Colombia gambling tax suspended by top court

• Colombia’s Constitutional Court has provisionally suspended an emergency decree imposing a 19% VAT on online gambling.
• The court’s 6-2 decision halts all provisions of Decree 1390 until a full constitutional review is completed.
• The suspension removes the additional tax layer, returning operators to the standard 15% GGR tax structure.

Colombia’s Constitutional Court has dealt a significant blow to President Gustavo Petro’s fiscal strategy by suspending an emergency decree that imposed a 19% value-added tax on online gambling operators.

The court issued a provisional suspension of Decree 1390 of 2025 on 29 January 2026, halting all measures introduced under the government’s declaration of an “economic and social emergency”.

President Petro defended the decree, stating:

“We are facing a real breakdown of constitutional order, simply because there is a government that is friendly to working people. As long as it remains in power, any debt costs will not be paid by working people.”

Court decision and constitutional concerns

The suspension, reached by a 6-2 majority, stems from an 86-page report authored by Magistrate Carlos Camargo showing serious procedural and substantive flaws in the emergency decree’s justification.

The court questioned whether Colombia’s fiscal situation met the constitutional threshold required to invoke emergency powers. Magistrate Camargo’s opinion emphasised that constitutional safeguards must prevail even during declared emergencies, with the court concluding that allowing the tax to proceed without full review could undermine foundational principles.

The provisional suspension takes effect immediately and remains in place until the court issues a final ruling on the decree’s constitutionality. This timeline remains uncertain, with legal observers suggesting the review process could extend for months.

The decision represents a rare intervention by Colombia’s judiciary, marking the first time the Constitutional Court has vetoed an emergency economic decree affecting gambling taxation.

Tax structure and legislative background

The suspended 19% VAT was originally introduced in February 2025 to fund expenses linked to ongoing civil disturbances in the Catatumbo region. The government initially applied the tax to player deposits before shifting to gross gaming revenue in late 2025.

With Decree 1390 frozen, licensed online gambling operators return to the standard tax framework that applied before emergency measures, including the 15% GGR tax established for Colombia’s regulated online gaming market.

The government had attempted to make the 19% VAT permanent through its Financing Law, but the Senate’s Fourth Committee voted 9-4 to reject the measure in December 2025. The legislative defeat signalled weak congressional support for additional tax pressure on the gambling sector.

Finance Minister Germán Ávila criticised the congressional vote as “strictly political, defeatist, and disconnected from the country’s fiscal and social reality.” The failure of the Financing Law left the government facing a fiscal gap tied to rejected revenue provisions worth COP 16.3 trillion ($4.3 billion) for the 2026 budget.

Political context and legitimacy questions

President Petro’s administration presented Decree 1390 as a critical measure to address pressing fiscal challenges, invoking constitutional emergency powers to bypass Congress during its December recess.

The decree would have not only enacted the gambling VAT but allowed Petro to use extraordinary powers for 30 days to implement additional tax measures. The Constitutional Court’s intervention halted this executive authority pending judicial review.

Legitimacy concerns arose regarding signatures from several ministers on the decree. The court questioned whether interim ministers held sufficient legal authority to impose such emergency measures, resulting from Petro’s frequent cabinet reshuffles — 15 times since taking office in 2022.

Potential tax scenarios

The most plausible outcome sees the VAT permanently rejected based on constitutional concerns, with the government deferring new gambling tax proposals to normal legislative processes after the 2026 elections.

Another scenario includes reintroducing a deposit-based VAT through new legislation or attempting to pass a conventional tax law to establish a GGR-based VAT. Both options appear improbable in the near term given political resistance.

The Colombian Federation of Gambling Entrepreneurs (Fecoljuegos) had warned the 19% VAT was “unsustainable and unfeasible,” arguing it could drive licensed operators from the market and create space for illegal gambling activity.

Revenue contributions and market context

Colombia’s legal gaming industry has made substantial contributions to public services. By July 2025, the sector had transferred approximately COP 926 billion ($232 million) to the public health system, including COP 566.5 billion from national games like casinos, bingo halls and online platforms — marking 26.9% growth compared to the previous year.

Coljuegos president Marco Emilio Hincapié stated that around $205.6 million had been gathered for national healthcare financing in 2025, attributing success to new regulated gaming products, enforcement against illegal operators and technological modernisation.

Land-based casinos and bingo halls alone contributed an estimated COP 378.268 billion ($105 million) to the subsidised health system in 2025, representing 9.3% growth from 2024.

Colombia became a Latin American pioneer by comprehensively regulating online gambling in 2016 through its eGaming Act. The country’s regulatory framework, overseen by Coljuegos since 2011, establishes licensing, compliance and market supervision for all legal gambling activities.