In Colombia, President Gustavo Petro is pushing for a permanent 19% value-added tax (VAT) on online gambling, despite a recent intervention by the Constitutional Court, which has temporarily halted parts of his emergency economic strategy. This tax was initially introduced as a temporary measure on online gambling deposits and later incorporated into Petro’s emergency efforts to stabilize the 2026 budget. The court’s current suspension is due to concerns over the legality of these measures.
Colombia’s Finance Minister, Germán Ávila, revealed that he has been directed to formalize the 19% VAT as a permanent feature in the upcoming 2026 budget proposal. This move by Petro’s administration signals an intention to treat online gambling as a consistent revenue stream rather than a stopgap solution. The timing is critical, as it coincides with the general election scheduled for May 31, 2026.
The Constitutional Court’s pause provides a temporary respite for operators, but it does not offer long-term assurance. The court’s review of the emergency decree’s legitimacy could force the government to seek approval through traditional legislative avenues if it rules against the emergency path. Alternatively, should the court uphold the decree, the VAT could be reinstated swiftly, potentially with little warning for operators.
The introduction of the 19% VAT has faced significant backlash from the regulated online gambling sector. Industry representatives argue that the tax drives players away from licensed platforms to illegal ones, thereby decreasing government revenue instead of boosting it. Evidence cited by industry insiders includes a notable decline in contributions: July 2025 saw contributions fall to 23.1 billion pesos, a stark drop from the 43.3 billion pesos recorded in July 2024, reflecting a 46.6% decrease. Evert Montero Cárdenas, head of Fecoljuegos, has labeled the VAT as “an unsustainable burden,” highlighting that operators have relied on bonuses to mitigate the impact and shield consumers from the full cost.
Major gaming operators are voicing their concerns about the tax’s potential to freeze investment. Codere, a prominent player in the market, has indicated reluctance to commit to further investments in Colombia unless there is a policy reversal. Oscar Iglesias, the outgoing Chief Financial Officer of Codere, told investors that the political climate post-election could significantly influence the duration of the VAT. He suggested that even with legislative backing, a future government might reverse the tax if it fails to meet revenue expectations.
The decision now rests with the Constitutional Court, whose verdict will determine the next steps for Colombia’s online gambling tax policy. Should the court deem the emergency measures legitimate, operators might face immediate compliance demands. Conversely, a requirement to pursue the tax through standard legislative processes could delay implementation, offering operators additional time to adjust their strategies.
As the country awaits the court’s ruling, the implications for the gambling industry remain in flux. Operators, regulators, and policymakers alike are preparing for various outcomes, each carrying significant potential impacts on market dynamics and regulatory frameworks. The industry’s response and the broader economic implications will likely shape the future landscape of online gambling in Colombia. The outcome of this legal and political process will be pivotal in determining the stability and predictability of the regulatory environment for international and local stakeholders.
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