last version on 5 October 2022.
• The data model document, which includes:
1. the XSD file guide (Archivo_Guia.XSD); and
2. the standard procedure for signing, encrypting and compressing XML files in the inspection system.

The technical requirements document, as well as the data model document, are encompassed within the concession contract as appendices and are therefore contractually binding on the operator.

The Gambling Act defines “games of chance” as games where, in accordance with specific rules provided by the law and regulation, a person acting as a player makes a payment for a bet ‒ or the right to participate ‒ to a legal person acting as an operator in exchange for a prize that the player will receive if they are correct with regard to the final results of the game, which cannot be predicted with certainty.

The following three elements must be present for a game to be considered one of chance:

• the game – this involves placing a bet or paying to participate;
• the prize ‒ if the result is favourable for the player, they will receive a prize; and
• chance – that game does not depend on the skill of the person and the result of it is not predictable.

Resolution 2695 of 2015 (issued by Coljuegos) and the Gambling Act establish that games (or elements of games) operated with equipment in commercial establishments that players attend as a necessary condition to bet are classified as “localised” and are therefore land-based. Games such as bingo, video games, spherodromes, slot machines and those offered in casinos fall into this category.

Online gambling is part of the category of novelty games that are described in Article 38 of the Gambling Act, as modified by Article 93 in Law 1753 of 2015. 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 above only applies to games managed and/or run by Coljuegos.

The games are operated and played via the internet – that is, bets are placed and prizes are paid solely through channels such as websites, apps or downloadable platforms, whereby the player can access the games offered by the operator. After the player has registered via the authorised channels, they play games in which the mechanics are enabled by a virtual random number generator or by the occurrence of real events, the results of which are not controlled by the operator.

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.
• Offering games of chance in which the prizes consist of – or indirectly involve – goods or services that violate the fundamental rights of people or that negatively affect players’ health.
• Offering games of chance in which the prizes consist of – or involve ‒ goods or services that the authorities must provide in the exercise of their legal role.
• 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:
1. have not been authorised by the relevant authority; or
2. 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.

Coljuegos provides the necessary support to the investigating authorities in the collection of probative material and its assurance for the effective development of the investigation. It will act in co-ordination with the authorities in cases where this is considered appropriate.

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 11.3 Financial Penalties);
• the termination of the contract (ie, the most severe sanction), without prejudice to any applicable fines or penalties; or
• disqualification from operating games (which can be remedied).

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.

For the entire gaming sector at the national level, new amendments are expected, as are new rules related to AML regulation, governing advertising and restrictions and modifications regarding instant prize games.

For AML, the current dispositions are expected to change in order to update the AML preventions according to GAFI recommendations and to be in line with the requirements for the financial entities in Colombia.

For advertising, the regulator is expected to control the amount of expenses invested by operators regarding advertising and sponsorships.

Lastly, in relation to instant prize games, Coljuegos is aiming to forbid the offering of Keno under online licence.

Considering the division established by the law, there are two levels of administration and control in the gambling sector. Therefore, there are two gambling regulators: Coljuegos and the CNJSA. At the regional level, administration is the responsibility of the regional government; however, control belongs to the CNJSA and the Health Ministry.

Coljuegos regulates and controls the following games offered at national level (Decree 4142 of 2011).

• Land-based casinos and bingo.
• METs.
• National raffles and promotional games.
• Novelty games such as:
1. online gaming;
2. online lotto (Baloto);
3. Super Astro (a fixed-odds betting game); and
4. pari-mutuel sports betting and betting on sports events.

The CNJSA is in charge of games offered at regional level (Decree 4144 of 2011), such as:

• regional lotteries;
• permanent betting (known as “chance”);
• instant lotto;
• horse-race betting; and
• regional raffles.

Coljuego’s primary functions are the operation, exploitation and administration of games forming part of the rental monopoly on games of chance that are not attributed to another entity by a legal provision. Coljuegos has wide powers to issue regulations for new games in this category. The power to approve such regulations falls upon the board of directors of Coljuegos and the president of the other entity.

The CNJSA has a duty to approve and issue the regulations (and their modifications) for games of chance that are exploited by territorial entities.

Coljuegos, as the national gambling authority, has to research and regulate the gaming portfolio in accordance with the new technologies available. This proactiveness requires the investment of important resources so that the regulator will be scientifically and technologically well informed. Sometimes those resources are not available.

Notwithstanding this, the authority is continuously making efforts to remain up to date with the industry and fosters an open, fair and predictable regulatory framework through the rationalisation of the regulatory process and by favouring contact between regulators and the industry.

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. Agreement 8/2020 was amended by Agreement 2/2022 to allow Venezuelan migrants to play games of chance in Colombia. 

There is only one type of licence in Colombia, as the authorisation is granted through a concession contract. However, some games are awarded to operators after a public tender process that grants sole permission to operate such a game.

For most games, there is no limit on the number of concession contracts or authorisations available. For Baloto, Super Astro and pari-mutuel betting, there is only one licence available for each type of game and the operator is chosen for five years by a public tender. For online gaming and land-based operations, there is no limitation on licences.

The Gambling Act states that the minimum duration of concession contracts operated by third parties is three years, with a maximum of five years. 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 1993.

In the case of horse-race betting, following the specific rules, the concession will be for ten years.

All legal persons willing to request a concession contract must provide an affidavit to the effect that the individuals and legal persons interested in executing a contract for the exploitation of games of chance are not affected by any of the disqualifications and incompatibilities established by Colombian contract and public law.

Land-Based

The application must be approved by Coljuegos and:

• demonstrate the legal possession of the equipment and elements used for the operation of the games;
• have obtained prior approval, in which it is stated that the location of the commercial premises is an area suitable for the development of commercial activities per land use plans;
• comply with the minimum and/or maximum number of gaming elements that can be operated by commercial premises;
• ensure that the commercial activities or services located in the premises are compatible with the operation of games; and
• comply with the commercial and other technical conditions that are considered necessary for the effective operation of each type of localised game.

Once the administrative act of granting the authorisation is signed, the concession contract will be executed, which will be governed by the provisions of the Gambling Act, Law 80/1993, and Law 1150/2007 and its decrees.

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 concessions will be granted by Coljuegos to operators for periods lasting between three and five years, with only one licence per entity.

A local presence through a local company incorporated in Colombia is required. (The operator can only be a Colombian commercial company or a foreign company branch incorporated in Colombia.)

Players’ funds must be managed from a bank account with a Colombian financial entity that is authorised by the Ministry of Finance.

Applicants will have to prove compliance with certain financial indicators that are defined by Resolution 20161200025334 setting forth the conditions and guarantees for applicants. New incorporated companies require at least USD450,000 of equity.

The regulation includes all kinds of gambling. The exclusions are pari-mutuel betting, horse-race betting, lotto and numeric games.

Domain names to operate in Colombia will need to be “.co” (“.com” sites are not allowed).

Regarding the location of the technical components, only the data warehouse – ie, the vault and the capturer – must be located in Colombia and there are no further requirements on location for other components. Therefore, the main servers can be located anywhere in the world.

The operator must certify all the technical gaming system components before a laboratory in Colombia that is approved by Coljuegos. Games must be certified as having a minimum return-to-player (RTP) figure set at 83% for slots, and real events must comply with the theoretical RTP formula.

The operator must appoint a compliance officer and implement the AML manual to comply with the System for the Prevention and Control of Money Laundering and the Financing of Terrorism (Sistema Integral de Prevención y Control del Lavado de Activos y de la Financiación del Terrorismo, or SIPLAFT) regulation for preventing money laundering.

As of 16 December 2022, the operator must comply with the responsible gambling requirements and regulations, which include a Good Practices Manual.

The guarantees requested from operators are as follows. 

• Compliance insurance guarantee covers:
1. a performance bond to cover the obligations of the contract and sanctions; and
2. salaries and social benefits.
• Liability guarantee (civil tort liability guarantee).
• A fiduciary or bank guarantee to cover prize payments and reimbursement of players’ funds – the initial minimum amount for this guarantee is approximately USD200,000. 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. Once submitted, the response will have an additional one month for resolution.

There are no application fees; nonetheless, most companies must comply with certain financial requirements regarding equity and debt factors.

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 811 times the legal minimum monthly wage per year of operation (equivalent to approximately USD180,000); and
• variable – a monthly variable rate applicable to land-based and online games.

For their operation, premises will require prior approval from the mayor of the city or municipality in which they are to be situated, according to the conditions stated in the territorial planning decree with regard to land use, location and minimum distance from educational institutions. Changes in the location of the operating room must also have prior approval and meet the conditions established by the gaming regulations.

In the case of local games and lotteries, a favourable report from the local or provincial authority is required. Each municipality may have its own regulations concerning the necessary distance from schools, hospitals, public libraries, etc.

The following recent changes are impacting on the land-based gambling sector.

Tax Rate for Slot Implementation

The previous government’s National Plan of Development Law included a small but high-impact reform to the Gambling Act, stating that all interconnected METs that comply with certain technical requirements (concerning connectivity and reliability) will pay 12% of gross gaming revenue (GGR) calculated across all the gaming elements of the operator, instead of the old formula that required paying the highest value between 12% and the fixed rate of GGR.

Decree 2106 of 2019, which simplified the governmental procedures, included Article 56. The latter stated that operators shall declare and pay gaming duties as stated in Article 59 of the National Plan of Development Law (ie, 12%); however, if one of the elements does not comply with the technical requirements, the operator must declare and pay the fixed fee stated in Article 34 of the Gambling Act.

Resolution 20211200034224 of 2021 established the reliability requirements for METs and stated the stages of implementation, which will be verified two years after issuance. Operators that meet the conditions – according to the timescales, stages and deadlines defined in the document – will pay 12% of GGR, or else will pay the fixed rate.

Resolution 20202100002044 of 2020 established the procedures for liquidating and paying the 12% rate in accordance with the reliable connectivity requirements. Any MET that does not allow this connectivity will be considered illegal, and will face contractual and criminal consequences.

Technical Requirements for METs

Changes to the technical conditions required for gaming machines, and the homologation processes involved, have been discussed by the government and the regulator ‒ as has the option to import refurbished and used METs.

During the first half of 2021, the regulator issued the list of brands and manufacturers homologated to operate in Colombia. Coljuegos issued Resolution 20211200034224 in 2021, which established the reliability and technical requirements for METs and set forth the gradual implementation stages for the next ten years (see 1.2 Recent Changes).

On 9 June 2022, Resolution 20221200013634 was issued, documenting the technical requirements for the SCLM in an attempt to update previous documents issued before the regulation that were eight years’ old.

The licensing regime for online gaming (Agreement 8/2020 and its regulatory documents) sets out the conditions required for offering internet-operated games under the category of novelty games.

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).

The regulation states that any company willing to commercialise and offer a gaming portfolio must sign the relevant concession contract once the legal, financial and technical requirements have been fulfilled before Coljuegos.

The Colombian regulations do not state any requirements for B2B business; however, online operators must report all signed agreements with suppliers in order to operate under their licence. The confidentiality agreements between operators and providers are not enforceable to the regulator. The expected changes are that B2B providers will have to register and obtain a licence in order to operate in the Colombian market.

Affiliates are not regulated, nor mentioned in the gaming regulation. Notwithstanding this, an operator holding a concession contract must guarantee that the terms and conditions – and compliance with the law – are respected with the registered players. B2C providers are liable for any compliance issues with their players.

White-label provision is not regulated, and the regulator has not provided an official position regarding white labels yet. Gaming services should only be performed by a concession holder. Nonetheless, if the white-label firm only performs marketing activity and both registration and operations fall on the side of the operator that holds the concession, this should be permitted.

Banking Requirements

Operators struggle to get a bank account, as banks require operators to have a licence first and the regulator requires a bank account to grant a licence – thus creating a “Catch 22” situation.

Local associations strongly oppose the amendment of the bank account requirements to allow the operator to present its certification after the licence has been granted.

Coljuegos is actively studying banking alternatives in the Colombian financial system.

Colombia has a blacklisting regime whereby the police identify illegal websites offering online betting and report them to the Ministry of Technology and Communications, which orders the relevant ISP blocking. Once the regulation was published, Coljuegos announced that it was introducing ISP blocking to all operators that had not requested an authorisation to operate in Colombia.

Financial Requirements

With the new Resolution 20231200017474, Coljuegos is requesting a technical study that provides support for the numbers presented at the business plan. For a concession contract for a new operator in Colombia, such a study must be attached, supporting the sales projections included in the business plan. If the operator had signed a previous concession contract, this above-mentioned technical marketing study should be based on the last year of operation results.

Both the regulator and the industry face the challenge of preventing compulsive gambling. These concerns have brought the whole industry together. There has been a united effort with the regulator towards promoting the responsible gaming programme known as “Juega Bien”, whereby the player may find information regarding compulsive gambling on every gambling website.

On 16 December 2021, Coljuegos issued Resolution 20214000036784 regarding responsible gambling with the purpose of tackling pathological gambling (see 1.2 Recent Changes). The Resolution included a broad set of regulations that operators must implement before 16 December 2022, which concern topics such as:

• control of pathological gambling;
• self-exclusion;
• advertising; and
• personnel training.

Among other things, the new regulations provide that:

• the operator must prepare a best-practices responsible gambling manual;
• a programme to train the operator’s staff shall be developed; 
• the operator must establish mechanisms to detect risky behaviour;
• the operator must establish a self-diagnosis test regarding pathological gambling;
• a self-exclusion form must be established;
• a self-excluded registry must be created; and
• mechanisms and functions must be implemented that can be used by the player to limit time, expenditure, deposits and losses.

On 16 December 2021, Coljuegos issued Resolution 20214000036784 regarding responsible gambling with the purpose of tackling pathological gambling. The Resolution included a broad set of regulations that operators must implement before 15 March 2023. The enforcement of this regulation has been postponed once more.

Advertising must contain warnings about the risk of gaming addiction, and must include a message about responsible gaming and the restriction of gaming activity to persons of legal age in Colombia. According to the relevant guidelines, the compulsory messages are as follows.

• “Uncontrolled gambling causes addiction. Gambling is entertainment, play in moderation. Sale to minors is prohibited.”
• “Play well. Being responsible is part of gambling.”

Operators should adopt measures that allow players to define limits on gambling (time, expenditure, deposits and/or losses) and players may modify these limits whenever they wish to do so.

Self-exclusion may be revoked by the player at any time. Revocation of self-exclusion shall take effect 72 hours after signing up.

Colombia is part of the Financial Action Group of Latin America (Grupo de Acción Financiera de Latinoamérica, or GAFILAT). In this respect, Colombia follows the guidelines issued by the Financial Action Task Force for the prevention of money laundering and terrorism financing and, therefore, the obligations of operators do not differ from those in other countries.

The AML legal framework is based on the following regulations:

• Law 190 of 1995;
• Law 526 of 1999, which set up the Financial Information and Analysis Unit (Unidad de Información y Análisis Financiero, or UIAF);
• Single Regulatory Decree 1068 of 2015;
• Law 599 of 2000 – the Criminal Code;
• Law 1121 of 2006 – rules for the prevention, detection, investigation and penalisation of terrorist financing;
• Resolution 20195100044514 of 2019 – AML requirements for operators;
• Coljuegos Resolution 20215000012784 of May 2021; and
• Decree 830 of 2021 – expands the list of PEPs and complements the KYC due diligence process.

Changes are expected to the regulation, with it being updated to GAFI recommendations, similar to the AML programmes required for financial entities in Colombia.

Colombian AML regulation states that all operators must fulfil the legal requirements to apply for a concession contract. The following are the main obligations.

Operators must locally appoint a compliance officer with decision-making powers and to at least the second hierarchy level.

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.

Internal control measures – compliance officers must provide certification of experience and training, and approve the UIAF’s AML courses.

Operators must preserve all documents obtained or generated during the implementation of the internal control measures for a minimum of five years.

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.

Operators must state the forms and annex for reporting to Coljuegos and UIAF any suspicious operations (eg, KYC, due diligence and shareholders’ identification) and reporting players who acquire credits for participation and/or withdraw them.

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.

Although there is no supervisory agency for advertising in Colombia, the Consumer Protection Statute (Law 1480 of 2011) governs all types of advertisement activity in the country. The marketing and advertising associations have created a code of self-regulation. The Ministry of Industry and Commerce is the authority that:

• advises the government and participates in the formulation of policies on all matters concerning consumer protection;
• supervises consumers’ rights;
• ensures compliance with the provisions on consumer protection; and
• handles claims and complaints.

For the purpose of guaranteeing consumers’ and players’ rights, there is a clear responsibility for media and digital outlets to comply with the following principles outlined in the local regulation:

• the protection of players, reduction of minors’ exposure to gambling products, and adherence to the limits set forth in local advertisement regulations with regard to minors;
• public order; and
• the prevention of addictive behaviour, fraud and money laundering.

Coljuegos follows compliance with the responsible gaming principles stipulated in the law very closely. Also, Resolution 20214000036784 of 2021 establishes new rules for advertising, especially with regard to compulsory messages and responsible gambling propaganda.

Law 1480 of 2011 defines “advertising” in Article 5 as follows: “Any form and content of communication whose purpose is to influence consumption decisions [...]”.

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.

In 2019, Coljuegos issued a brand and logo manual stating rules and conditions for marketing and advertising. There is also a brand manual for the responsible gambling campaign “Juega Bien”.

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.

Also, the Gambling Act establishes a general provision containing criteria that operators must comply with at the time of conducting the marketing activities. For instance, advertisements must warn about the risk of gaming addiction, and must include a message about responsible gaming and state that gaming activity is restricted to persons of legal age in Colombia (see 7.3 Gambling Management Tools).

Other general marketing and advertising regulations in Colombia, in addition to the prohibition involving minors and false expectations, state that marketing activities cannot offend any religion and cannot go against good customs/manners.

Considering the project resolution (which is still in a draft stage), the following are the main expected modifications.

• 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. For 2023, 1 LMS = COP1,160.
• Surpassing these limits will expose the operator to fines of up to 100% of the amount in excess.
• New operators will be allowed to invest up to 80,000 LMS (COP92.9 billion). 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.

Law 1480/2011 states that the Ministry of Industry and Commerce may impose sanctions for different types of violations of the Consumer Protection Statute, including:

• fines of up to 2,000 times the legal monthly minimum wage;
• temporary closure of the commercial establishment for up to 180 days;
• in the case of recidivism, definitive closure of the establishment of commerce or the order of definitive withdrawal of a website or the electronic commerce medium;
• successive fines of up to 1,000 times the legal monthly minimum wage for non-observance of orders or instructions given by the authority; and
• that when it is verified that the administrators, directors, legal representatives, statutory auditors, partners, shareholders or other natural persons have authorised or executed behaviours contrary to the Consumer Protection Statute, the Ministry of Industry and Commerce may impose fines of up to 300 times the legal minimum monthly wage and a prohibition on performing commercial activities for up to five years.

Taking into account the new project resolution for the restriction of advertising, Coljuegos is proposing a new regime where, if an operator exceeds the fixed range determined in the project resolution, it will be subject to a fine equivalent to 100% of the amount exceeded in the investment, which will be counted from the ceiling set for the same, after validation by Coljuegos. Notwithstanding this, the above considerations are still under review. The regulations for sanctioning a company are very clear, and this process of sanctions may be considered outside the power of the regulator.

There are no specific conditions for the acquisition of a gaming company that has signed a concession contract. However, as these types of contracts are ruled under public law, intuitu personae, the specific qualities of the private party that was accredited in the selection stage must be considered. If the acquisition of the company results in a change of legal entity that will cause a transfer of the contract to a third party, this must be previously approved by Coljuegos.

Furthermore, with regard to the relevant due diligence obligations, information pertaining to natural persons who are shareholders of 5% or more should be disclosed.

All changes of control – regarding modification to the corporate equity, capital increases, and shareholder changes beyond 20% – must be reported to the regulator every six months. Although it is not a requirement to request prior authorisation for this change of control, it is prudent to report the information in order to guarantee that there will not be any compliance complications.

There are no distinctions made for passive investors.

As explained previously, the relevant authority grants the permits necessary to operate in the betting industry through a concession contract, which means that public contract law is applicable in all matters regarding the enforcement of obligations. As such, regulatory bodies may use financial guarantees as standby letters of credit and insurance bonds as compliance guarantees to execute compliance situations, following an administrative procedure that did not satisfy the regulatory expectations regarding compliance. 

One of the particularities of the Colombian authority (Coljuegos) is that it controls its jurisdiction, meaning that the regulator is judge and party at the same time. 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.

Coljuegos can impose the following financial penalties.

Contractual Fines (Concession Contract)

Coljuegos may impose daily and successive fines of up to 1% of the annual value for fixed exploitation rights, in order to obtain compliance, without exceeding 10% of the contract value in total.

Penalty Clause (Concession Contract)

In the event of total or partial breach of the obligations contained in the concession contract, or upon unilateral termination of the contract by Coljuegos, the operator must as a penalty pay Coljuegos an amount of up to 10% of the value of the contract, which is understood as the value of the fixed exploitation rights throughout the term of the concession contract.

Sanctions Regarding Exploitation Rights

When an operator does not declare the exploitation rights in the respective period, a sanction equivalent to 200% of the exploitation rights caused by the undeclared period will be imposed.

When operators omit or include information in their private liquidation of the exploitation rights that leads to payment of a lower value, a penalty for inaccuracy equivalent to 160% will be imposed. 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 1474 of 2011. Sanctions regarding exploitation rights are enforced by means of the punitive administrative procedure contained in the Administrative Code (Law 1437 of 2011).

The penalties are enforced through the insurance guarantee, as a claim for breach of contract.

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 COP100 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 sanction for illegal operations of games of chance will be applied to the owner of the establishment and to the administrator and/or employee involved in the operation.

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 administrative fee is a charge for administrative expenses calculated by specific rules for each game, which is usually more than 1% of the actual fixed and variable exploitation rights paid yearly and monthly to Coljuegos or the regional authority.

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.

Royalties (Exploitation Rights)

As previously stated in 4.10 Ongoing Annual Fees, to understand the taxation system, one must consider the legal minimum monthly wage – a national index that is changed on January 1st by a governmental decree. The 2022 legal minimum wages are:

• legal minimum monthly wage (LMMW) – COP1 million; and
• legal minimum daily wage (LMDW) – COP33,333.

At the national level

The following applies at the national level.

• Casino/table games – a fixed monthly fee of four times the LMMW (roulettes, poker, blackjack, etc).
• Slots/METs – 12% of GGR, or 30%, 40% or 45% of the LMMW.
• METs single sites – 12% of GGR, or 30%, 40% or 45% of the LMMW (the rates are progressive for slot-machine games and depend on the value of the bet each machine receives).
• Bingo:
1. between one and three LMDW(s);
2. for municipalities under 100,000 inhabitants and cards of up to COP250 – one LMDW;
3. for municipalities under 100,000 inhabitants and cards of more than COP250 – one-and-a-half LMDWs;
4. for municipalities with more than 100,000 inhabitants and cards of up to COP250 – one LMDW;
5. for bingo cards of COP250 to COP500 – one-and-a-half LMDWs;
6. for bingo cards of more than COP500 – three LMDWs; and
7. for interconnected chairs, no bingo card will pay a lower rate than that established for 200 seats.
• Online (fixed) – an annual fixed rate applies to land-based and online games, calculated as 811 x LMMW per year of operation (equivalent to approximately USD200,000) plus 1% over the fixed exploitation rights as administrative expenses.
• Online (variable):
1. 15% on GGR;
2. 1% over the variable exploitation rights as administrative expenses;
3. RTP must be equal to, or over, 83% (otherwise 17% of turnover); and
4. slots and real events betting must comply with the theoretical RTP formula.

At the regional level

The following applies at the regional level:

• lottery – 12% of monthly turnover;
• permanent betting – 12% of monthly turnover; and
• betting – 17% of monthly turnover.

VAT

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:

• general rate – 19%; and
• UVT – COP42,412.

UVT is an index tributary value updated every year by the government in accordance with inflation (see 3.7 Recent or Forthcoming Legislative Changes).

Please note that the tax base for VAT, in relation to these games, is not the turnover, the GGR, nor any other figure related to sales or incomes, but is a fixed amount calculated as “x” times (depending on the game) the Colombian UVT multiplied by the VAT general rate for these games. Therefore, there is no real consideration of sales per game, terminal, table, etc, as the presumptive sales of the relevant UVT are the basis for the rate of 19% to be paid monthly via electronic declaration.

It is also important to note that VAT cannot be part of the value of the stake to be placed by the player. In other words, if a player places a stake of COP100, the value of their stake should be precisely that and not COP100 minus 19% VAT (COP81).

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 UVT20.

Hence, the taxable monthly base will have the VAT general rate of 19%, which is the tax cost per terminal and per month.

VAT for casino games (table games)

For casino games, the taxable monthly base per table is UVT290.

Hence, the taxable monthly base will have the VAT general rate of 19%, which is the tax cost per table and per month.

VAT for bingo

For bingo, the taxable monthly base per seat is UVT3.

Hence, the taxable monthly base will be charged with the VAT general rate of 19%, which is the tax cost per seat and per month.

Tax on Winnings

The Tax Code sets forth a 20% tax on winnings. 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 USD400.

There have been two unsuccessful draft bills regarding responsible gambling. However, it is possible that in the near future responsible gambling will be regulated by a law and not only by Coljuegos’ resolutions.