This week, Dane revealed that entertainment and agriculture were the drivers of the 2% GDP growth during the third quarter of the year. This first activity grew 14.1%, with an increase in the online gambling subsector, which has been growing since the pandemic.
Despite this situation, the Government proposed an additional tax on the sector,Therefore, Fecoljuegos believes that the Financing Law could cause sports betting platforms to leave the country due to the tax burden.
Sports betting is driving GDP, according to Coljuegos. The income of the sector has been increasing for five years and figures from the entity indicate that the growth has not stopped, Well, during 2019, revenue reached $5.4 billion, and during the pandemic, billing grew 48.1%, up to $8 billion.
During 2021 and 2022, the sector’s bets reached $16 billion and $26 billion, respectively, with growth of 50% and 62.5%. Last year, $34.5 billion in bets were reported. Betplay, Wplay.co, Codere, Yajuego and Rushbet.co are some of the most important companies in the sector by market share.
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Evert Montero, president of Fecoljuegos, assured that, regarding the increase in the tax on occasional profits, it could strengthen informality and illegality, since people would bet on unregulated platforms, where there is no withholding or health benefits. “The platforms contribute a large amount of resources to the health system,” added the union leader.
The market leaders
Colombia has 15 operators authorized to place bets online. The market is led by BetPlay, whose market share reaches 51.43%. Wplay.co is in second place with a 14.5% share;Codere and Yajuego continue, with 11.7% and 5.27%, respectively. The top five operators are closed by Rushbet.co, with 4.7%.
Montero assured that the online betting sector is at risk due to “the Government’s lack of knowledge” about the business model. The main operators could leave Colombia to establish their businesses in jurisdictions that do not have so many tax burdens. “The Financing Law will cause platforms to make the decision to operate in other countries.”
The manager explained that this is due to several reasons. The first is that the $34 billion in bets earned by the industry last year is not the real numbers for the industry. “The figure is not real because they are joint accounts, this is not what enters the betting house and the operator.We must refund around 93% of the value for the payment of prizes. We have very small margins left, 7%. The real income for betting houses in 2023 was $2.1 billion,” he assured. This figure is far from the Government’s intended figure, whose projection is that the gambling sector will contribute $2.7 billion in taxes by 2030.
“We have a return on investment that, by law, is 83%. We have it higher, at 93%, to compete with illegality. The Financing Law proposes 19% to the sector, a figure that we cannot assume,” he concluded.
Following the provided article, here are some potential interview questions for two experts on the topic of online gambling and its impact on Colombia’s GDP:
1. Introduction:
Guest 1: Could you please introduce yourself and your organization? Tell us about your role and responsibilities in the Colombian gambling industry?
Guest 2: My name is [Guest 2] and I am the president of [Organization 2]. Our organization represents the top 5 online sports betting platforms in Colombia. We play a significant role in contributing to the country’s GDP through our operations.
Section 1: GDP growth and online gambling’s contribution
Guest 1: What factors do you believe have driven the 2% GDP growth in Colombia during the third quarter of the year? How has the online gambling industry contributed to this growth?
Guest 2: The online gambling industry has certainly been a major contributor to Colombia’s recent GDP growth, particularly with the surge in popularity of sports betting. Could you elaborate on how the pandemic has impacted this trend and what other sectors have seen growth as well?
Section 2: Proposed tax on the gambling industry
Guest 1: What are your thoughts on the Colombian government’s proposal to tax the gambling sector more heavily? Do you think this will have a negative impact on the industry and its contribution to the country’s economy?
Guest 2: As president of one of the leading sports betting platforms in Colombia, how do you feel about the proposed tax increase? Many fear that this could lead to a tax burden that is too high, causing operators to leave the country. Do you think this is a valid concern?
Section 3: Impact on sports betting industry
Guest 1: Can you provide more insight into Fecoljuegos’ stance on the ongoing debate regarding taxation and regulation of the sports betting industry? How will additional taxes affect companies within the sector and their ability to operate sustainably?
Guest 2: Your organization has expressed concern about the potential exodus of major platforms from Colombia due to the proposed tax increase. Could you discuss some of the specific challenges you foresee for sports bet
