Colombia Stands Firm on 19% VAT for Online Gambling Amid Industry Backlash
Colombia’s government is standing firm on its controversial 19% online gambling VAT, dismissing intense criticism from the gaming industry and concerns over a booming black market. Signed into law by President Gustavo Petro under Decree 175 of 2025, this tax on online gambling deposits is part of an emergency economic package to fund humanitarian efforts in the conflict-torn Catatumbo region. colombia
Effective since February 21, 2025, and set to expire on December 31, the Colombia online gambling VAT targets every deposit made to licensed online gambling and sports betting platforms, including those using cryptocurrencies. Paired with a 1% tax on coal and gas sales and a 1% stamp duty on securities deals, the VAT supports a COL$523 trillion welfare-focused budget. The Finance Ministry is already considering making this “temporary” tax permanent, signaling long-term fiscal plans.
The Attorney General’s Office staunchly defends the VAT, arguing its legality and necessity. “The measures in Decree 175 are proportional and non-discriminatory,” said Gregorio Eljach, President of the Attorney General’s Office. “They’re critical for funding public order and humanitarian efforts.” Eljach has urged the Constitutional Court to uphold the tax, emphasizing its role in stabilizing violence-plagued regions.
The gambling industry, however, is sounding the alarm. Fecoljuegos, Colombia’s national trade group, reports a 30% drop in online gambling gross gaming revenue (GGR) within the first month of the Colombia online gambling VAT. Players are flocking to unregulated offshore platforms to avoid the tax. “The Colombia online gambling VAT is pushing players to unlicensed sites,” said Evert Montero Cárdenas, President of Fecoljuegos. “Operators are struggling to absorb costs despite offering bonuses.”
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The tax’s structure—levied on deposits rather than net revenues—is particularly damaging. Kambi, a leading Stockholm-listed sportsbook provider, noted a “significant squeeze” in Colombia. “The 19% Colombia online gambling VAT directly suppresses betting volumes,” Kambi stated, highlighting its negative impact on performance despite the company’s strong market position.
Trade groups like Asojuegos warn that the tax is eroding South America’s robust regulated market. The tax incentivizes lower return-to-player (RTP) rates, potentially pushing licensed operators below the 78% compliance threshold and into legal trouble. The shift to unregulated platforms further undermines the market’s integrity, threatening one of Colombia’s thriving digital sectors.
With opposition mounting, even within Petro’s coalition, the VAT faces an uncertain future. The government must balance its fiscal needs with the risk of crippling a key industry. Without a rethink, the tax could drive more players to the black market, undermining Colombia’s regulated gambling framework.
