Published: October 4, 2023, 06:50h.
Last Updated: October 4, 2023, 06:50h.
Latin America’s gambling industry continues to flourish, especially in Colombia. Despite the country facing a recession, Colombia saw a remarkable increase of over 15% in its gambling revenue last year.
During the first eight months of this year, Colombia experienced a significant surge in gaming revenue. The country’s gaming regulator, Coljuegos, announced that the total revenue reached COP564 billion (US$133.72 million).
This represents a year-on-year growth of 16.8%, benefiting both gaming operators and government-led civic programs.
Positive Impact of Legalized Gambling in Colombia
According to Marco Emilio Hincapié, the president of Coljuegos, the revenue improvement can be attributed in part to the regulator’s crackdown on illegal gambling. These efforts have successfully redirected gamblers from unlicensed platforms to the regulated segment.
Last week, officials from Coljuegos’ Illegal Operations Control Management division, along with law enforcement, raided an establishment in Bogotá, Colombia’s capital. They seized 21 illegal slot machines, which Coljuegos estimates have cost the government as much as COL760 million (US$189,615) over the past five years.
Additionally, Colombia’s Tax and Customs Police division conducted raids on two properties in Maicao over the weekend. They confiscated multiple illegal slot machines and other gambling equipment, resulting in the arrest of one individual.
The crackdown on illegal gambling, coupled with the industry’s increased revenue, has delivered significant benefits to the government. Coljuegos has been able to contribute 22.15% more to health programs compared to last year.
Gambling Industry Outperforms the Economy
Despite Colombia’s overall economic growth slowing down, the gambling industry continues to thrive. Analysts from BBVA Research attribute this slowdown to the declining state of the construction industry, particularly concerning public infrastructure projects.
The analysts anticipate a modest growth rate of 1.2% for this year, with a slight improvement to 1.5% projected for 2024. While these projections are positive, concerns remain about the speed of the economic recovery.
According to BBVA Research, there is a potential gradual decline in inflation rates by the end of the year, with the Consumer Price Index expected to reach 9.7% in December. This anticipated decrease in prices may prompt Colombia’s central bank to progressively lower interest rates. As a result, interest rates are predicted to settle at 12.5% by the end of 2023, gradually decreasing to 7% throughout 2024.
The housing sector is facing ongoing challenges, particularly regarding its workforce, which is diminishing and may lead to downsizing. The analysts suggest that if national employment experiences a decline in 2024, it could result in a marginal increase in the unemployment rate and decreased wages.
Given these challenges, it is crucial to strengthen investments in agriculture, health, and education, as highlighted in the BBVA report. The gambling industry may provide some support in this regard.