iGaming Daily

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Welcome to the iGaming Daily podcast, analyzing the news from the betting and gaming industry all over the globe, supported by OptiMove, the number one CRM marketing solution for the iGaming market. iGaming is becoming one of government's favorite levers, not only for regulation but for revenue. Europe, policymakers are floating the idea of a unified levy on online betting to help fund the EU futures budget. Meanwhile, in Colombia, a far more aggressive movie is already live, with a 16 % tax on player deposits hitting operators and users at the point of entry. Two very different approaches, but the same underlying question. How far can governments push taxation before it starts to break the regulated market? Welcome to iGaming Daily, brought to you by Optimove, the creator of positionalist marketing and number one player engagement solution for iGaming and sports betting operators. I'm Fernando Nott, Media Manager for SVC and your host for today, where I'm joined by your great editor-in-law at large, Ted Memir. Ted, how are you today? Muy bien, Fernando. Hola, Lucia, yes. Maravilloso. Hello, Lucia Gando as well, uh editor for SBC Noticias. Lu, how are you today? I am very good. Not speaking Spanish right now, but good in general. Someday, someday, someday we'll make a product for you, Spanish readers. I hope so. I'm sure we will, because there's a lot to talk about in Spanish, in Latin America, in Spain. There's a lot of discussions going on. um a lot of updates on the regulatory front. um of course, the things that happened in Latin America are nothing new. And that's what we see pretty much every week on the European regulation m updates coming from regulated, already regulated markets, that the policymakers, the regulators, the lawmakers probably more often not are looking to enforce further regulation, enforce further taxation. And there is a proposed levy um floating around the European Union, is um somewhat a change. um We are usually talking about uh local um proposals, but now we are seeing a proposed EU gambling levy. um So Ted, why don't you talk us through, tell us what it's about and what problems? Is it actually trying to solve according to the policymakers? So sure, let's begin. And first of all, I have to stress that this is a working proposal that has been submitted from the European Parliament, where, as you'd expect, proposals are debated and scrutinized. It has been submitted as an oral question to the European Commission, the EC, which is more in charge of the technicalities of the mechanisms of creating the laws. So at this stage, there is no legislation, whether it's draft or formal, to consider. What's happened is that a group of 40 MEPs have supported a working project or a working proposal by Romanian representative Victor Negrescu to consider applying a common tax on online gambling income of businesses. that are licensed under EU states. The matter seeks to raise approximately four billion a year or 28 billion in a European cycle. That would mean for we as a government to support wider kind of education programs and labor re-skilling projects, as well as supporting national addiction, uh national treatment and addiction campaigns for gambling. Again, this is going back to the beginning. This is just a working proposal. We have to wait. and see how long it will take for the EC to come back with the definition of, the remit of the actual proposal and its mechanisms. Yeah, of course we'll have to hashtag wait and see, but like every time one of these proposals comes up, probably regulated or legit gambling companies are already raising their eyebrows because they're like, Hey, we already have a regulation. We already have a the taxation scheme through which we are contributing back to the society, to the country, to the jurisdiction we are working uh on. So um it's definitely something to be very um wary of because like it is a 1 % levy, but um even if that sounds like a little fee layered on top, of national taxes, it could have a greater impact. how material could that be for operators? The Grescu's first proposal asked to review a 1 % levy to be applied to online gambling licenses. However, it provides no breakdown of how that can be applied via mechanism and how it would actually be calculated on gambling licenses. I think this is kind of the first scope of where the EC had to probe as in how member states gather uh income from gambling licenses and how you can apply a statewide or a European federal tax on gambling licenses. Again, this is going back to, I think that we don't even know as yet what considerations would factor in. the EC's approach to how design or how do you create kind of the boundaries of a project for applying a specific tax on gambling. And how seriously do you think that gaming executives should take this whole matter at this stage considering, like you said, it's just a preliminary thing, a proposal. Okay. So as a journalist, this is a great story. Yeah, absolutely. One that guarantees a lot of clicks and a lot of page views. But look, from my, leaving my professional interest aside, I don't want to spread the panic for gambling and especially at a federal European level. This could take months. It could take years for the EC to bring any kind of feedback on this. Remember that EU laws view gambling as as state autonomy or state rights. There is no common European law on gambling or how gambling should be treated. Even if the EC provides a positive feedback or greenlights the project for further stages, the mechanisms could well be rejected by member states. There are so many considerations uh that have to be undertaken, especially for gambling as it's fragmented not only in the EU, but across state levels. If you take a look at kind of Germany and Spain, and it's kind of autonomy between land-based and online. And also other factors, considering other softer factors such as the goodwill of the project, the fact that a lot of taxes are now generated go toward social projects, as you see in lotteries. So how would that be affected by... a unified tax coming in and being layered on top of online gambling taxes. So without knowing precisely what the danger is, would you say it's time for our viewers to crack each other's head open and feast on the goo inside? Now, I'm just kidding. That seems like a reference for anyone who didn't get that. But, gotcha, sorry. But Lou, would you say this is something that's part of a broader global trend? where regulators are looking of the most creative ways to get taxes or tax revenue from the industry? Yes, yes. We are seeing the same in a lot of markets of Latin America. I think it's a political discussion. um The world is trying to restructure the institutions that are crumbled down. Collecting taxes and especially from an industry that socially is not uh super accepted is a good way to set the precedence, right? And yes, collect what they want. But this of course is affecting the players mostly and benefiting the illegal platforms. Yeah, absolutely. The industry just wants to be loved. That's all that matters. going back to how real this can turn, do you think there's a credible pathway for the EU to introduce a centralized gambling levy without other regulations in place that unify the broader regulations like the other regulations for each country? Well, this is down to the EC and their determination and what is going to be debated at this stage. Is there a potential pathway viewed by the highest courts of Europe to apply a unified tax on online gambling? The assignment is significant. And I think that there's also kind of a conflict there in why the kind of E policy regarding business and regarding kind of taxation. On the one hand, you want You have governments or certain governments that want to keep certain sectors under autonomy, such as gambling. And then you have MEPs or members of the parliament who view that Europe should take a more kind of unified approach in its business proposals. um That's, look, as far as I'm concerned at this stage, we're really kind of just talking about kind of hypothesis uh of where Europe is going to go with gambling. For sure. We'll have to hashtag wait and see what the EC decides on this matter. If it does eventually leads to. um broader EU involvement in gambling policy beyond taxation, we will continue following this story very closely. So make sure you are subscribed to all SBC media newsletters such as SBC news, IK Media Expert, et cetera, et cetera. So just go to, let's say SBC news and find the newsletter tab, then click on that. You'll find all the SBC media websites there. Click on the boxes and you are already subscribed to all. our media outlets so you can keep up to date with everything going on not only in Europe but also around the world like in Colombia where there's also a new tax enforced but we will talk about that right after this very quick ad break we will be right back and we're back with more iGamingDaily to continue discussing taxation which continues to be a hot topic I would say but hot it's more like a burnt already a but um we were talking about European Union and how they might eventually enforce a unified gambling levy. But across the pond, Colombia is looking to tax player deposits, which is quite a unique approach as the government keeps pushing to increase fiscal pressure on the industry. So why is going on now in Colombia, which keeps like Ted said from a uh professional interests, a particular professional interest for us. Colombia is putting the food to the table, right? Food on the table. But what is going on now with the taxes in Colombia? Well, the role model market for Latin America has been going through some changes. We know that first in 2025, the government tried to introduce a 19 % VAT tax on online gaming operations. So in December, this measure was rejected by the Senate's economic commission. Only four senators voted in favor and nine against. So the 19 % tax died in a Congress. And this was applied since the beginning of the year. ah Petro, the president of Colombia declared now an economic emergency to pass other decrees regarding taxation in Colombia. And this included the same 19 % VAT. um But the constitutional court then suspended those decrees and they say they are going to study these measures to see if they are legal. After the industry pushed a lot to make the Congress cancel this decree, right? So now just the past few days, the government approved two new decrees and this established a completely new tax and it's 16 % of tax on player deposits. not on operator's revenue and not on winnings. Every time a player puts money into their account to play, that deposit is taxed at 16%. And this applies to all payment methods and well, to all their legal operators, right? Yeah. And as a player, I can't imagine um the idea of just As soon as my money goes in, even without playing, without knowing if I'm going to win or if I'm going to lose, intact already, it's just beyond my comprehension. So what immediate impact do you think this could have on player behavior? Well, of course, this is going to affect players directly and immediately. This will probably change players' behaviors in two ways. um They are going to deposit smaller amounts more often. So they try to manage the tax hit, right? Or they might feel that they have less money to play with. So the bets will be um smaller and also go to the illegal market as we always warn. Yeah, definitely. The something that will... eventually shift how players behave on betting platforms in Colombia but dead operators are the ones that will be responsible for collecting and remitting the tags. So how operationally complex is that for the gaming industry? Looking at what has been submitted, ah is strikingly visible is the fact that these are not completed mandates and they have not been thought through. I don't think that there's any government that applies a direct sweep on taxes, on player deposits. Whether that mechanism even exists is unknown. What is very real is that Colombia and Colombian gambling is in a position where it doesn't need to be and it doesn't want to be in 2026. This will be, it's I think third year consecutive kind of tax fights against the government with no kind of grounds for settlement. It looks like Petro really will do by any means necessary, whatever it takes to apply a tax and a significant one at that. impacting kind of the baseline of gambling licenses in Colombia. There's a lot at stake for the market. And of course, the question that comes straight to mind is could this model actually undermine that long-term sustainability of Colombia's regulated market considering it's the model market, it has been the model market so far for Latin America. being the first one to regulate, being the first one to put things in order, and now having these continuous attacks on the sustainability of the industry. We think this could undermine that long-term sustainability for the market. Yes, of course. Colombia is not longer the model it was in the previous years. They were also generating a good uh industry. oh The revenues were good. The responsible gaming measures were good. And now it's all uncertain and operators are not investing in the market anymore. The illegal market is growing. um Columbia is losing its credibility, right? Very true. Very true. And this is a market that's been kind of flagged up by international PLCs. Can be noted that in 2025, how much of a baseline hit it's getting from kind of its Colombian partners, which went from profit effective to profit negative within the space of six months. Also, we heard this from Colette and Thurster, they can't invest in a market where there's no settlement on tax and whether the regime keeps changing its mind. ah I think it's coming to a point of inflection. And of course, uh Lou already kind of weighed in on this one, but both jurisdictions, the European Union and Colombia, looking at taxes, Colombia going owing and saying, okay, if we're not going to be able to tax through a reform, if the justice system is going to block our attempts to enforce a VAT tax, we're going to go ahead and enforce a deposit tax through a decree. So what are you seeing with these continuous, I don't want to say attacks, but these continuous intentions or these continuous pushes to tax the gaming industry? Is this a global trend that governments and that has governments increasingly targeting the industry for fiscal revenue? It's a fair question. I begin by kind of separating. kind of cultural elements between the EU and Latin America. I think in the EU, gambling will always be governed in a fragmented state and guided by state autonomy. And to some extent, that's the truth about in Latin America and South American jurisdictions. Where I feel it's different, I think it's that you've got two very, very different camps in South America and what they want out of gambling. to your left wings and your conservatives. And there's no kind of middle ground on what the framework should be. Colombia was a good market. It now seems to be completely lost. Brazil was never allowed, has never been allowed to kind of settle on its terms. Argentina remains kind of too divided. There has to come along an example in Latin America as in what is an effective regime that protects its consumers. that is not encouraged on by the black market and is taxed effectively and taxed effectively for a good purpose, which Colombia did have at one point providing direct funds to social welfare and uh public health. It's now lost that completely for two years consecutively since the Umano government had been in charge. Once a market starts to decline, it's... a very, very long way to kind of resettle it. It's, it's a bad state at the moment. Thank you very much guys and make sure you are following iGamingDaily on all social media and your preferred podcasting platform. And now as this episode goes live, we have a second podcast going live, the Payment Expert podcast. So make sure you follow that one as well and listen to insights from the payment experts. That's what the name comes from. Thank you very much to Lugando, Ted Memmier, thank you very much to A.M. for producing this episode, I'm Fernando Nott and to our listeners out there, we'll see you in the next one. Goodbye. Thank you for listening to today's iGaming Daily Podcast, supported by OptiMove, the number one CRM marketing solution for the iGaming market. If you want to find out more about some of the subjects raised today, feel free to explore any of the sites in the SBC News Network or check out the latest edition of the SBC Leaders Magazine. Happy reading.