New 19% VAT to Impact Colombia’s Online Gambling Market
The introduction of a 19% Value Added Tax (VAT) on online gambling deposits is set to shake up Colombia’s thriving industry. As one of Latin America’s most regulated gambling markets, the country has experienced significant growth since legalising the sector in 2016. With international operators such as Betano and RushBet entering the market, industry analysts predict Colombia’s gross gambling revenue (GGR) will exceed $2 billion by 2027.
The new tax, formalised through Decree N°0175, applies to all player deposits made via cash, bank transfers, or cryptocurrency, reducing the funds available for betting. With operators and players now adjusting to this change, the new tax is expected to impact deposit values, player engagement, and overall market dynamics. Fortunately for players, though, this won’t affect any new no deposit bonuses they might have been hoping to use when playing their favourite casino games.
Pushback
Unsurprisingly, the Colombian gambling industry has not taken the newly imposed 19% VAT on online gaming lightly, citing significant operational and legal concerns. One of the main issues raised is the lack of a transition period, leaving operators scrambling to modify their gaming systems to comply with the new tax requirements. Since any system changes require recertification, operators risk violating gambling laws, which could lead to severe penalties, including prison sentences of up to nine years and heavy administrative sanctions if they implement the tax without proper approval.
There is also concern that this “temporary” VAT could become permanent, as tax policies are often extended beyond their initial time frame. Additionally, industry experts find it unusual that the decree references both local and foreign operators, despite offshore gambling platforms being banned in Colombia.
Black Market Woes
Players looking to avoid the 19% tax may turn to offshore gambling sites, using VPNs to access platforms that operate outside Colombia’s jurisdiction. In response, the country’s gambling regulator, Coljuegos, has been cracking down on illegal gambling websites that operate without a local licence. These blocked sites include virtual casinos, bingo halls, and sports betting platforms running unauthorised raffles. Additionally, Coljuegos has launched 35 administrative sanctions against influencers and companies promoting illegal gambling through social media in Colombia.
To step up enforcement, Coljuegos has enlisted help from the national police’s cyber centre and tech giant Meta to shut down 289 social media profiles involved in advertising and promoting unlicensed gambling activities, including raffles and bingo. Anyone caught operating or supporting illegal gambling could face a fine of up to COP 142,350,000—100 times the country’s minimum wage—demonstrating the government’s firm stance on protecting the legal gambling market.
Colombia’s regulated gambling industry plays a vital role in funding the country’s healthcare system. In 2024 alone, licence fees contributed approximately COP 419.5 billion, with just 16 licensed operators collectively paying around COP 435.2 billion (£84.1 million/€101.2 million/$104.5 million). All of this revenue is allocated to Colombia’s subsidised healthcare system.
However, becoming a licensed operator comes at a high cost, with the annual licence fee set at 811 times the Colombian minimum wage. Meanwhile, unlicensed black market sites avoid these expenses, creating an uneven playing field. Instead of increasing government revenue, the new tax could push players toward unregulated platforms that do not charge VAT. This could reduce the tax income from the legal market while giving illegal operators an advantage, ultimately weakening the country’s regulated gambling industry.
Why Now?
The new VAT was introduced as part of emergency measures to address the humanitarian crisis in the Catatumbo region, where violent clashes between rebel groups have displaced tens of thousands of people. Although an attempt to impose this tax was initially blocked in December, it was reinstated in January under Article 213 of Colombia’s Political Constitution, which allows the president to take urgent action in response to serious public disturbances.
The tax is intended to generate additional revenue not accounted for in the national budget, helping to fund efforts to manage the crisis and prevent its escalation. The government aims to raise COP 1.06 billion ($252.3 million) through this measure, with funds exclusively allocated to addressing the internal emergency. Alongside the gambling tax, the decree also introduces additional levies on the crude oil and coal sectors, as well as a new stamp tax, to further support relief efforts.
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