Stake Launches VAT Cashback for Colombian Gamers

Stake has unveiled a strategic promotional offer aimed at offsetting the newly enforced 19% value-added tax (VAT) on deposits made by players in Colombia. As a global leader in online betting, Stake has introduced an individual voluntary arrangement cashback scheme designed to return the taxed VAT portion to its users, mitigating the financial strain instigated by the tax policy that came into force in February. The betting giant, which officially entered Colombia's regulated market landscape in 2023, emphasized its unwavering commitment to providing a seamless experience for its users despite new regulatory challenges. The VAT applies to all deposits on sanctioned online gambling platforms and comes as a result of emergency legislation enacted by the Colombian government, which removed the prior tax exemption for the gambling industry. Initially proposed in 2023 and met with resistance, the tax legislation was eventually passed under Decree No. 0175 on February 12, 2023, with enforcement commencing on February 22, 2023.

Commitment to Player Satisfaction

Diana Otálora, Stake’s General Country Manager for Latin America, reiterated the company's dedication to compliance with tax obligations while maintaining player satisfaction. She stated on February 25, "That’s why we have to adapt to the government’s measure regarding the 19% tax and comply with the required deadlines. Therefore, we are adopting internal measures so that our customers can continue playing without being affected by this situation." The tax implementation aligned with Stake’s acquisition of Betfair Colombia, which bolstered its position within the nation’s regulated gambling scene. Concerns, however, have been raised by industry stakeholders about the implications of VAT on the market. Juan Carlos Restrepo, president of Asojuegos, the national gambling trade association, has warned that this new tax might drive players towards unregulated operators, thereby undermining the sustainability of the legal market. He noted that with the VAT, "the return to the player would be reduced from 93% to 71%-75%, which would cause players to migrate to illegal or international platforms that are not subject to these tax burdens."

Facing Legal and Market Challenges

The Colombian government introduced the VAT as part of comprehensive measures to fund emergency operations addressing violent unrest in the Catatumbo region, a conflict which has displaced approximately 80,000 people according to United Nations reports. The legal and operational hurdles presented by the new tax are significant. Juan Camilo Carrasco, a legal partner at Bogotá-based Asensi Advogados, described the complexities operators face, likening it to "pushing the operators into the fence." He emphasized the difficulty in collecting taxes without the capability and the risk of legal breaches when attempting to comply hastily. In response to these challenges, Stake's remuneration program seeks to cushion players from immediate tax implications while aligning with Colombian tax laws. This strategy illustrates Stake's proactive stance in navigating regulatory uncertainties while continuing to support market stability and growth. Source: 'Stake to credit Colombian players with VAT bonuses to offset new tax', igamingbusiness.com, February 25, 2025. By GamesAndCasino