Colombia’s online market is still riding a wave of international interest since launching last summer, says Evert Montero Cardenas, president of trade group Fecoljuegos. But regulations will need constant updating to keep up this momentum.
iGAMING TIMES: What were the most salient findings in Fecoljuegos’ latest market report?
EVERT MONTERO: Online bets are experiencing a very positive growth trend. In 2017 alone, since the first license was approved mid-year, revenues amounted to COL$112bn (US$40m) and to date they already have 442,998 registered users, of which 415,512 (93.8 percent) are active. Moreover, it is expected that by the end of 2018 there will be 20 companies authorised to operate online gaming platforms. Bear in mind, today there are nine licensed operators.
iGT: What factors in particular have made this growth possible?
EM: We think Colombia’s success online is down to the game regulation which, besides being the first in Latin America, has been novel, insofar as it offers favorable conditions to the operators – particularly in the case of VAT exemption.
These guarantees and benefits have allowed European and American investors to focus on the country, and the Latin American region, to expand and participate in the market. Additionally, online gaming operations are giving way to successful alliances between online and local operators, in order to complement, support and seek greater growth for their businesses.
Having said that, although the regulations have been very positive, we must not forget that it is important to continuously review potential amendments that could make the activity more profitable for the state and for the employer.
iGT: Moving on to improvements then, how much appetite is there for new products in Colombia. If so, what would they be?
EM: The regulation of new products is undoubtedly one of the main objectives of the State, since these regulations open the market to potential new investors, and contributes to the growth of state resources that fund the Colombian health system.
In terms of online gaming, since the market has been so successful, operators see, as a priority, the regulation of new types of games, that would allow them to offer new alternatives to players.
Online operators have many expectations about regulations for betting on racing and virtual sports. These games have been regulated for land-based, but they’ve not yet been very successful, perhaps because of the financial model. Which is why it has been considered that one way to give life to this game is to include it within the range of products that can be played online. To this list, live casinos are added, which we expect will boost the market and increase sales, that will again mean more resources for the health system, and attract more players.
iGT: What other initiatives does Fecoljuegos currently promote that could help to further boost the market?
EM: We are in continuous communication with the regulator to review some issues that are worrying operators in the sector, and that may put long-term growth at risk.
One initiative that we are promoting is the modernization of Law 643 of 2001 that has been in force for 17 years. In needs changing so that it complies with the legal and financial reality of the industry. It is important to highlight that we also need a specific public policy for games of chance involving all entities of state surveillance and control, so that it benefits the sector and guarantees operators more equitable and profitable businesses.
Another goal of Fecoljuegos for 2018 is to work on the reputation strategy. We want to contribute to the improvement of gaming’s image, and diminish any ignorance about the industry on behalf of other business sectors. We especially want organisations, such as financial and insurance companies to know that we are a regulated activity and that we contribute to the economy, especially towards the health of Colombians. It’s important that these actors open their doors to operators, so they can freely access the wide variety of products and services that they handle.
iGT: What is the logic behind the regulator’s decision on the international liquidity of poker, and what is your view in the topic?
EM: In November 2017 the regulator – Coljuegos – presented several modifications to online gambling regulation, which included the shared liquidity or international liquidity of online poker. However, this initiative was suspended after both operators and unions expressed objections to Colombian users being able to bet with players from abroad on international platforms.
At Fecoljuegos we were concerned that these rules would be to the detriment of the Colombian operators, to the extent that the regulation would greatly benefit multinationals who can more easily comply with the obligations, as they may already have licences to operate in Colombia and in many other countries.
The handling of money is another risk that must be reviewed because it can lead to undesirable practices. But you also have to consider the identification of the player living abroad, given that Colombia has a very strict regulations for the registration and management of the players’ information.
We do not know if the regulator is going to present a new proposal or if he is going to reactivate the one he had been working with, taking into account the observations that were made.