PokerStars on the problems with Colombia’s regulated market
Operator’s VP of communications, Eric Hollreiser, explains what international operators want to see before applying for licences
Colombia became the first Latin American country to regulate pure online gambling back in June, issuing its first licence to sportsbook WPlay.co.
However the issuing of the first licence also brought with it ISP blocking for non-licensed firms resulting in PokerStars withdrawing from the country.
The firm had issues with things like the segregated market and the extensive technical requirements.
Below, Eric Hollreiser, vice president of corporate communications for PokerStars, details how the Colombian regulator can make its framework attractive for international operators
Q) What are the main issues you have with Colombia regulation and what would you like to see changed?
A) When the regulations were published we were surprised, both pleasantly and unpleasantly. The Colombian regulator got a lot of things right, such as licensing fees, payment methods, the requirement of responsible gaming controls and exploitation rights rate. In Colombia, exploitation rights are implemented instead of taxes as gaming is a state monopoly. But there were two deal breakers for us: VAT on online gaming, which they have now changed but made gaming unappealing to customers or uneconomical for operators, and closed liquidity. Colombia would be the smallest segregated poker market in the world by player count, inclusive of individual US states. It makes local licensing untenable for us.
The requirement to go through full technical certification prior to applying for a licence is another problem for us. For first-time local operators the issue is less significant because you’re building a platform from scratch, but the level of investment needed without knowing if you’re going to get a licence isn’t good business for major operators. In other regulated markets, operators have been given a six- to 12-month window to get their products up to speed. This allows regulators to collect licensing fees and taxes while operators are working towards meeting those regulatory standards, helping to grow the market and bringing first in class responsible gaming practices to the fore. Everybody wins. If Coljuegos addressed these points, it’s likely that international operators would support it.
Q) What type of conversations are you having with the regulator and what are they saying?
A) We have been in constructive dialogue with the regulator in Colombia and intend for that to continue. Coljuegos has got a lot of things right and we’d like to think that they have taken feedback on board, from us and other expert parties. We’re making the argument for switching to international liquidity, as well as providing them with how other locally licensed markets allow a grace period for operators for technical certification.
As keen supporters of regulation, we are always keen to have open and frank discussion. We are always optimistic that if there’s open dialogue that positive change will eventually be reached, which is what regulators, consumers and operators want.
Q) I’ve seen talk of international servers being permitted and international liquidity expected late 2017 – is this your understanding and would that change your mind?
A) Colombia has a fantastic, highly engaged poker community and the market itself is attractive for our other verticals, but shared international liquidity would of course remove a significant roadblock. Online poker needs liquidity to thrive. We all know that and so we would consider that change to be a significant positive step.
Q: And your thoughts on tax rates and fees?
A: The rates are reasonable and should lead to a successful locally licensed market as they balance the interest of players, operators and the state fairly. There is a tax on winnings for players which could have a negative impact but my understanding is that it also applies to land-based gaming. That wouldn’t be a quick or easy change to make. We think these are one of many things the regulator has got right.
Coljuegos should be congratulated, not only on being the first country in Latin America to regulate online gaming, but also on their approach to the process. While we still have issues with some of their current regulation, they’ve been willing to listen to feedback and scrutinise data. We look forward to reaching a point where applying for a licence makes sense for us.