Colombia reinstates 16% gambling deposit tax via emergency decree

Colombia has reinstated a consumption tax on online gambling deposits through emergency decrees signed by President Gustavo Petro, setting the rate at 16% and applying it to all online operators serving the local market — whether based in Colombia or abroad.

The decrees, issued on 13 March 2026, target cash deposits made by bettors to online games of chance. The stated justification is severe flooding across eight of Colombia’s provinces, with the government arguing additional emergency revenue is required to fund disaster relief.

Budget pressure behind the decree

The gambling levy forms part of a broader emergency fiscal package. The decrees also seek to add COP8.6 trillion ($2.3bn) to Colombia’s 2026 national budget, which the government says is “insufficient for the annual provision for disaster and public calamity relief.”

That budget shortfall traces back to late 2025, when Petro’s original 2026 budget proposal was rejected by congress. A revised version was approved but came in COP10 trillion lower than the initial proposal, leaving a structural gap that the government is now attempting to close through emergency measures.

Petro’s presidency ends later this year ahead of elections in May, making the fiscal maneuvering particularly charged. The government has defended the legal basis for the new levy, stating that prior emergency tax measures do not prevent it from deploying similar tools in response to distinct crises.

“The adoption of tax measures in a previous emergency does not prevent the national government from using them again in a subsequent exceptional situation to address a different crisis,” the decree stated.

A sector with a long memory of emergency taxes

This is not the first time the Petro administration has reached for gambling taxes to fund emergency spending. In February 2025, the government imposed a 19% VAT on online gambling deposits in response to civil unrest in the Catatumbo region near the Colombian-Venezuelan border.

The effects were significant. By April 2025, the Colombian Federation of Gambling Entrepreneurs reported that online GGR had fallen 30% since the VAT’s introduction. The damage extended beyond operators: the Colombian health sector received COP990 billion from gambling taxes in 2024, a revenue stream directly threatened by a shrinking licensed market.

Efforts to make the 19% VAT permanent subsequently failed. The government’s Financing Law was rejected by the Senate’s Fourth Committee in December 2025. The deposit-based structure was then shifted to a GGR-based model, but that emergency decree was suspended in January 2026 by the Colombian Constitutional Court, which flagged constitutional concerns.

The new 16% deposit tax is set at a lower rate than its 2025 predecessor and is framed around a different emergency — flooding rather than civil unrest. Whether that distinction is sufficient to survive judicial review remains to be seen. The Constitutional Court’s January intervention demonstrated the administration’s measures are not immune to challenge, and the sector will be watching closely for any new legal proceedings.

Operators face recurring uncertainty

For licensed operators in Colombia, the pattern is now well established: emergency decrees, deposit-based levies, legal challenges, and an unstable tax environment that makes long-term planning difficult. The 16% rate is lower than the 19% applied in 2025, but it sits on top of Colombia’s existing 15% standard gambling tax, compounding pressure on margins.

Colombia was among the earlier LatAm markets to establish a regulated online gambling framework, and its licensed sector has grown accordingly. That regulated base is what gives the government the mechanism to levy these taxes in the first place — but repeated emergency impositions risk accelerating the shift of players toward unlicensed alternatives, undermining the tax base the decrees are designed to exploit.

Brazil’s own deposit tax debate provides a regional parallel. The CIDE-Bets proposal currently before the Chamber of Deputies would apply a 15% levy on player deposits in Brazil, with similar warnings from industry bodies about black market migration. Across LatAm, regulators and legislators are confronting the same tension: gambling generates significant tax revenue, but deposit-based levies in particular carry a structural risk of driving activity offshore.

Colombia’s Constitutional Court will likely face pressure to revisit the new decree. The government’s argument — that each emergency is legally distinct — may hold, but the sector has already demonstrated it is prepared to mount legal challenges. The outcome will shape not only Colombia’s tax landscape but the broader template for emergency gambling taxation across the region.

Source: iGaming Business