Colombia has imposed a temporary 19% VAT on online gambling deposits amid a state of emergency, causing concern among industry players like Fecoljuegos. The tax replaces the previous exemption, but critics argue that the lack of a transition period poses severe compliance challenges for operators. Rush Street Interactive is evaluating the decree’s possible impacts on its business in Colombia, emphasizing adaptability in the face of uncertainty.
Colombia’s temporary 19% VAT on online gambling player deposits has drawn criticism from the local gambling trade association, Fecoljuegos. This levy was introduced amidst a state of emergency due to rebel violence in the Catatumbo region, replacing the previous VAT exemption for operators. The government hopes the new tax will help mitigate the crisis, but Fecoljuegos argues that the decision ignored the sector’s operational realities and the technical challenges it presents.
Fecoljuegos highlighted the lack of a transition period, as operators only have five days to comply with the new regulation. This tight deadline could create “serious difficulties in complying with the new requirements.” They emphasized the need to balance tax collection with maintaining an industry crucial for employment and innovation, urging the government to provide a transition that safeguards sector stability.
Rush Street Interactive (RSI), which manages the RushBet brand in Colombia, is currently assessing how this decree will affect its operations, representing 13.3% of its total revenue. The company stated that while the impact of the decree remains uncertain, it is prepared for various scenarios, including potential changes to reduce operational and marketing costs to mitigate revenue impacts.
Despite short-term challenges posed by the VAT, RSI remains optimistic about its capabilities and resources, believing they can sustain long-term growth in Colombia and throughout Latin America. This sentiment reflects confidence in their management expertise and local operational strategies.
The introduction of a 19% VAT on online gambling deposits in Colombia, aimed at addressing ongoing crises, has faced significant backlash from industry stakeholders. Fecoljuegos and Rush Street Interactive caution that the rapid implementation without a transition period could threaten the stability and economic viability of the gambling sector. The push for a balanced approach highlights the complexities involved in regulating the industry while ensuring sustainable growth.
Original Source: www.intergameonline.com
