"Colombian VAT Decree Sparks Black Market Surge, Warns Codere Online CEO"

Codere Online CEO Aviv Sher has expressed concerns that the 19% VAT on deposits in Colombia could drive consumers to the black market. He criticized President Gustavo Petro’s emergency decree during the operator’s Q4 analyst call on February 20.

Sher described the new VAT as a “huge, huge, huge tax.” He suggested that such a high tax rate could make operations difficult and potentially push players towards non-regulated environments instead of staying in the regulated ones.

Codere Online CFO Oscar Iglesias noted that while Colombia currently represents a smaller portion of the group’s NGR, the new VAT introduction presents a “significant issue.” He advised adopting a conservative approach, acknowledging that the tax might have lasting effects and is not merely temporary.

In response to the new tax, Codere Online plans to reassess its strategy from both legal and operational perspectives. Rush Street Interactive also voiced concerns, contemplating reductions in operating expenses and marketing to mitigate the tax’s impact.

The Colombian trade body Fecoljuegos criticized the decision, emphasizing the need for a balance between tax collection and supporting an industry that provides employment and resources.

Aviv Sher’s criticism of the 19% VAT reflects broader industry concerns about the potential for growth in the black market as a result of this policy.