Browse topics

• Governing law

  Name	Law or Code?
  Constitution – Article 336, that establishes that all profits obtained from any gambling activity represent a monopoly for the nation. Such profits can only be destined to health programs.	Constitution
  Law 643 of 2001, which regulates all gambling activities and any kind of games of chance (meaning any game whose result is unpredictable and does not depend on the gamer’s abilities). This law also provides a definition of game of skill and dexterity.	Law
  Decree 1068 of 2015, Part 7 – Regulation of Law 643 of 2001	Decree
  Resolution COLJUEGOS 135 of 2012 – Establishes rates and requirements	Resolution
  Law 1581 of 2012 – Data Protection	Law
  Law 1480 of 2011 – Consumer Protection Law	Law

  Last modified 25 Jan 2019

• Extra-territoriality

  The rules only apply to companies that operate within the Colombian territory. If the games are considered to be games of chance, they must have a prior authorization from Coljuegos (the authority in charge of administering and regulating these matters).

  Regulations in relation to gambling activities do not apply to prize promotions conducted by companies from abroad with no base in Colombia, nor prize promotions from games of skill and dexterity. Nonetheless, various other laws such as the consumer protection law or data privacy law or intellectual property, in some cases, may apply to prize promotions conducted from abroad in which the customers are located within Colombia.

  Last modified 25 Jan 2019

• Skills competitions

  Yes, prize promotions can be based on skill; however, such activities are not subject to any specific regulation. They must only fulfil general Consumer Protection Law requirements and data privacy regulation, considering that through the competition, the company might collect personal data of the contestants or participants.

  Profits obtained from competitions where the winners are determined merely on skill are not considered as part of a state monopoly. In this regard, when an element of chance is not involved, the activity might be carried out for marketing purposes, without requiring any specific permission from the Colombian authorities. Therefore, Law 643 applies to any game of chance whether the participant has to pay directly something to participate or not.

  Last modified 25 Jan 2019

• Prize draws

  Yes, Colombian law specifically regulates prize promotions when there is an element of chance in the selection of a winner.

  Article 336 of the Colombian Constitution establishes that all profits from prize promotions and gambling activities where winners are chosen randomly, are considered as a state monopoly; nevertheless, the state might authorize private entities or individuals to perform such activities. In this event, such activities can only be performed with a governmental authorization and by paying the corresponding fee.

  For promotional games, providing that they do not require a direct payment to participate, they do not generate “profits”, and so the exploitation rights or fees are calculated based on the value of the award scheme. The value of each prize from the award scheme cannot exceed 160 times the monthly minimum legal wage (approximately US $44,166 [See note 1]), and the prizes shall be delivered within 30 calendar days. Performing the activity without obtaining a governmental authorization is illegal and may be prosecuted under Colombian criminal law.

  Note 1: For all the purposes of this section, a Colombian monthly minimum legal wage for 2019 is equal to COP $828.116 (approximately USD $276).

  Last modified 25 Jan 2019

• Selection of winners

  When a sweepstake’s winner is to be selected based on a ticket’s number, the winner number can only be determined in accordance with the winning number of a public lottery for a previously determined date. In such cases, during the day prior to the draw, all tickets that were not granted to customers must be presented before Coljuegos, which is the governmental authority in charge of supervising such activities.

  Whenever the winner is not to be determined by a ticket number, winners must be selected randomly.

  Prizes must be received within 30 days following the date of the draw. Nonetheless, winners have up to a year to claim a prize.

  If the prize is not claimed, the promotors must pay Coljuegos an amount equal to the value of the prizes that were not claimed by the winner(s).

  Last modified 25 Jan 2019

• Judges

  Competitions where the selection of winners is determined by skill, are not regulated by Colombian law. In this regard, such activities must be in accordance with the Consumer Protection Law, which states that all terms and conditions must be previously posted and completely informed to consumers.

  Last modified 25 Jan 2019

• Prizes

  Prizes awarded must be described in a manner that is compliant with the general consumer protection law.

  Money cannot be awarded as a prize unless the promotor is a financial institution. Prizes awarded by any other type of company or individuals must be either services, real estate, or any other kind of movable goods, except for securities.

  For promotional games, the value of each prize from the award scheme cannot exceed 160 times the monthly minimum legal wage (approximately US $44,166 [See note 1]), and the prizes shall be delivered within 30 calendar days.

  Note 1: For all the purposes of this section, a Colombian monthly minimum legal wage for 2019 is equal to COP $828.116 (approximately USD $276).

  Last modified 25 Jan 2019

• Registration requirements and fees

  Registration Requirements

  To carry out a prize promotion in Colombia, an authorization from Coljuegos, which is the public entity in charge of administering the state monopoly of gambling activities, must be obtained.

  To this effect, where there is a payment to enter, a fee equal to 14% of the value of the gross income (100% of the tickets sold) must be paid.

  For promotional games (with no direct payment to enter), as they do not generate an income, the fees are calculated based on the value of the prizes to be awarded.

  An administrative fee equal to 1% of the value of the prizes to be awarded must be paid.

  Regarding online games, operators have to pay annual fees equivalent to 811 times the legal minimum monthly wage (US $223,867 approximately) and fees equal to 17% of the gross income.

  For these purposes, online games are understood as games of chance in which the sweepstake and the payment of the prize are made through internet. If the sweepstake is made through physical means and the internet is only a means of commercialization, the game is not considered an online game.

  Fees/Taxes payable

  Players will be subject to capital gain tax at a 20% rate on the amount of paid prizes. This tax will be paid completely through the withholding applied by the prize promotion operator.

  Prize promotion and gaming activities, unlike online gaming activities, are subject to 19% VAT. Tax basis varies depending on the type of prize promotion/ gaming activity.

  Prize promotion operators are subject to corporate income tax at a fixed rate of 33% over any net income generated from the prize promotion activities in Colombia. Corporate income tax rate will be reduced progressively until 30% as of 2022. For purposes of calculating the net taxable income, the online gaming/ prize promotion operator can treat as deductible expenses the prizes paid to the participants.

  Last modified 25 Jan 2019

• Other local requirements

  To obtain an authorization from Coljuegos, a request must be presented at least 10 days before the beginning of the marketing campaign. The request must include the following information:

  • Legal identification of the individual from the company promoting the prize;
    
    
  • An invoice certifying the purchase of the good or service that constitutes the prize;
    
    
  • All technical and economic information regarding the prize that will be awarded;
    
    
  • A certificate stating that a performance bond equal to the value of the prize will be issued by the promoter;
    
    
  • A draft of the advertisement that will be used to promote the prize.

  After paying the fees and issuing the performance bond, the authorization will be granted by Coljuegos for a term of up to a year.

  When advertising the promotion through a visual medium, a stamp of authorization from Coljuegos will be needed. Whenever the promotion is to be made by radio or any other non-visual method, the advertisement must include a statement indicating that such promotion is authorized by Coljuegos.

  Last modified 25 Jan 2019

• Timing

  The application for an authorization must be presented by the promoter at least 10 days before the beginning of the advertising campaign. Nonetheless, the authorization might, in some cases, take more than 10 days. The campaign cannot, in any circumstances, start without an authorization.

  Last modified 25 Jan 2019

• Translations

  All terms and conditions must be presented in Spanish. Additionally, when applying for an authorization before Colombian authorities, all documents must be in Spanish.

  Last modified 25 Jan 2019

• Penalties for non-compliance

  Considering that profits obtained from gambling activities and prize promotions (excluding promotions that are competitions where the winners are determined solely on the basis of skill) are considered as a state monopoly and that, therefore, such activities can only be performed by individuals or companies that are authorized, any prize promotion carried out without such authorization is considered illegal.

  Article 312 of the Colombian Criminal Code establishes that exploiting a state monopoly without a governmental authorization entails a fine of between 500 and 1,000 times the monthly minimum legal wage (between US $138,019 and $276,038 approximately), and a prison sentence from 6 to 8 years.

  Additionally, Coljuegos is entitled to impose fines on individuals or companies performing prize promotions without an authorization or with an authorization obtained unfaithfully. Such fines can be up to 200% of the value of the fees that should have been paid to Coljuegos for the exploitation rights.

  Other authorities might impose other penalties due to the violation of specific regulations, such as the data protection law or the consumer protection law.

  Last modified 25 Jan 2019

• Restrictiveness of regulations

  Although permission is rarely denied, prize promotions (excluding promotions that are competitions where the winners are determined solely on the basis of skill) are subject to governmental authorization and a fee for the exploitation rights must be paid in all cases.

  In addition to the general rules applied to advertisements such as consumer protection law, other specific regulation applies for prize promotions. If, during the promotion, there is collection of personal data, the company shall ensure that the data subject has granted a written authorization for the collection and processing of personal data, prior to the collection.

  Last modified 25 Jan 2019

• Regularity of sanctions

  Although prison sentences are rarely imposed, governmental penalties such as fines are regularly imposed when a prize promotion is being carried out without an authorization or in violation of the specific regulation. Additionally, other penalties can be imposed for the violation of the consumer protection law or the data privacy law.

  Last modified 25 Jan 2019

• Key contacts
  

  María Claudia Martínez Beltrán

  Senior Associate DLA Piper Martinez Beltran [email protected] T (57) 1 317-4720 View bio

  

  Daniela Huertas Vergara

  Junior Associate DLA Piper Martinez Beltran [email protected] T +57 1 317 4720

  

  María Alejandra Buitrago

  Senior Associate DLA Piper Martinez Beltran [email protected] T +57 1 317 4720