Colombia's VAT Whiplash: Court Suspends 19% Deposit Tax, GGR Craters 30%
Colombia's 19% tax on gambling deposits cut online GGR ~30% and sector tax receipts 46.6% YoY before the Constitutional Court suspended it in January 2026.
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Colombia's VAT Whiplash: Court Suspends 19% Deposit Tax, GGR Craters 30%
Colombia's licensed online gambling GGR fell about 30% under a 19% tax on player deposits, and on 29 January 2026 the Constitutional Court suspended the emergency decree behind it – the first time it has ever paused an emergency economic decree. We track the numbers, the court fight and the tax that replaced it.
Key Takeaways
- Colombia taxed gambling deposits, not revenue, at 19%, so a COP100,000 deposit left only about COP84,000 to bet with.
- Online GGR dropped roughly 30% and some platforms saw deposits fall nearly 50% after the tax landed in February 2025.
- Monthly sector tax receipts collapsed 46.6% year-on-year, from COP43.3 billion in July 2024 to COP23.1 billion in July 2025.
- The Constitutional Court suspended Decree 1390 on 29 January 2026, its first-ever suspension of an emergency economic decree, restoring the standard 15% GGR tax.
- On 12 March 2026 the government signed Decree 0240, a 16% consumption tax targeting COP8.6 trillion (about $2.3 billion) for flood relief.
How Colombia taxed deposits instead of revenue
Most regulated markets tax gross gaming revenue – bets minus prizes paid. Colombia did something rarer. In February 2025 the government of President Gustavo Petro used emergency powers tied to unrest in the Catatumbo region to impose a 19% VAT on the deposit itself, the moment a player funded a betting account.
The mechanics were brutal by design. Each deposit was divided by 1.19, so a COP100,000 top-up left roughly COP84,000 of playable balance before a single bet was placed. The decree took effect on 14 February 2025 and was written to run through 31 December 2025. Colombia had regulated online gambling in 2016, the first Latin American country to do so, and this was the first tax to hit players before they had won or lost anything.
A deposit tax charges the customer for showing up, not for losing. It front-loads the entire tax burden onto the top of the funnel, where price sensitivity is highest.
Fecoljuegos, the sector trade body, warned at the time that the model was "unsustainable and unfeasible." Operators largely absorbed the cost rather than pass it to players, which protected volumes briefly but crushed margins.
The before-and-after numbers
This is the part policy writers keep citing, because the collapse is measurable. Fecoljuegos reported that online GGR fell about 30% after the deposit VAT took effect, and its chief Evert Montero said some platforms saw declines approaching 50% in both deposit counts and average deposit size per player.
The regulator's own tax data told the same story. According to Coljuegos figures, monthly operator tax generation fell 46.6% year-on-year, from COP43.3 billion in July 2024 to COP23.1 billion in July 2025 – a near-halving of the state's monthly take from the exact sector it was trying to squeeze harder.
| Metric | Before deposit VAT | After deposit VAT | Change |
|---|---|---|---|
| Online GGR (Fecoljuegos) | Baseline | Down ~30% | -30% |
| Worst-hit platform deposits | Baseline | Down ~50% | -50% |
| Monthly sector tax (Coljuegos) | COP43.3bn (Jul 2024) | COP23.1bn (Jul 2025) | -46.6% |
| Effective tax burden | ~15% of GGR | Could exceed 70% of real income | Punitive |
The health system felt the second-order hit. Colombia's gambling taxes funnel into healthcare, and the sector had delivered COP990 billion to health funding in 2024. A shrinking legal market meant less money for the social program the tax was nominally protecting. Players did not stop gambling; a share simply migrated toward unlicensed sites that charge no deposit tax, draining channelization.
The Constitutional Court's unprecedented suspension
When the emergency period lapsed, the Petro administration tried to keep the revenue flowing. Facing a fiscal shortfall reported at around $6.5 billion, it issued Decree 1390 in late 2025 as a fresh emergency economic measure to preserve the gambling tax.
The Constitutional Court stopped it. On 29 January 2026 the court provisionally suspended Decree 1390 in full – described by Sora Lawyers partner Juan Camilo Carrasco as "the first time in Colombia's constitutional history that the court has provisionally suspended such a decree." A report from magistrate Carlos Camargo, running to roughly 86 pages, flagged procedural and substantive flaws in the government's use of emergency powers for a fiscal grab.
The suspension mattered as much for constitutional law as for gambling. A court told the executive it could not keep declaring emergencies to tax its way out of budget gaps.
With Decree 1390 frozen, online gambling reverted to the standard 15% GGR tax – the ordinary regime the sector had operated under before the deposit experiment. For a brief window, operators had their normal, revenue-based tax back. The suspension then hardened into a final ruling: in April 2026 the court struck down the emergency tax decree outright, holding that the government had not shown a crisis grave enough to bypass Congress, and modulated the effects of the taxes collected in the interim.
Decree 0240: the 16% tax that replaced it
The relief was short. On 12 March 2026 the government signed Decree 0240, this time framed as a 16% national consumption tax rather than a VAT, invoking a fresh emergency over severe flooding across eight provinces. By using the consumption-tax instrument, which has firmer footing in Colombia's tax code (the Estatuto Tributario), the government aimed to avoid the constitutional trap that sank the VAT.
The target is explicit: about COP8.6 trillion, roughly $2.3 billion, for the 2026 budget and flood recovery. Operators holding a valid Coljuegos concession must collect and declare the tax to DIAN, the national tax authority, on a bimonthly basis. Reporting diverged on the base – some outlets described the levy as calculated on gross game revenue (bets minus prizes), others as triggered at the moment of deposit, including crypto deposits – a live ambiguity operators were still clarifying at signing.
| Date | Event | Effective tax on the sector |
|---|---|---|
| 2016 | Colombia regulates online gambling (Coljuegos) | 15% GGR |
| 14 Feb 2025 | Emergency decree: 19% VAT on deposits | ~19% of deposits |
| 1 Jan 2026 | VAT shifted from deposits to GGR (~34% burden) | 19% of GGR |
| 29 Jan 2026 | Constitutional Court suspends Decree 1390 | Back to 15% GGR |
| 12 Mar 2026 | Decree 0240: 16% consumption tax | 16% (base disputed) |
For operators and affiliates, the base of a tax matters more than the headline rate. A 19% deposit tax is far heavier than a 19% GGR tax, because deposits dwarf net revenue. Model the effective burden, not the percentage.
Why deposit taxes break a betting market
The Colombia data is now the cleanest real-world argument against taxing deposits. The logic is simple. Deposits are many times larger than GGR, because players cycle the same money through repeated bets. Taxing the deposit taxes that gross flow, so a rate that looks moderate produces an effective burden that, on Fecoljuegos's math, could exceed 70% of an operator's real income.
That is why the market contracted while the state's receipts fell too – the classic shape of a tax set past the top of its own curve. The point is not that Colombia taxed gambling; it is that the tax base it chose shrank the thing it was taxing. Anyone arguing deposit-tax policy elsewhere now has a named market with hard before-and-after numbers to point at, from the UK's own operator-tax debate to the wider region.
Colombia's turbulence also sits against a busier regional backdrop. It remains one of the more mature regulated markets in our LatAm versus Europe comparison, even as neighbouring Brazil's freshly regulated market scales up under a GGR-based model. For players, the practical takeaway is that where you deposit and how – card, transfer or crypto – increasingly carries a tax consequence, which is worth understanding before funding any account, as we cover in our guide to casino payment methods.
What happens next
The near-term politics point toward a reset rather than a stalemate. Colombia's runoff on 21 June 2026 went to Abelardo de la Espriella, who took office on 7 August 2026, ending the Petro administration that authored both emergency decrees. Legal experts including Carrasco had expected no permanent gambling tax through Congress until after the vote, and a durable framework still looks like a 2027 question – it is now the new government's to write. The same fiscal argument is playing out across the region, and we set it against the three LatAm markets moving fastest in 2026. Decree 0240 is an emergency instrument, which means it is exposed to the same constitutional scrutiny that felled its predecessor.
For now the sector operates under a tax it expects to be challenged, having just clawed back to a normal GGR regime and lost it again inside six weeks. The one settled fact is the evidence base: a regulated market that lost roughly a third of its revenue and nearly half its monthly tax contribution the moment the levy moved from revenue to deposits.
FAQ
What is the current tax on online gambling in Colombia?
As of the Decree 0240 signing on 12 March 2026, online gambling faces a 16% national consumption tax intended to raise about COP8.6 trillion for flood relief. Between the court suspension on 29 January and that decree, the sector paid the standard 15% GGR tax. Because Decree 0240 is an emergency measure, its final form may still be contested.
Why did Colombia's Constitutional Court suspend the gambling tax?
On 29 January 2026 the court provisionally suspended Decree 1390, finding the government had overstepped in using emergency economic powers to preserve the gambling levy. It was the first time in Colombian constitutional history that the court suspended such a decree, citing procedural and substantive flaws in an 86-page magistrate report.
How much did the deposit tax hurt Colombia's gambling market?
Fecoljuegos reported online GGR fell about 30%, with some platforms seeing deposits drop close to 50%. Coljuegos data showed monthly sector tax receipts fell 46.6% year-on-year, from COP43.3 billion in July 2024 to COP23.1 billion in July 2025. 2025 was the sector's first annual contraction since regulation in 2016.
What is the difference between a deposit tax and a GGR tax?
A GGR tax applies to gross gaming revenue – total bets minus prizes paid. A deposit tax applies to the money a player loads into an account before any betting. Because deposits are far larger than net revenue, a deposit tax at the same headline rate produces a much heavier effective burden, which is why Colombia's 19% deposit VAT proved so damaging.
Sources
- iGaming Business – Online GGR in Colombia falls 30% since VAT – Fecoljuegos 30% GGR drop, ~50% platform declines, deposit math, Montero quote.
- iGaming Business – Colombia gambling VAT on hold, state of emergency suspended – 29 Jan 2026 suspension, Decree 1390, 15% GGR restored, Carrasco quote, 2027 outlook.
- iGaming Business – Colombia reintroduces gambling deposit tax at 16% – Decree 0240 16% rate, COP8.6tn / $2.3bn target, flood relief, COP990bn health funding.
- iGaming Business – Colombia shifts online gambling VAT to GGR – shift from deposits to GGR effective 1 Jan 2026 and burden estimates.
- ColombiaOne – Colombia imposes 16% tax via Decree 0240 – Decree 0240 signing date, consumption-tax framing, DIAN collection, crypto deposits.
- Yogonet – Colombian government introduces new 16% tax on online gambling – bimonthly GGR base, Coljuegos concession requirement.
- iGamingToday – Discrepancies in Colombia's online gambling tax revenues – Coljuegos COP43.3bn to COP23.1bn, 46.6% YoY decline.
- Yogonet – Colombia to apply 19% VAT to online gambling until 2026 – 14 Feb 2025 effective date, run to 31 Dec 2025, Catatumbo emergency origin.
- EY – Colombian government establishes temporary taxes amid State of Internal Unrest – legal basis for the emergency VAT and the internal-unrest declaration.
- SBC News – Colombia: Petro must pass VAT on gambling via Congress – post-decree political path, election-year constraint, congressional requirement.