Despite the growth that the online betting industry in Colombia has experienced, it has been facing several challenges in recent years, which have been slowing its impetuous gallop.
What are the causes that are causing these delays? There are several factors that have been hindering the emergence of new betting houses in Colombia: legal requirements, investments in infrastructure and a distortion in market competitiveness. Let us now analyze some reasons that have discouraged new competitors.
Legal issues, when they become flawed or fall into abominable bureaucracy, cause delays in any development and betting houses in Colombia are no exception. To operate legally in the country, platforms must obtain authorization from Coljuegos, which involves meeting several licensing requirements and several of these are often long and cumbersome processes.
Furthermore, and once these requirements have been met by the operator, they must wait for authorization from Coljuegos, which can take a long time and cause delays in the start-up and, consequently, in the expansion of the betting houses.
Another important factor that hinders the growth of betting houses in Colombia is the investment requirements. Operators must establish a physical presence in Colombia, including setting up offices and acquiring the necessary infrastructure, such as retail betting shops, data centers and customer service centers.
This financial requirement is a barrier for new competitors who want to enter this market, especially smaller operators, which often have difficulties meeting these financial obligations.
The Colombian online betting market is dominated by two operators: BetPlay and Wplay, which together represent approximately 70% of the market. This strong market position has made it difficult for new entrants to compete effectively. Furthermore, this duopoly has stifled, in different ways, innovation and diversification of the online gaming industry in Colombia. Without a doubt, this distortion of competition hinders the growth of the sector as a whole.
While the majority of betting houses in Colombia operate legally under the authorization of Coljuegos, some unauthorized service providers, such as 1xBet, have managed to offer their services to Colombian customers extraterritorially.
These unauthorized platforms obviously evade the regulatory requirements imposed by Coljuegos, thus not only creating an unequal playing field for authorized betting houses, but also posing potential risks for consumers who may not receive adequate protection or fair treatment.
A good way to streamline licensing procedures is by reducing and simplifying the different requirements demanded of new competitors.
As a way to encourage the proliferation of new competitors and create a more competitive environment, it is to provide different aid to new actors. Providing tax incentives or subsidies can be very positive.
The authorities must take measures to increase the competitiveness of a market dominated by Betplay and Wplay. A good way is to help and support small competitors.
