Colombia has restructured its taxation policy for online gambling, shifting the 19% Value Added Tax (VAT) from player deposits to gross gaming revenue (GGR). This policy change was implemented through an emergency decree at the end of December. The modification is significant from a regulatory perspective, as it aligns tax collection with the actual revenue operators generate, addressing long-standing industry concerns about the previous system’s impact on market dynamics.
The change follows persistent criticism from industry stakeholders who argued that taxing player deposits imposed undue burdens on legal operators and drove players toward unregulated markets. Previously, operators faced a tax on deposits even if those funds were withdrawn before any bets were placed, often resulting in effective tax rates exceeding 70% of real income. By moving the VAT to GGR—defined as total wagers minus payouts—the tax burden now aligns more closely with actual earnings, offering a somewhat reduced yet still substantial combined tax rate of around 34%. This adjustment provides a narrow competitive margin against illegal platforms.
Industry associations such as Fecoljuegos have long advocated for this reform, emphasizing that the previous tax structure failed to recognize the financial dynamics of online gambling. The funds within the system, taxed as income, could circulate multiple times without constituting real revenue. Evert Montero, president of Fecoljuegos, criticized the old model for taxing deposits before any betting activity occurred. The revised decree addresses these concerns by taxing GGR, which more accurately reflects operator earnings and reduces market distortions.
Despite the reform, Colombia’s gambling tax regime remains among the highest globally. Operators are still subject to various taxes, including exploitation rights and income taxes, which maintain a heavy financial burden compared to international standards. Fecoljuegos has acknowledged the reform as a positive development but insists that further comprehensive reforms are necessary to enhance competitiveness and attract investment. They stress the importance of ongoing dialogue with regulatory authorities to establish a tax framework that fosters market growth and formal employment.
The organization notes that the current tax system still distances Colombia from global benchmarks. They assert that a more competitive tax structure is essential to draw technological development and strengthen the country’s legal gambling sector. Looking towards 2026, maintaining a balanced approach between government revenue collection and the sustainability of the legal gambling sector remains a critical challenge.
Next steps involve sustained discussions between industry representatives and government officials to refine Colombia’s gambling tax policy further. Such dialogues aim to develop a regulatory environment that supports both fair taxation and the economic viability of legal operators, thereby ensuring the sector’s growth and its contribution to the national economy.
Erik Agary is a seasoned writer at True Games Reviews, specializing in gaming, casino games, and interactive entertainment. With a passion for all things digital, Erik dives deep into the latest trends and developments in the gaming world, offering insightful reviews and detailed analysis. His expertise spans across multiple gaming platforms, ensuring comprehensive coverage that resonates with both novice and experienced gamers alike.
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