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Revenue down as new tax goes into effect in Colombia
Recent implementation of a VAT on online gambling in Colombia has had a significant negative impact on revenue in the sector. It is reported that gross gambling revenue has decreased by 30 per cent, leading to reduced betting deposits and altered user behaviour. Platforms are reacting by offering promotional bonuses as a temporary solution, but this strategy poses sustainability concerns for the future.
Evert Montero, president of the Colombian Federation of Entrepreneurs in Chance and Gambling (Fecoljuegos), highlighted that the average bettor’s monthly deposits have sharply declined, with reductions up to 50 per cent following the tax’s introduction. This decline results from the indirect financial impact of the VAT, which has diminished betting capacity and could drive users towards illegal platforms.
In February, the Ministry of Finance announced the introduction of three new taxes, including a 19% tax on online gambling, aiming to cover state expenditures related to internal unrest in certain regions. Montero suggested the need for a collaborative effort with the National Government to develop a more sustainable tax policy.
Key Points
- The new VAT on online gambling in Colombia caused a 30% drop in gross gambling revenue.
- Operators are using promotional bonuses to retain customers, but this approach is not sustainable long-term.
- Average monthly deposits from bettors have fallen significantly, with some platforms witnessing up to a 50% reduction.
- The VAT reduces the effective amount players have for betting, pushing them towards illegal options.
- Three new taxes, including a 19% levy on online gambling, were introduced to support state expenditure amid regional instability.
Why should I read this?
This article is crucial for understanding the immediate effects of new tax policies on Colombia’s gambling industry. With significant revenue declines and potential shifts in user behaviour, the piece highlights important implications for both legal operators and the broader conversation about tax sustainability in the online gaming sector.
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