Colombia’s Constitutional Court Blocks Proposed Online Gambling Tax Increase
Constitutional Court Halts New Online Gambling Tax
Colombia’s Constitutional Court has intervened to suspend a planned tax increase on online gambling services, halting a key part of President Gustavo Petro’s fiscal strategy. By a vote of 6 to 2, the court provisionally blocked Legislative Decree 1390 of 2025, which would have implemented a 19% value-added tax (VAT) on online betting platforms.
Emergency Economic Measures Prompt Tax Proposal
The tax hike was introduced during Colombia’s declared state of economic and social emergency, a status that grants the government temporary powers to address urgent national issues. The Petro administration aimed to generate approximately 11 trillion Colombian pesos (about $3 billion) by targeting rapidly growing or under-taxed sectors, including online gambling.
Magistrate Carlos Camargo authored the report criticizing the decree, highlighting significant procedural and legal concerns. His 86-page analysis emphasized irregularities in the decree’s approval process and the absence of sufficient justification for invoking emergency powers. Responding to these findings, the court suspended the decree until a final decision on its constitutionality is made.
Legislative Decree 1390 of 2025 will not come into effect until a final ruling on its constitutionality is issued by this Court.
Constitutional Court of Colombia
Although the government framed the tax as necessary to resolve fiscal challenges, the court insisted that constitutional protections remain paramount. Magistrate Camargo warned that moving forward without a thorough constitutional review could jeopardize foundational legal principles and have irreversible effects.
Impact on Colombia’s Gambling Sector
The ruling provides a temporary relief for Colombia’s gambling industry. Operators had expressed concern that the sudden VAT increase would impose extra costs on consumers, potentially driving them to unregulated foreign platforms and undermining efforts to promote licensed gambling services. Even with the court’s suspension, the possibility of the tax hike remains.
Gambling continues to be a significant source of government revenue, increasingly relied upon to fund public initiatives such as healthcare. The national gambling authority, Coljuegos, has been proactive in expanding gaming products, including the recent launch of blockchain-based Keno, anticipated to generate hundreds of billions of pesos in contributions over the next five years.
Enforcement actions against unlicensed operators have also intensified. Coljuegos recently instructed internet providers to block access to the prediction market platform Polymarket, citing illegal political betting and cryptocurrency gambling activities. The regulator maintains that gambling remains a valuable revenue source when properly regulated and controlled.
