Colombian Betting Tax Bombshell: High Court Halts 19% Levy as Operators Gain Vital Reprieve
The Constitutional Court of Colombia has delivered a shock suspension of the 19% VAT on gambling, citing constitutional concerns over emergency decrees. With an election year approaching, legal experts believe the tax is unlikely to be revived before 2027, providing a major boost to licensed operators.
- Colombia’s Constitutional Court has provisionally suspended Decree 1390, effectively pausing the emergency 19% VAT on online gambling.
- The suspension reverts the current tax burden for digital operators back to the standard 15% tax on gross gaming revenue.
- Legal experts suggest the 19% VAT is unlikely to return during the 2026 election year due to significant political friction.
- This marks a historic first where the court has frozen a presidential emergency decree before a final ruling on its constitutionality.
- The Colombian government faces a massive budget shortfall after the Senate previously rejected attempts to make these tax hikes permanent.
In a dramatic turn of events for the Latin American gambling hub, Colombia’s Constitutional Court has moved to paralyse the controversial 19% value added tax on online betting. The decision, handed down on 29 January, suspends Decree 1390, a measure that had declared a state of economic and social emergency to bypass legislative gridlock. This judicial intervention means that for the time being, the industry is no longer shackled by the 19% levy, which was being applied to gross gaming revenue. Instead, operators will return to paying only the baseline 15% tax on exploitation rights.
The suspension of the decree is a significant blow to the administration of President Gustavo Petro. The emergency powers were invoked last year after the Senate’s Fourth Committee threw out the government’s Financing Law in a 9 to 4 vote. Initially, the VAT had been applied to player deposits, a move that local industry bodies claimed made the legal market entirely unviable and forced punters toward offshore black market sites. While the government recently attempted to pivot the 19% VAT onto gross gaming revenue to appease critics, the court has now questioned the very constitutionality of using emergency decrees for such fiscal measures.
Juan Camilo Carrasco, a leading legal voice at Sora Lawyers, has noted that this is the first time in the history of the Colombian constitution that the court has provisionally frozen such a decree. With the country entering a high stakes election year in 2026, the likelihood of the government successfully passing new tax legislation through a resistant Congress appears slim. For now, the plenary chamber of the Constitutional Court will deliberate on a final ruling, but the immediate result is a rare and welcome breathing space for a sector that has been under intense fiscal fire.
This judicial freeze is nothing short of a watershed moment for the Colombian iGaming market. By suspending Decree 1390, the Constitutional Court has sent a clear message to the executive branch: emergency powers are not a shortcut for fiscal policy. From my decade in the industry, I have seen many governments attempt to squeeze the gambling sector to plug budget holes, but rarely do we see the judiciary step in so decisively to protect the constitutional process. The 19% VAT was a desperate move to fix a multi billion dollar deficit, and its removal, even if provisional, suggests that the court finds the government's justification for "emergency" measures to be legally flimsy.
The timing of this ruling is particularly lethal for the Petro administration's financial goals. With the 2026 elections loooming, no politician worth their salt wants to be seen backing new taxes, especially after the Senate already rejected the Financing Law last December. The industry is currently operating in a vacuum of certainty, but it is a vacuum that favours the operators. Reverting to a 15% GGR tax makes the Colombian market one of the most attractive in the region once again, potentially reversing the 30% slide in revenue that followed the original deposit tax introduction.
Looking ahead, the most probable outcome is that the VAT remains in limbo until at least 2027. The government is understandably furious, as they are now staring at a 16 trillion peso hole in their 2026 budget without the means to fill it. However, the industry must remain cautious. While the current court sentiment is pro constitutionality, the fiscal pressure on the state remains. We may see a smaller, more "palatable" tax measure proposed late in 2026, but for the next twelve months, the industry has successfully dodged a very expensive bullet.
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Why This Matters
iGaming Times analysis: Colombian constitutional intervention against a 19% online betting levy creates near-term breathing room for licensed operators but also reframes the political calculus on future revenue measures. The Court's procedural reasoning — whether the levy was struck on substantive proportionality grounds or on more technical drafting issues — determines whether the Treasury can return with a re-drafted version or has to find an alternative revenue line. Colombia is one of the more mature LatAm regulated markets; the precedent ripples into Brazilian and Mexican rate-setting debates.
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