A risky bet?

An exponential rise in revenues in Colombia’s gambling sector heralds the growth of a promising sector.

Colombia’s gambling industry is witnessing a dynamism that few would have imagined possible. In a recent report, Coljuegos – the industry regulator – stated that the sector had generated total sales of 23.4bn pesos between January and July 2021, which represents a remarkable 120% increase since 2020. Coljuegos however is still cutting its teeth meaning that regulatory frameworks are often muddled and overly complex. Its staff, well-meaning and hardworking, are inexperienced. This in turn may disincentivise further investment in a sector well known for its exposure to money laundering.    

An executive at one of Colombia’s leading online gambling operators highlighted the increasing importance of the sector, “The economic contribution of the gaming industry in Colombia is significant and we see that over the last few years, both traditional games (casinos, lotteries, etc.) and internet-operated games (sports betting, etc.) are increasingly popular among Colombians.”  

“The economic contribution of the gaming industry in Colombia is significant… both traditional games and internet-operated games  are increasingly popular among Colombians”.  

Executive at one of Colombia’s leading online gambling operators

Given that Coljuegos is not yet able to provide robust regulatory oversight, it largely relies on applying best practice from other countries. Thus, the requirements of the regulator too often do not respond to the specific needs of Colombian gambling operators nor fully consider the sometimes-complex structure of each separate business. Things are improving, but slowly. Gambling operators often ask for extensions to regulatory deadlines as they try to get their heads around exactly what kind of information they need to provide and why. Digitisation has helped streamline things a little, but even that can be muddled and a source of confusion.  

A former CEO of one the largest gaming operators in Colombia said, “Coljuegos is newly established and thus unaware of the complexity of issues affecting the sector which range from money laundering to fraud and is prone to making reactionary decisions. For example – the regulatory body has recently declared the ‘Baloto’ (a payment voucher) tender void twice, it is the first time this has happened and many in the industry are questioning whether this was the right decision – it helps facilitate payments and would be a boon to the sector.” 

Coljuegos has a reputation for insisting on time-consuming regulatory procedures that operators must comply with – businesses have complained that these have become increasingly complex and onerous. This is in part due to concerns over money laundering which remains a significant challenge. The executive remarked, “In Colombia the BBVA bank is the only one that is working with online gaming operators – the rest of the banking sector consider it too great a risk and would rather wait for the regulator to mature a little.”   

The sector is growing which means the regulator will need to adapt fast. In the last part of 2021, three large online gaming operators entered the market, and four bookmakers were bought or acquired by foreign companies. It is expected that at least five more foreign investors will enter the market this year. Unsurprisingly therefore, opportunities for investment in the sector are increasingly enticing foreign capital. 

“There are currently eighteen online gaming operators, of which four or five are driven by Colombian capital and the rest have received foreign capital in some way or another…”

Former CEO of one the largest gaming operators in Colombia

“There are currently eighteen online gaming operators, of which four or five are driven by Colombian capital and the rest have received foreign capital in some way or another (investment in exchange for participation, purchase of the operation, opening of a branch etc). What we have seen recently is that a significant volume of Spanish, Italian and Middle Eastern investment is currently arriving in the country,” remarked the executive. 

Despite the buzz, smaller, less well capitalised industry players could be more hesitant to take the risk however – the regulator is quick to remind them that significant penalties await those who fall foul of the rules.  


Important Notice
While the information in this article has been prepared in good faith, no representation, warranty, assurance or undertaking (express or implied) is or will be made, and no responsibility or liability is or will be accepted by Deheza Limited or by its officers, employees or agents in relation to the adequacy, accuracy, completeness or reasonableness of this article, or of any other information (whether written or oral), notice or document supplied or otherwise made available in connection with this article. All and any such responsibility and liability is expressly disclaimed.
This article has been delivered to interested parties for information only. Deheza Limited gives no undertaking to provide the recipient with access to any additional information or to update this article or any additional information, or to correct any inaccuracies in it which may become apparent.

Most recent in Lifestyle

Child (don’t) Care

Tackling unpaid child support in Latin America. 

Slippery Soap

Empowering women in Mexico’s workforce.

Working nine ’til five?

The transition from a 48 to 40-hour work week in Mexico. 

Empowering Latin America’s Future

IADB bonds and World Bank partnership for education and employment.

Wellness wonderland

Latin America’s path to blissful travels.

Early checkout

Chiles minimum wage increase and its impact on the tourism industry.

Nearshoring fashion

The fashion industry is set to benefit from nearshoring in terms of logistics and sustainability.

Reading ahead

COVID-19 hit literacy rates in Latin America children but can EdTech help them catchup?

Fighting fit

Fitness apps enjoyed a pandemic-related boom but as life reverts to normal will it last?

Back from the dead

Latin America prepares to celebrate their dead as Día de los Muertos returns.